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Yahoo files lawsuit against MForma

Former employees accused of stealing trade secrets

Yahoo Incorporated has filed a lawsuit against mobile games and content provider MForma, alleging that seven former employees stole trade secrets and technology data prior to joining the wireless publisher.

The lawsuit, filed at Santa Clara County state court at the start of the week, alleges that former manager David Chang electronically copied vast amounts of internal data and documentation relating to technology designed to send content efficiently to mobile phones after submitting his resignation from Yahoo and joining MForma.

The suit further alleges that Chang then recruited further Yahoo employees, and the six other defendants are also alleged to have stolen financial forecasts, business strategy documents, Yahoo source code and more.

The majority of the evidence for the lawsuit stems from archived instant-messaging conversations, in which the former employees supposedly discussed their plans. Yahoo claims that the employees used company laptops to conduct the instant-messaging coneversations, at times switching to similar applications offered by AOL in order to avoid detection.

According to the Cnet News website, Yahoo associate general counsel, Reggie Davis, stated: "We have been confronted with evidence that shows a handful of employees has abused our trust and respect. We have been left with no recourse but to go to the courts."

The company is seeking a restraining order banning MForma and the former employees from using any of the technical or bsuiness data, and will be seeking further damages once the manner and extent to which the information has been used by Mforma has been established.

MForma CEO Jonathan Sacks accused the Internet firm of hypocrisy, referring to similar litigation against Yahoo by Nuance Communications, which sought a ban on around a dozen engineers hired by Yahoo to work on interactive speech technology, claiming unfair competition and misappropriation of trade secrets. Yahoo has stated that its dispute with Nuance Communications has been settled under confidential terms.

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