Earlier this year, Activision sued three former employees of its RedOctane brand who had worked on Guitar Hero and Guitar Hero II. The suit alleged that the three had left Activision to start their own studio and had improperly used their knowledge of the publisher's hit rhythm games to develop and shop around a demo for a competing game. The suit also names former RedOctane PR firm Reverb Communications and unauthorized Guitar Hero controller manufacturer The Ant Commandos.

　　Late last month, the publisher had settled its dispute with two of the former employees. As part of their settlement with Activision, Guitar Hero II executive producer John Tam and brand manager Corey Fong consented to a judge's issuing a permanent injunction against them. According to the injunction, Tam and Fong worked with Reverb and The Ant Commandos in forming a new studio, Lodestone Entertainment (initially known as Hourglass Interactive), "to compete with Activision using Activision's confidential and proprietary information" that the pair had access to while working for the publisher.

　　"Lodestone intended to target a confidential and proprietary Activision corporate opportunity for the Guitar Hero franchise involving a certain confidential third party that was known to Tam and Fong by virtue of their employment with Activision," the injunction states. "Tam, working with Fong, directed an Activision employee and Activision independent contractors to develop, at Activision's expense, a demo of Defendents' game..."

　　The demo incorporated elements of Guitar Hero and StepMania, a free dance game for the PC that supports dancepads and includes a step editor. The pair used it to solicit partners and funding for Lodestone Entertainment, the injunction states.

　　As part of the injunction, the pair is prohibited from distributing or using the demo in any capacity and acting on or disclosing any Activision trade secrets. They are also prevented from taking steps to develop drum-, guitar-, or synthesizer-based games for the next year, nor can they work on any Xbox 360 controllers for Guitar Hero II until six months after the game's release this week.

　　The injunction notes that the publisher has a confidential list of peripheral devices for which Tam and Fong are also unable to develop any sort of competition until six months after Activision commercially releases them. Finally, Tam and Fong were ordered to surrender to Activision all documents, files, or materials they might have relating to the publisher's proprietary information, Lodestone Interactive, or communications with Reverb and The Ant Commandos.

　　While Tam and Fong have resolved their dispute with Activision, no such settlement has been reached with former RedOctane hardware group member Jamie Yang, Reverb Communications, or The Ant Commandos.