Mobile game and entertaiment firm MForma has been sued by Internet giant Yahoo!, which alleges that seven former Yahoo! employees now working at MForma are using trade secrets developed at Yahoo! in their work at the mobile game creator, according to an Associated Press report.

According to the report, Yahoo! is seeking unspecified damages, as well as to block MForma from using the technology. However, in comments made to the AP, MForma President Jonathan Sacks commented: "We are not going to allow Yahoo to intimidate us from hiring great people", denying the allegations.

MForma recently received $30 million in a third round of institutional financing last October, led by Institutional Venture Partners (IVP), and includes participation by existing investors Bessemer Venture Partners, Draper Fisher Jurvetson, and General Catalyst Partners.

The company is a publisher of cell phone games including Call Of Duty 2, True Crime: Streets of LA, Monopoly Tycoon and Elder Scrolls Travels: Stormhold, and also develops branded WAP portals including Billboard Mobile and Marvel Mobile.