Santa Monica, Calif. - Video game publisher Activision has settled a lawsuit it filed against several former staffers at its Red Octane studio -- developers of the "Guitar Hero" franchise -- with the ex-employees prohibited from developing similar music-based titles for the next 12 months via their new Lodestone Entertainment venture, GameSpot reported.

"Guitar Hero II" executive producer John Tam and brand manager Corey Fong agreed to terms that also prohibit them from developing any controllers for the game, and from using or disclosing any of "Guitar Hero" publisher Activision's trade secrets.

The injunction against Tam and Fong states that their Lodestone Entertainment was formed "to compete with Activision using Activision's confidential and proprietary information."

Still pending are Activision's claims against a third former Red Octane employee, Jamie Yang, as well as Red Octane PR firm Reverb Communications and accessories maker Ant Commandos.  

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