Copyright applies to unfinished works, too. There are many reasons it might not protect an unfinished work, but those reasons are still relevant even for finished works.
If someone steals your physical drawing, that’s theft. If they take a picture of it, then use the picture - or your picture + modifications - without your permission, particularly in a commercial work, then that’s copyright infringement, but not theft. If they steal your physical drawing and then take a picture and so on, then it’s both theft and copyright infringement.
Most likely this wasn’t considered copyright infringement because the allegedly copied art isn’t copyrightable, e.g., game mechanics; or the plaintiff didn’t own the copyrights themselves and thus couldn’t sue (possibly the arts were still copyrighted by the original artists, having never been purchased; possibly they were stock assets that were re-purchased by the defendant). There are any number of reasons. However, “the work wasn’t published” isn’t one of them.
On the other hand, it’s quite likely they were able to sue for theft of trade secrets for that very reason. And they might have chosen to do that simply because proving copyright infringement is much more difficult.
Copyright applies to unfinished works, too. There are many reasons it might not protect an unfinished work, but those reasons are still relevant even for finished works.
If someone steals your physical drawing, that’s theft. If they take a picture of it, then use the picture - or your picture + modifications - without your permission, particularly in a commercial work, then that’s copyright infringement, but not theft. If they steal your physical drawing and then take a picture and so on, then it’s both theft and copyright infringement.
Most likely this wasn’t considered copyright infringement because the allegedly copied art isn’t copyrightable, e.g., game mechanics; or the plaintiff didn’t own the copyrights themselves and thus couldn’t sue (possibly the arts were still copyrighted by the original artists, having never been purchased; possibly they were stock assets that were re-purchased by the defendant). There are any number of reasons. However, “the work wasn’t published” isn’t one of them.
On the other hand, it’s quite likely they were able to sue for theft of trade secrets for that very reason. And they might have chosen to do that simply because proving copyright infringement is much more difficult.