Facebook, Oculus, others to pay ZeniMax $500 million in VR lawsuit

Facebook (NASDAQ: FB), Oculus together with other defendants were ordered by a jury to pay a combined $500 million to ZeniMax Media in a lawsuit involving its virtual reality (VR) technology.

Facebook purchased Oculus for $2 billion in a cash and stock deal in 2014. The social network giant made the acquisition because its CEO Mark Zuckerberg believes that virtual technology would be the next great evolution and Oculus has the potential to become the most social platform.

The video game publisher accused Oculus, its founder Palmer Luckey, CEO Brendan Iribe, CTO John Carmack, and Facebook wrongfully obtained its intellectual property and commercially exploited it for their own gain.

ZeniMax claimed that Carmack, who previously served as Technical Director at its subsidiary id Software, “secretly and illegally copied thousands of documents” containing its intellectual property before his employment contract expired in 2013.”

Facebook CEO Mark Zuckerberg denied the allegations of ZeniMax during a trial on January 17. He told the jury that the allegations were not true and “Oculus products are based on Oculus technology.”

The jury in the federal court in Dallas, Texas found that Oculus used ZeniMax’s computer code to launch the Rift VR headset, therefore infringing its copyright. However, the jury ruled that the VR technology company and its co-defendants did not misappropriate the trade secrets of the video game publisher.

The jury also found Oculus was also found to be liable for violating the non-disclosure agreement signed by Luckey with ZeniMax in 2012. It also ruled that Carmack, Luckey, and Iribe are responsible for forms of infringement.

Oculus will be paying $200 million for breaching the non-disclosure agreement and $50 million for copyright infringement. The VR technology company and Luckey will be paying $50 million each for false designation while Iribe will be paying $150 million for the same.

In a statement, ZeniMax Chairman and CEO Robert Altman, said, “Technology is the foundation of our business, and we consider the theft of our intellectual property to be a serious matter. We appreciate the jury’s finding against the defendants and the award of half a billion dollars in damages for those serious violations.”

Altman added that the company is considering seeking a ruling prohibiting Oculus and Facebook from using its code.

Oculus to appeal the verdict

On the other hand, Emily Bauer, the spokeswoman for Oculus said the company would appeal the jury’s finding regarding the theft o trade secrets. She said, “We’re obviously disappointed by a few other aspects of today’s verdict, but we are undeterred.Oculus products are built with Oculus technology.”

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