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Jury awards ZeniMax $500 million in Oculus VR lawsuit

Jury awards ZeniMax $500 million in Oculus VR lawsuit

Facebook’s acquisition of Oculus just became even more expensive.

A jury in Dallas, Texas has awarded ZeniMax Media a half billion dollars after finding that Palmer Luckey (and by extension Oculus VR) had violated the terms of a non-disclosure agreement. The jury has also found that Oculus was not guilty of misappropriating trade secrets, Polygon reports.

Luckey will personally have to pay $50 million in the suit, while former Oculus CEO Brendan Iribe will be forced to pay $150 million.

Judgments are still being handed down in court, and this post will be updated as we hear more, but it seems that Facebook’s investment in VR will be growing more complicated. What this means for Facebook’s future VR efforts and sales of the Rift VR headset is unclear, but this will undoubtedly damage the credibility of Oculus moving forward.

Facebook is set to release its quarterly earnings in just a few minutes, we’ll see if Facebook CEO Mark Zuckerberg has anything to say on the investor call about this court decision and how it will impact the company.

 

Updating

At the heart of this case was ZeniMax Media’s belief that VR technology that they had created was used illegally by Oculus founder Palmer Luckey to create the Rift headset, the core product of Oculus VR, which sold to Facebook for $2 billion in March of 2014. The company filed suit against Oculus asking for $4 billion in compensation and punitive damages from the court.

ZeniMax Media is likely not a company that you’ve heard of, but if you follow the video game industry at all, some of the titles the company’s subsidiary studios have released will immediately stick out. ZeniMax owns Bethesda Softworks, which has published games like Skyrim (one of the best-selling video games of all time) and the Fallout series. The popular franchises carried by its several subsidiaries have earned ZeniMax a reported valuation of as much as $2.5 billion.

ZeniMax Media filed suit against Palmer Luckey and Oculus VR on the following 7 counts, here’s the gist of the claims:

  1. Common Law Misappropriation of Trade Secrets
    The big one: ZeniMax claims that its trade secrets revealed to Luckey under NDA and known to a handful of ex-ZeniMax employees now at Oculus have been used to build the Rift headset’s core technologies.
  2. Copyright Infringement
    Oculus and its team utilized ZeniMax’s “DOOM 3: BFG Edition” as a title to showcase the Rift to investors which ZeniMax claims was done without its permission. More salacious is the claim that some of the SDKs which Oculus VR distributed utilized ZeniMax code.
  3. Breach of Contract
    Here, ZeniMax claims that Luckey violated the terms of a non-disclosure agreement which he signed on May 24, 2012.
  4. Unfair Competition
    Basically, by using Zenimax’s trade secrets to build the Rift, the company claims Oculus has taken away their ability to release a VR product based on their own unique technologies.
  5. Unjust Enrichment
    ZeniMax suggests here that Oculus VR and its employees have unjustly profited off ZeniMax technologies to the tune of billions of dollars.
  6. Trademark Infringement
    Again, ZeniMax calls out Oculus VR for using owned trademarks like that of “DOOM 3: BFG Edition” without the company’s permission, a claim Oculus has denied is accurate.
  7. False Designation 
    Finally, ZeniMax claims that Oculus VR purposefully misled the public into thinking that their headset was endorsed by ZeniMax or its employees or was in some way affiliated with the company or its products.

All of these counts circle around to the point that ZeniMax Media believes that they were instrumental to the success of Oculus in a way that they should be compensated for, which now it seems they will be, to the tune of a half billion dollars.

 

 

Source: TechCrunch

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