Oculus VR infringed Zenimax copyright, jury finds

February 2, 2017 // 10:53 a.m.

Tags: #brendan-iribe #copyright #facebook #id-software #john-carmack #lawsuit #legal #oculus-rift #oculus-vr #palmer-luckey #robert-altman #trade-secret #zenimax

Zenimax has emerged partially victorious in its lawsuit against Facebook-owned Oculus VR, with a jury finding that co-founder Palmer Luckey had indeed broken a non-disclosure agreement he signed with the company.

The corporate behind companies including Bethesda, Arkane, and id Software, Zenimax first accused Oculus VR of foul play in May 2014, stating that id co-founder John Carmack had taken intellectual property from Zenimax to Oculus VR when he went to work with the company following a $2 billion acquisition by Facebook. According to Zenimax, it had 'provided necessary VR technology and other valuable assistance to Palmer Luckey and other Oculus employees in 2012 and 2013 to make the Oculus Rift a viable VR product, superior to other VR market offerings. The proprietary technology and know-how Mr. Carmack developed when he was a Zenimax employee, and used by Oculus, are owned by Zenimax.'

Later that month, Zenimax put its money where its mouth was with a lawsuit against Oculus VR, and while Facebook attempted to get the case dismissed it was given the green light in January 2016. By October that year, there emerged inconsistencies in Carmack's testimony which suggested the case may be swinging towards Zenimax, and now the jury has reached a verdict: Luckey did indeed break a non-disclosure agreement he had signed with Zenimax, but Carmack did not take any trade secrets with him when he left the company.

While Oculus will be relieved that it hasn't fallen foul of that latter charge, it's not getting off lightly: The company is to pay Zenimax $200 million for breach of the NDA and a further $20 million for copyright infringement, while Oculus and Palmer Luckey personally will be made to pay out $50 million each for false designation in making consumers believe that products created by Zenimax were in fact created by Oculus. Fellow co-founder Brendan Iribe, meanwhile, has also been found guilty of the latter charge, and will need to personally pay $150 million.

'The heart of this case was about whether Oculus stole Zenimax's trade secrets, and the jury found decisively in our favour,' an Oculus spokesperson claimed following the ruling. 'We're obviously disappointed by a few other aspects of today's verdict, but we are undeterred. Oculus products are built with Oculus technology. Our commitment to the long-term success of VR remains the same, and the entire team will continue the work they've done since day one — developing VR technology that will transform the way people interact and communicate. We look forward to filing our appeal and eventually putting this litigation behind us.'

'Technology is the foundation of our business and we consider the theft of our intellectual property to be a serious matter,' Zenimax chief executive Robert Altman said of the verdict. 'We appreciate the jury’s finding against the defendants, and the award of half a billion dollars in damages for those serious violations.' The company also hinted that it may be seeking an injunction on sales of Oculus VR hardware and software until the damages are paid and ongoing royalties for the use of Zenimax software agreed upon.
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