500 Million Verdict in ZeniMax vs Oculus Lawsuit

2017-02-07

The jury for the ZeniMax vs Oculus lawsuit awarded ZeniMax $500 million US dollars last week. The jury found that Palmer Luckey—and by extension Oculus—violated the ZeniMax non-disclosure agreement he signed in 2012. They also found that Oculus was responsible for copyright infringement and false designation. On the complaint that Oculus stole or misappropriated ZeniMax trade secrets, the jury ruled in favor of Oculus.

The ZeniMax complaint alleged John Carmack and other ZeniMax personnel made “numerous improvements” and “literally transformed” a Rift prototype Luckey had shared with Carmack. After the Rift received accolades at E3 in 2012, ZeniMax sought compensation for their contribution to the Rift. ZeniMax filed their lawsuit on May 21, 2014 shortly after Facebook announced their acquisition of Oculus in March.

In August of 2016 ZeniMax amended their complaint to include Facebook, John Carmack (now Oculus CTO), and Brendan Iribe (then Oculus CEO) as defendants. The amendment alleged that Carmack illegally copied “thousands of documents” from his computer at ZeniMax to a USB drive that he took with him when he joined Oculus in 2013. They go on to claim that Carmack returned to ZeniMax offices after his employment with them ended and took a “customized tool” for virtual reality.

In the end, the jury agreed that Luckey and Oculus used ZeniMax intellectual property to build the Rift. However, they were not convinced that Carmack stole ZeniMax property. The court ordered Oculus to pay $200 million for breaking the NDA plus another $50 million for copyright infringement. Oculus and Luckey are responsible to pay $50 million each and Iribe has to pay $150 million for false designation.

After the verdict, an Oculus representative had this to say. “The heart of this case was about whether Oculus stole ZeniMax’s trade secrets, and the jury found decisively in our favor. 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.

ZeniMax CEO Robert Altman was pleased with the verdict in his statement. “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.

ZeniMax communications director issued this statement threatening an injunction against Oculus. “We will consider what further steps we need to take to ensure there will be no ongoing use of our misappropriated technology, including by seeking an injunction to restrain Oculus and Facebook from their ongoing use of computer code that the jury found infringed ZeniMax’s copyrights.

John Carmack posted a rant about the plaintiff’s expert witness on his Facebook page. He called the expert’s testimony “ridiculous” and suggested the internet would “viciously mock” him if the court released the full report. Carmack calls the expert’s claim that he is “absolutely certain” Oculus “non-literally copied” ZeniMax source code a lie.

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Comments

  • Rhivre

    Seems like a very messy case for all involved. Do you think this will drag on further?

    February 7, 2017 at 5:00 PM
    • Turk Fezzik Rhivre

      Oculus will appeal. They need to win on appeal because this verdict creates a bad precedence for software copyright law. This “non-literal copy” nonsense is too prone to abuse. Is “The quick brown fox jumped over the lazy dog” a copy of “A rapid orange newt slithered past the slothful rabbit”?

      February 7, 2017 at 10:02 PM