Oculus gift: VR biz to cough up half a billion dollars for ripping off software copyright

ZeniMax prevails in court fight over broken agreement

Game maker ZeniMax has been awarded $500 million in its lawsuit against Facebook-owned VR firm Oculus.

A Texas jury on Wednesday found that Oculus cofounder Palmer Luckey had violated a non-disclosure agreement with ZeniMax. The jury also found that Oculus had violated ZeniMax's software copyrights, even as it rejected the claim that Oculus had stolen trade secrets.

In May 2014, ZeniMax sued Oculus and Luckey – two months after Facebook acquired Oculus – alleging unauthorized use of its confidential information in the development of the Oculus Rift VR headset and software.

You can find the legal complaints against Oculus and Luckey, here [ZIP], and the jury's responses to the charges, here [PDF].

ZeniMax last year amended its complaint to include Oculus CEO Brendan Iribe and John Carmack, a former employee of ZeniMax who subsequently became CTO of Oculus. ZeniMax claimed that in April 2012, Carmack came across Luckey's Rift headset prototype design in an online forum and reached out to him. ZeniMax and Carmack subsequently improved upon the technology and showed off the modified headset to acclaim in the press.

In June 2012, Luckey formed Oculus and then took to Kickstarter to fund further Rift development, while relying on ZeniMax technology, according to ZeniMax's complaint.

Discussions between ZeniMax and Luckey continued into 2013, but no agreement had been reached when Oculus hired Carmack away to be its CTO. Then in February 2014, Oculus hired five senior employees away from ZeniMax, and the following month Facebook acquired Oculus for $2 billion, plus – as was revealed during the course of the trial – an additional $1 billion for Oculus employee retention packages.

ZeniMax did not immediately respond to a request for comment. It is understood the biz will apply for an injunction banning Oculus from shipping any infringing hardware.

Oculus in its statement focused on being found not guilty of trade secret theft, and said it plans to appeal the decision.

"The heart of this case was about whether Oculus stole ZeniMax's trade secrets, and the jury found decisively in our favor," a company spokesperson said in an emailed statement. "We're obviously disappointed by a few other aspects of today's verdict, but we are undeterred. Oculus products are built with Oculus technology."

Oculus said it remains committed to the long-term success of VR – perhaps because short-term success has been modest. The company is estimated to have sold somewhere between 355,000 and 400,000 of its $600 Rift headsets last year, depending upon whether the data comes from SuperData Research or Canalys.

"We look forward to filing our appeal and eventually putting this litigation behind us," an Oculus spokesperson said. ®


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