Facebook's Oculus Loses Lawsuit To ZeniMax

Oculus Rift
Facebook's Oculus loses lawsuit to ZeniMax, being ordered to pay half billion dollars. Photo : gameranx / YouTube

In a lawsuit with game developer company ZeniMax, Facebook's Oculus has been ordered on Wednesday, Feb.1, to pay half a billion dollars in damages for the violations.

Facebook's Oculus Loses Lawsuit

A jury awarded half a billion dollars in damages after concluded that, in the early days of building the Oculus Rift VR headset, Oculus executives violated a ZeniMax non-disclosure agreement. According to Polygon, in another of ZeniMax's charges, the jury decided that Oculus wasn't guilty of misappropriating trade secrets. The half billion award is composed of $50 million against both Oculus and co-founder Palmer Luckey for false designation, $50 million for copyright infringement, $150 million against former CEO Brendan Iribe for false designation and $200 million for NDA violation.

The lawsuit filed in 2014 alleged that, in order to build its Rift VR headset, Oculus improperly used code from ZeniMax. The overall award is a substantial judgment against Oculus, but less than the $4 billion that ZeniMax asked for. Oculus plans to appeal the jury's verdict.

John Carmack, the co-founder of id Software, is currently the CTO of Oculus. The parent company of id Software is ZeniMax. While developing the Oculus Rift headset, Carmack corresponded with Luckey. "Doom 3," a game developed by id Software, has been used to demonstrate the headset.

The complaint argued that Carmack was involved in much more than just offering basic support. The lawsuit alleged that a key factor to making the Rift work has been the software developed at ZeniMax. It has been also alleged that Oculus avoided attempts to establish a licensing deal.

The complaint charged Oculus with violating copyright by using ZeniMax games and code, violating the non-disclosure agreement signed by co-founders when dealing with ZeniMax and confusing the public into believing that ZeniMax products were actually from Oculus. Since was filed shortly after the company has been acquired by Facebook, Oculus claimed the suit was merely an attempt to profit off its success.

According to Bloomberg, Facebook's acquisition of Oculus positioned the company on a spot ahead of its rivals Alphabet's Google, Sony, Microsoft and others competing for a share of the virtual reality market. Analysts forecast that the VR industry will exceed $84 billion in sales by the year 2020. Facebook started shipping the Oculus Rift headset in March, with a price tag of $599.

Reactions To Jury's Verdict

In a statement released after the jury's decision, an Oculus spokesperson characterized the lawsuit verdict as a limited victory. The jury found that Oculus did not steal ZeniMax's trade secrets. However, the company is disappointed by several other aspects of the judgment.

Oculus points out that its products are built with Oculus technology. The company is committed to the long-term success of VR. The statement also says that Oculus will continue the work on developing revolutionary VR technology able to transform the way people communicate and interact.

Meanwhile, ZeniMax is celebrating the jury's decision. CEO Robert Altman said in a statement that the company considers the theft of its intellectual property a serious matter. ZeniMax appreciates the jury's verdict against the defendants and considers fair the award of half a billion dollars in damages.

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