Nearly three years ago, ZeniMax Media and its subsidiary, id Software, filed a lawsuit against Oculus in the Northern District Court of Texas. The complaint accused Oculus of "unlawful exploitation of intellectual property, including trade secrets, copyrighted computer code, and technical know-how relating to virtual reality technology that was developed by ZeniMax after years of research and investment."
In early January 2017, the two companies began making their arguments in court. Over the course of the month, Oculus' top brass, including Palmer Luckey and John Carmack, and Facebook CEO, Mark Zuckerberg, took the stand and told the jury their side of the story. By the end of the month, ZeniMax revealed it would seek $4 billion in damages from Oculus and its parent company, Facebook.
Lawyers for both sides delivered closing arguments on Friday, January 27, 2016, and the jury was expected to deliver its judgment on Monday, January 31. The jury deliberated for two additional days, but it delivered its judgment on the afternoon of February 1.
The jury cleared Oculus and Facebook of misappropriation of trade secrets, but it found Luckey and Oculus at fault for failing to adhere to a non-disclosure agreement (NDA). As a result of the NDA breach, the jury awarded ZeniMax $500 million. We haven’t received an official breakdown from either company, but Polygon reported that the fine doesn’t just land on Oculus. Palmer Luckey and Brendan Iribe are responsible for $50 million and $150 million, respectively. We’ve asked for confirmation of the fine values and will update once we hear from either company.
Oculus did confirm that the trial is over, and a representative commented about the verdict:
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. We look forward to filing our appeal and eventually putting this litigation behind us.
$500 million is a large fine, but it’s a far cry from the $4 billion that ZeniMax was seeking. The fine will undoubtedly be a hard hit for the VR company, which dealt with setbacks and production delays throughout much of 2016.
