A US jury has found the original Oculus founders, Palmer Luckey and Brendan Iribe, used code and IP from ID Software (parent company ZeniMax), makers of Doom and Quake, to build the Rift VR headset and awarded damages of US$500 million.
Facebook bought Oculus for US$3 billion in 2014 unaware that the company would face potentially a multi-billion-dollar lawsuit involving the Oculus founders. The jury decided that Oculus (Facebook) did not steal trade secrets, as alleged by ZeniMax, but there are questions over its due diligence during the purchase process.
Luckey will personally pay US$50m and Brendan Iribe US$150m – both for false designation. Oculus will pay US$200m for non-disclosure agreement (NDA) violation, US$50m for copyright infringement and US$50m for false designation.
Oculus said in a statement: “The heart of this case was about whether Oculus stole ZeniMax’s trade secrets, and the jury found decisively in our favour. We’re obviously disappointed by a few other aspects of today’s verdict, but we are undeterred. Oculus products are built with Oculus technology.
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"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.”
Robert Altman, ZeniMax’s chairman and chief executive, said, “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 is strongly considering seeking a court order to stop the sale of Oculus headsets. A Zenimax spokesperson said, “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.”
There is a comprehensive analysis of this plaint and verdict by Brian Sommer, IME Law, here.
Comment
I don’t think we have heard the end of this – VR is a huge potential market and the right IP could be the difference between market dominance or failure.