×
You will be redirected back to your article in seconds

Facebook, Oculus Execs Ordered to Pay $500 Million in Virtual Reality Lawsuit

Facebook’s virtual reality subsidiary Oculus and its executives have been ordered by a Dallas jury to pay game developer ZeniMax Media $500 million in damages over copyright infringement and the violation of a non-disclosure agreement.

The lawsuit stems from a two-year-old dispute between ZeniMax and Oculus, with ZeniMax alleging that Oculus CTO John Carmack and Oculus founder Palmer Luckey stole intellectual property to start the work on the Oculus Rift VR headset. The company also claimed that Facebook rushed through its acquisition process, not properly vetting Oculus and its executives for possible conflicts and other warning signs.

ZeniMax was seeking as much as $4 billion in the case. However, the jury threw out some claims, and primarily focused on the fact that Luckey and Carmack violated their non-disclosure agreements. The judgement requires Oculus to pay $300 million directly, with Carmack having to pay another $150 million and Luckey having to pay $150 million.

ZeniMax said in a statement that it was pleased with the verdict, but left the door open for additional legal proceedings: “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.”

Oculus on the other hand said that it was going to appeal the ruling, sending the following statement via email:

“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.”

ZeniMax had sued Oculus following the $2 billion acquisition of the company by Facebook in 2014. The court proceedings, which began in January, included testimony from Facebook CEO Mark Zuckerberg as well as Luckey and Carmack.

ZeniMax isn’t a household name with most consumers, but the company’s subsidiaries have produced video games like “Quake,” “Fallout,” and “Wolfenstein.”

Facebook didn’t immediately respond to a request for comment. The company is set to announce its Q4 2016 earnings after market close Wednesday. Investors didn’t seem too rattled by the verdict, with Facebook’s stock essentially remaining flat after the news broke.

Update: 2:48pm: This post was updated throughout with additional details on the judgement and statements from both companies.

More Digital

  • BTF Media, Vince Gerardis Pact Sign

    NATPE: BTF Media, Vince Gerardis Pact for Six Projects (EXCLUSIVE)

    MIAMI — BTF Media, producer of breakout series “Hasta Que te Conocí” and “El Secreto de Selena,” is teaming with Vince Gerardis, a co-executive producer with George Martin on “Game of Thrones,” on a six-project co-production alliance. Spearheaded at BTF Media by founder-partner Ricardo Coeto, the agreement takes in the development and co-production of the [...]

  • Bob Bakish Variety Cover Story

    Viacom Has Acquired Pluto TV Streaming Service for $340M

    Viacom has acquired Los Angeles-based video streaming service Pluto TV for $340 million in cash, both companies confirmed Tuesday. “Today marks an important step forward in Viacom’s evolution, as we work to move both our company and the industry forward,” said Viacom CEO Bob Bakish in a statement. “Pluto TV’s unique and market-leading product, combined [...]

  • Bob PittmanVariety Entertainment Summit at CES,

    iHeartMedia Bankruptcy Plan Approved, CEO Bob Pittman's Contract Renewed

    A U.S. court has approved the bankruptcy plan of iHeartMedia, the biggest radio broadcaster in the U.S., which will shave down its crushing debt load and separate iHeartMedia from Clear Channel Outdoor Holdings. The company said chairman and CEO Bob Pittman and Rich Bressler, president, COO and CFO, have extended their contracts by four years. [...]

  • Instagram Logo

    Netflix Lets iOS Users Share Movies, Shows to Instagram Stories

    Netflix is tapping into Instagram Stories for some word-of-mouth promotion: The streaming video service rolled out a new Instagram integration Tuesday that allows iOS users to share their favorite movies and TV shows via Stories. To do so, users simply select the title of their choice within the Netflix iOS app, and then share it [...]

  • Brian Lockhart - ESPN+

    ESPN Hires NFL Media's Brian Lockhart to Head ESPN+ Original Content

    ESPN recruited Brian Lockhart, who has spent more than a decade at NFL Media, as executive producer of original content for the ESPN+ subscription-streaming service. Lockhart will oversee strategy and development for all ESPN+ original programming initiatives, including new projects as well as existing shows such as “Detail,” “More Than an Athlete,” “The Board Room,” [...]

  • Roma

    Netflix Joins the Motion Picture Association of America

    UPDATED WASHINGTON — Netflix has joined the Motion Picture Association of America, a move that reflects its evolution as a major player in the movie business. The MPAA currently has six major studios as members, and it collected about $38 million in membership dues in 2017, according to its most recent filing with the IRS. [...]

More From Our Brands

Access exclusive content