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Rifted Success: Facebook Loses Oculus Case

Ed Tech Up
Facebook and other defendants have been ordered to pay $500 million to ZeniMax Media Inc.. The company argued that its headway in early virtual reality development was illegally used by Oculus VR to create its flagship creation: the Rift VR Headset. Facebook bought Oculus in March 2014 for $2 billion, and in May ZeniMax sued Oculus. The forerunner in virtual reality technology put itself on the map with the device, but not until it was released in 2016. At the time of the suit, Oculus was simply a VR startup in the process of developing technology.

The backstory is slightly confusing, so bear with me. The current chief of technology officer at Oculus is John Carmack. Before his appointment, Carmack was in the process of developing a prototype VR headset for id Software, a game development studio of which ZeniMax is the parent company. Palmer Luckey, co-founder and CEO of Oculus, exchanged emails with Carmack while he was employed by id Software. Somewhere in the chain of correspondence, Luckey broke a non-disclosure agreement. Additionally, ZeniMax argued that six of its ex-employees worked with Luckey to engineer the Rift headset using ZeniMax research and computer code. For a thoroughly detailed and dense verdict analysis, visit Road to VR.

The trial was held over three weeks in a district court in Dallas, Texas where Mark Zuckerberg, Facebook's chief executive, spoke against ZeniMax, "It's pretty common when you announce a big deal that people just come out of the woodwork and claim they own some part of the deal." The jury ruled that the defendants - Facebook and Oculus - did not plunder ZeniMax's trade secrets, but did find them guilty on other counts.

The former and current CEO of Oculus, Brendan Iribe and Luckey respectively, were found guilty of false designation. Luckey must cough up $50 million while former CEO Iribe must pay $100 million more. Oculus as a company is responsible for $200 million for the non-disclosure agreement violation, $50 million for copyright infringement and $50 million for false designation. Facebook was able to bypass the situation without incurring monetary charges.

During closing arguments, ZeniMax attorney Anthony Sammi fought for Facebook to pay $4 billion, split equally between compensation and damages. Oculus attorney Beth Wilkinson claimed that the lawsuit was driven by jealousy and anger, not facts.

End Result

Oculus VR
An Oculus spokesperson delivered a rather positive message in regards to the trial: "The heart of this case was about whether Oculus stole ZeniMax's trade secrets, and the jury found decisively in our favor ... 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 Media Inc.
ZeniMax sent a statement to GamesIndustry.biz. At first, the company expresses happiness at having won its rightful due from Oculus. The short celebratory bit is followed by a detailed and lengthy list of evidence establishing "the liability of Defendants" using "uncontradicted evidence presented by ZeniMax." Apparently, ZeniMax wants to make their case unequivocally clear to anyone who might question it. In regards to the future, ZeniMax will be "seeking an injunction to restrain Oculus and Facebook from their ongoing use of computer code that the jury found infringed ZeniMax's copyright."

The lawsuit came as Facebook announced a 51% jump in its fourth-quarter thanks to advertising revenue; the increase came from mobile advertising, making up 84% of profits. The quarterly profit, $3.57 billion, more than doubled from last year, $1.56 billion. The unprecedented success is partly due to the 1.86 billion active users, a growth of 17% from last December.

On that happy note, I leave you with this:

A sneak peek at the new Facebook Oculus VR experience.

Jacqui Litvan, wielding a bachelor's degree in English, strives to create a world of fantasy amidst the ever-changing landscape of military life. Attempting to become a writer, she fuels herself with coffee (working as a barista) and music (spending free time as a raver). Follow her @Songbird_Jacqui

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Rifted Success: Facebook Loses Oculus Case Reviewed by Unknown on Thursday, February 02, 2017 Rating: 5

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