Facebook Loses $500m Oculus Virtual Reality Case

A court the US has ordered Facebook to pay $500m to ZeniMax Media Inc after ruling the social media giant unlawfully used the firm’s virtual reality technology.

The virtual reality headset maker that Facebook bought in 2014 for $2 billion was found to have used stolen computer code acquired from ZeniMax before they were bought out.

Jury found that Oculus had used ZeniMax code.

The jury found that Oculus, a subdivision of Facebook, used code that ZeniMax had originally intended to use to launch its own VR headset.

Key to ZeniMax’s claims that it was responsible for some of the key breakthroughs in the development of software and hardware for domestic consumer use of the headset, was that one of their former star employees took intellectual property with him when he joined Facebook’s Oculus program, Oculus VR. The case centred around the defection of video-game programmer John Carmack. Most gamers will know Carmack from legendary 90s PC games such as Doom and Quake. Carmack was named chief technology officer at Oculus in 2013. Carmack admitted in court that when he joined Oculus, he took with him copies of email records, including some computer code that related to virtual reality.

The jury found Oculus guilty of copyright infringement, failure to comply with a non-disclosure agreement, and misuse of Oculus trademarks (“false designation.”) It did not however, find Oculus guilty of the major charge of theft of trade secrets. Carmack himself was also not ordered to pay damages.

Mark Zuckerberg, the founder of Facebook, testified for five hours during the three-week trial, but he was not named as a defendant, and was under no obligation to do so. He denied Zenimax’s allegations, seemingly attempting to paint Zenimax’s allegations as a case of sour grapes. Zuckerberg said it was common for rivals to “come out of the woodwork” and make such claims following an acquisition.

ZeniMax had sought $2 billion from Facebook and Oculus to compensate for losses and unspecified punitive damages. Lawyers for Facebook said they would appeal the decision, and welcomed the decision that they had not been found culpable of stealing trade secrets.