$500 Million Awarded To ZeniMax In Lawsuit Over The Oculus Rift [UPDATE]

ZeniMax had been seeking far more.


Update: ZeniMax has provided GameSpot with a comment on the outcome of the case in which it suggests it could try to inhibit or block sales of the Oculus Rift. You'll find more details at the bottom of this post along with a comment from Oculus.

ZeniMax Media has been awarded $500 million in its lawsuit against Oculus, which alleged that virtual reality technology it owns was stolen and used to develop the Oculus Rift.

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Now Playing: GS News Update: $500 Million Awarded To ZeniMax In Lawsuit Over The Oculus Rift

ZeniMax, the parent company of video game developers such as Fallout maker Bethesda Softworks, had been seeking $2 billion in damages and $4 billion in punitive damages.

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The trial began in January and saw high-profile appearances from the likes of Facebook founder Mark Zuckerberg. Following several days of deliberations, a jury today found Oculus liable of copyright and trademark infringement, as well as having breached a ZeniMax non-disclosure agreement. It was cleared on claims of trade secret theft and unfair competition.

Facebook was found not liable, while Oculus is responsible for $250 million of the half-billion owed to ZeniMax. The two companies weren't the only defendants; Oculus executives were also named and have been found liable. Former Oculus CEO Brendan Iribe (who recently stepped down for a different role) owes $150 million for trademark infringement, while founder Palmer Luckey owes $50 million.

A key issue in the case was whether work done by John Carmack--a former employee of ZeniMax-owned id Software--while at id enabled the creation of the Oculus Rift. ZeniMax, as you'd suspect, believes it did and argued that code used to power the Oculus features indications it stems from ZeniMax work.

According to Law360, Carmack and others claimed none of the code he worked on at ZeniMax was used in the version of the Rift that existed when Facebook bought Oculus. Carmack did admit to having copied emails (and source code) from his time at ZeniMax but claimed he wrote new code while at Oculus. ZeniMax also alleged that Palmer demoed VR games created by Carmack in the early days of Oculus's existence, and that these helped make it possible for the company to be founded.

The case dates back to 2014, when ZeniMax first filed suit. Last year, it added Carmack and Iribe to the list of defendants with more specific allegations. Oculus has consistently stated the case "has no merit."

Presumably there will be appeals to come, so this likely isn't the end of the matter.

In a statement shared with GameSpot, Oculus called attention to the areas in which it was found not liable. "The heart of this case was about whether Oculus stole ZeniMax's trade secrets, and the jury found decisively in our favor," a spokesperson said. "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."

In its statement, ZeniMax said it was "pleased" with the outcome and that it could now seek an injunction to prevent continued use of code it owns.

"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," it said.

It also added the following, which we've broken up into list form for readability:

"The liability of Defendants was established by uncontradicted evidence presented by ZeniMax, including

  • (i) the breakthrough in VR technology occurred in March 2012 at id Software through the research efforts of our former employee John Carmack (work that ZeniMax owns) before we ever had contact with the other defendants
  • (ii) we shared this VR technology with the defendants under a non-disclosure agreement that expressly stated all the technology was owned by ZeniMax
  • (iii) the four founders of Oculus had no expertise or even backgrounds in VR--other than Palmer Luckey who could not code the software that was the key to solving the issues of VR
  • (iv) there was a documented stream of computer code and other technical assistance flowing from ZeniMax to Oculus over the next 6 months
  • (v) Oculus in writing acknowledged getting critical source code from ZeniMax
  • (vi) Carmack intentionally destroyed data on his computer after he got notice of this litigation and right after he researched on Google how to wipe a hard drive--and data on other Oculus computers and USB storage devices were similarly deleted (as determined by a court-appointed, independent expert in computer forensics)
  • (vii) when he quit id Software, Carmack admitted he secretly downloaded and stole over 10,000 documents from ZeniMax on a USB storage device, as well as the entire source code to Rage and the id tech 5 engine--which Carmack uploaded to his Oculus computer
  • (viii) Carmack filed an affidavit which the court's expert said was false in denying the destruction of evidence
  • (ix) Facebook's lawyers made representations to the court about those same Oculus computers which the court's expert said were inaccurate. Oculus' response in this case that it didn't use any code or other assistance it received from ZeniMax was not credible, and is contradicted by the testimony of Oculus programmers (who admitted cutting and pasting ZeniMax code into the Oculus SDK), as well as by expert testimony."

This story has been updated to note John Carmack was not found liable for any damages.

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