U.S. jury issues $500 mln verdict in Facebook virtual reality lawsuit

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By Jan Wolfe

<span class="articleLocation”>A U.S. jury in Texas on Wednesday ordered
Facebook Inc, its virtual reality unit Oculus, and other
defendants to pay a combined $500 million to ZeniMax Media Inc,
a video game publisher that says Oculus stole its technology.

The jury in federal court in Dallas found Oculus, which
Facebook acquired for about $2 billion in 2014, used ZeniMax’s
computer code to launch the Rift virtual-reality headset.

ZeniMax alleges that video game designer John Carmack
developed core parts of the Rift’s technology while working at a
ZeniMax subsidiary. Oculus hired Carmack in 2013.

Facebook’s stock was not impacted by the verdict. The
company’s shares were up 3 percent in after-hours trading
following the release of a fourth-quarter earnings report that
beat expectations.

ZeniMax Chief Executive Robert Altman hailed the verdict and
said in a statement the company was considering seeking an order
blocking Oculus and Facebook from using its code. It is unclear
what impact that would have on the Rift’s market availability.

Though the jury ruled that none of the defendants
misappropriated ZeniMax’s trade secrets, it found Oculus’ use of
computer code directly infringed on ZeniMax’s copyright. The
jurors held Carmack and different Oculus co-founders Palmer
Luckey and Brendan Iribe liable for forms of infringement.

The jury also found Oculus liable for breaching a
non-disclosure agreement Luckey signed with ZeniMax in 2012,
when he began corresponding about virtual reality with Carmack.
The two met on an online forum.

Well-known for helping to conceive games such as “Quake” and “Doom,” Carmack worked for id Software LLC before that company
was acquired by ZeniMax. He is now the chief technology officer
at Oculus.

Facebook Chief Executive Mark Zuckerberg testified last
month during the three-week trial that none of ZeniMax’s
proprietary code was incorporated into the Rift.

Though the jury did not find Facebook directly liable, it
would likely be on the hook for damages owed by its subsidiary,
absent an agreement stating otherwise.

In a statement, Oculus spokeswoman Emily Bauer noted the
jury’s finding on trade secrets theft and said the company would
appeal. “We’re obviously disappointed by a few other aspects of
today’s verdict, but we are undeterred,” she said. “Oculus
products are built with Oculus technology.”

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