Palmer Luckey (AP Images)

The lengthy legal battle between Facebook and Zenimax just wrapped up. A Dallas, Texas jury has awarded half a billion dollars to Zenimax. The reason? Apparently, Palmer Luckey didn’t comply with a non-disclosure agreement.




The lawsuit began with Zenimax accusing the virtual reality company of “illegally misappropriating” their trade secrets back in 2014, the same year Facebook bought Oculus. Zenimax claimed that id Software co-founder John Carmack had provided technology to Oculus before ever going to work with them. They even went so far as to claim Palmer Luckey wouldn’t have been able to conjure up the Oculus Rift without Zenimax’s help. Zenimax also alleged that Oculus infringed on their copyrights and that Luckey violated a non-disclosure agreement he signed with Zenimax in 2014.

Today, however, the jury found that Oculus did not misappropriate trade secrets, according to Polygon. Still, they awarded Zenimax $500 million over the aforementioned non-disclosure agreement. Here’s how it breaks down: Oculus has to pay $200 million for breaking the NDA and $50 million for copyright infringement. Oculus and Luckey each have to contribute their own $50 million slices of the pie for false designation. Lastly, Oculus co-founder Brendan Iribe has to pay $150 million, also for false designation.


The case certainly aired some dirty laundry. Facebook, for instance, claimed that Zenimax sued because the company passed on a proposed partnership with Oculus before Facebook snatched up the then-less absurdly well-funded company. “This case, because Zenimax and the owners of Zenimax feel badly, embarrassed, humiliated, that they didn’t do the deal, that they didn’t invest in this VR technology when they could have, they want to rewrite history,“ Beth Wilkinson, a lawyer for Facebook, said.

Oculus co-founder Brendan Iribe, meanwhile, claimed that Bethesda Softworks’ president played dirty, calling the Oculus team “kids” and saying he’d put a halt to all of Carmack’s VR work if Oculus didn’t agree to a 15 percent equity deal with Zenimax.

At another point, ex-id Software programming legend (and current Oculus employee) John Carmack confessed to taking thousands of documents and lines of code from Zenimax before he departed. “I copied files that I shouldn’t have. I think stealing is an uncharitable way to look at it since I didn’t benefit and Zenimax didn’t lose, but I shouldn’t have done it, and I did,” Carmack said while being questioned by Zenimax’s lawyer.

It remains to be seen how this will affect Oculus’ plans going forward. Obviously, though, this likely changes a few things.


Update 1 (4:55 PM): Oculus has issued a statement to Kotaku about the result, saying (among other things) that they intend to appeal:

“The heart of this case was about whether Oculus stole Zenimax’s trade secrets, and the jury found decisively in our favor,” Oculus 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.”


Update 2 (6:10 PM): In a statement to Polygon, Zenimax said they may seek an injunction against Oculus to temporarily halt sales of the Rift:

“We will consider what further steps we need to take to ensure there will be no ongoing use of our misappropriated technology,” said a Zenimax rep, “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.”