ZeniMax has owned $500 million after their lawsuit with Oculus

ZeniMax has been awarded $500 million after their lawsuit with Oculus, with Oculus co-founder Palmer Luckey being found to have violated this Non-disclosure agreement with the company. John Carmack was also found to have destroyed evidence that proved that Oculus had used code from ZeniMax, stealing over 10,000 documents from ZeniMax when he left iD software (who are owned by ZeniMax).

Initially, ZeniMax wished to receive $4 Billion in damages from Oculus, with the courts only rewarding them with a fraction of this amount. The Courts have ordered Oculus to pay $200 million for breaking NDA, $50 million for copyright infringement and $50 million for false designation. Oculus Co-founder and former CEO Brendan Iribe was also ordered to pay $150 million, while Palmer Lucky was sentenced to pay $50 million. This amounts to a total of $500 million, which a number that will be appealed by Oculus.

Below is a lengthy comment from ZeniMax regarding this lawsuit.

While we regret we had to litigate in order to vindicate our rights, it was necessary to take a stand against companies that engage in illegal activity in their desire to get control of new, valuable technology,

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; and (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.

Below are further comments from ZeniMax Chairman and CEO, Robert Altman, who states that they will take further steps to prevent any further use of their misappropriated technology, which could result in an injunction coming Oculus’ way shortly.

Oculus could be forced to halt Rift sales until any ZeniMax code is removed from the Oculus Rift SDK, which could be a lengthy process.

Technology is the foundation of our business and we consider the theft of our intellectual property to be a serious matter. We appreciate the jury’s finding against the defendants, and the award of half a billion dollars in damages for those serious violations,

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.

Oculus has released their statement on today’s legal proceedings, stating that while they are happy with some of the outcome of the case, the company plans on filing an appeal.

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

Now at Oculus has lost this court case it is unknown what the future of the company will be in the immediate future, as while the company will still operate it will likely be forced to make significant changes to their SDK in order to remove any existing ZeniMax code.

It is likely that Oculus has already been working hard to remove any traces of ZeniMax from their codebase, as the company will likely have been preparing for this result for some time.