Zenimax may seek an injunction to halt Oculus Rift sales in wake of broken NDA verdict, details evidence of Oculus’s alleged theft

By Brenna Hillier, Thursday, 2 February 2017 01:47 GMT

Oculus Rift faces an uncertain future, and the lawyers aren’t done tusslin’ yet.

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Bethesda parent company Zenimax is not necessarily finished with the Facebook-owned Oculus.

Earlier today a jury ruled Oculus broke an NDA and awarded Zenimax $500 million in damages, but dismissed Zenimax’s claims that Oculus misappropriated trade secrets and the other $3.5 billion in damages Zenimax filed for.

Zenimax’s famously eager legal eagles may not be not satisfied with this outcome, according to a statement from Zenimax chairman and CEO Robert Altman issued to GamesIndustry.

“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,” Altman said.

If Zenimax pursues this course successfully, this could mean Oculus Rift is pulled from sale – but it’s more likely the two companies would come to an expensive settlement.

Indeed, this first verdict isn’t set in stone yet; Oculus said it intends to appeal.

“We look forward to filing our appeal and eventually putting this litigation behind us,” a spokesperson said.

Oculus, Zenimax comment on outcome

While the jury found Oculus in breach of NDA, it turned down Zenimax’s claims that Oculus had misappropriated trade secrets – by far the weightier of the two accusations.

Oculus said it’s “obviously disappointed” by the broken NDA ruling, “the heart of this case was about whether Oculus stole ZeniMax’s trade secrets, and the jury found decisively in [Oculus’s] favor”.

“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,” he said.

Zenimax, on the other hand, issued a much lengthier comment detailing Oculus’s sins.

“We are pleased that the jury in our case in the US District Court in Dallas has awarded ZeniMax $500 million for Defendants’ unlawful infringement of our copyrights and trademarks, and for the violation of our non-disclosure agreement with Oculus pursuant to which we shared breakthrough VR technology that we had developed and that we exclusively own,” the company said.

“In addition, the jury upheld our complaint regarding the theft by John Carmack of RAGE source code and thousands of electronic files on a USB storage device which contained ZeniMax VR technology. 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.”

Zenimax details Oculus’s alleged theft

Altman went on to describe Oculus’s actions as “theft of [Zenimax’s] intellectual property” and “serious violations”, and detailed the “uncontradicted evidence” Zenimax brought to the suit, to whit:

  • 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
  • we shared this VR technology with the defendants under a non-disclosure agreement that expressly stated all the technology was owned by ZeniMax
  • 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
  • there was a documented stream of computer code and other technical assistance flowing from ZeniMax to Oculus over the next 6 months
  • Oculus in writing acknowledged getting critical source code from ZeniMax
  • 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)
  • 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
  • Carmack filed an affidavit which the court’s expert said was false in denying the destruction of evidence
  • 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,” the executive continued.

Wow, don’t hold back, man. We look forward to Oculus’s response to this savaging – if it has one.

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