ZeniMax vs Oculus verdict is in, the prize goes to ...

[zMeul]

source: https://www.vg247.com/2017/02/01/zenimax-awarded-half-billion-dollar-judgment-in-oculus-lawsuit/

 

the lawsuit that started in August 2016 with ZeniMax accusing Oculus that John Carmack broke the NDA he signed with the company when the left to join Oculus

the judge awarded ZeniMax 500 million USD 

 

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includes $200 million in damages over Luckey’s broken NDA, $50 million for copyright infringement and $50 million for false designation, all of which Oculus is responsible for. Additionally, Luckey will have to fork out $50 million for false designation, and former Oculus CEO Brendan Iribe must pay $159 million for false designation

 

However, the jury didn’t find Oculus had misappropriated trade secrets, which it had been accused of by ZeniMax.

 

I said it couple of times, Oculus Rift was built on lies, theft and deception

 

---

 

even Oculus founder, Luckey, is accused by his former employer (Total Recall Technologies) of using trade secrets in the Rift http://law.justia.com/cases/federal/district-courts/california/candce/3:2015cv02281/287721/179/

[Prysin]

10 minutes ago, Jorgen297 said:

What did Oculus say that was so damaging it cost the company up to 2 billion dollars?

"The msrp is $599"

[SydneySideSteveSomewheres]

Source: Alex Heath - Business Insider Australia - Thursday, 2 February 2017.

 

Facebook's $500m blow.

 

A Dallas jury has ordered Facebook to pay USD$500 million in a case filed by ZeniMax against Oculus. id Software which is known for games such as Doom and Quake was a game company run within the ZeniMax software business, and the accusation is around Oculus hiring John Carmack, who then shared with them ZeniMax's software that is essential to Oculus's VR software. This is known as intellectual property theft and the jury ruled that Oculus co-founder  Palmer Lucky intentionally violated a non-disclosure agreement it made with ZeniMax prior to the Facebook acquisition. The lawsuit was filed in 2014 and Mark Zuckerberg gave evidence that he did not know about the Oculus - ZeniMax debacle (-rift-  ) "or code and more than 10,000 documents" John Carmack is purported to have used during Oculus's development of the headset.

 

"The lawsuit alleges that Luckey formed Oculus just three days after a gaming convention where ZeniMax displayed the technology behind the Rift headset."

Facebook's Sheryl Sandburg stated that the decision is "not material to our financials" and they will appeal the ruling.

 

Links:

Business Insider Australia

Michelle Castillo from CNBC.com

Anita Balakrishnan and Julia Boorstin Tuesday, 17 Jan 2017

Mark Zuckerberg feed from Facebook

 

 

 

[manikyath]

might i just add.. "i hope this is the last i hear of the occulus lawsuit mess".

[Tech_Dreamer]

500mill? Like that's gonna hurt em
 

Spoiler

 

 

[Delicieuxz]

This verdict denies ZeniMax the $4 billion they were seeking, and includes the very favourable outcome for Oculus that ZeniMax is not entitled to ownership or royalties from Oculus' technology and product, because no ZeniMax technology was used. This is also a good outcome for John Carmack, because it finds him innocent of ZeniMax's accusations against him, that he stole any ZeniMax property or work.

 

47 minutes ago, zMeul said:

I said it couple of times, Oculus Rift was built on lies, theft and deception

You've misread the news, zMuel, or maybe just read the headline and assumed what was concluded - the lawsuit has ended heavily in Oculus' favour (compared to what was alleged and sought by ZeniMax, and despite the ~$500 million fine), and it was concluded that there was no theft, and (at least in this article) there's no mention of wrongdoing by Carmack.

 

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the lawsuit that started in August 2016 with ZeniMax accusing Oculus that John Carmack broke the NDA he signed with the company when the left to join Oculus

No. It's Palmer Luckey who broke an NDA with ZeniMax, not John Carmack. The NDA was not concerning John leaving ZeniMax, but, according to this article, concerning an improved prototype of Palmer's VR headset that was worked on and shown to Palmer by ZeniMax employees, who showed it to Palmer under the condition of an NDA.

[SydneySideSteveSomewheres]

53 minutes ago, zMeul said:

source: https://www.vg247.com/2017/02/01/zenimax-awarded-half-billion-dollar-judgment-in-oculus-lawsuit/

 

the lawsuit that started in ...August 2016... with ZeniMax accusing Oculus that John Carmack broke the NDA he signed with the company when the left to join Oculus

the judge awarded ZeniMax 500 million USD

 

You may need to perhaps read that article that you cite as at the bottom it says that "Bethesda’s parent company ZeniMax filed suit against Oculus in May 2014 over..."

[Sakkura]

6 hours ago, Delicieuxz said:

This verdict denies ZeniMax the $4 billion they were seeking, and includes the very favourable outcome for Oculus that ZeniMax is not entitled to ownership or royalties from Oculus' technology and product, because no ZeniMax technology was used. This is also a good outcome for John Carmack, because it finds him innocent of ZeniMax's accusations against him, that he stole any ZeniMax property or work.

 

You've misread the news, zMuel, or maybe just read the headline and assumed what was concluded - the lawsuit has ended heavily in Oculus' favour (compared to what was alleged and sought by ZeniMax, and despite the ~$500 million fine), and it was concluded that there was no theft, and (at least in this article) there's no mention of wrongdoing by Carmack.

 

No. It's Palmer Luckey who broke an NDA with ZeniMax, not John Carmack. The NDA was not concerning John leaving ZeniMax, but, according to this article, concerning an improved prototype of Palmer's VR headset that was worked on and shown to Palmer by ZeniMax employees, who showed it to Palmer under the condition of an NDA.

Carmack was found liable for conversion, which is like the lesser counterpart to theft. Basically the jury found that he took some of his emails and some Rage code with him that he had no right to (see Question 35 in the verdict, linked below).

 

And yeah it was Palmer's NDA with Zenimax that was breached. Carmack was found not liable for breach of contract.

 

The biggest thing the verdict agreed with Zenimax about was infringing on the copyright and trademark of some id and Bethesda games. Like how the original Kickstarter campaign promised a copy of Doom 3 BFG with each order (that didn't happen).

 

But I think we agree on the TL;DR: All Zenimax claims related to the Rift were rejected by the jury.

 

Here's the verdict.

[Delicieuxz]

Here's John Carmack's response to the verdict: John Carmack Rips Expert in $500 Million Case: ‘The Internet Would Have Viciously Mocked The Analysis’

 

Also: Oculus Vows Appeal of $500 Million Verdict, ZeniMax Threatens Injunction

[Guest Kloaked]

13 hours ago, zMeul said:

I said it couple of times, Oculus Rift was built on lies, theft and deception

They broke NDA but they didn't steal anything, which is why Zeni wasn't awarded everything they wanted. It's not as bad as you're making it out to be, but it's still lame.

[Misanthrope]

57 minutes ago, Kloaked said:

They broke NDA but they didn't steal anything, which is why Zeni wasn't awarded everything they wanted. It's not as bad as you're making it out to be, but it's still lame.

Well, it's neither here not there. I do not think they stole anything per se but there is a case to be made as to what is a company entitled to if their employees develop tech under their time and likely their dime only to go away, start a new company and off it to Facebook.

 

While there's no direct proof of theft of ideas (as per the jury's decision) there is something to be said about the next best thing which is to "steal" companies employees. After this the environment for people working at Zenimax might become much worst with most current employees being subject to extreme scrutiny of everything they do and maybe on other places too. In fact it might push companies not to directly hire talent and to just use devs as contractors with extremely strict terms that means all they create belongs exclusively to them and such.

 

[Sakkura]

23 minutes ago, Misanthrope said:

Well, it's neither here not there. I do not think they stole anything per se but there is a case to be made as to what is a company entitled to if their employees develop tech under their time and likely their dime only to go away, start a new company and off it to Facebook.

 

While there's no direct proof of theft of ideas (as per the jury's decision) there is something to be said about the next best thing which is to "steal" companies employees. After this the environment for people working at Zenimax might become much worst with most current employees being subject to extreme scrutiny of everything they do and maybe on other places too. In fact it might push companies not to directly hire talent and to just use devs as contractors with extremely strict terms that means all they create belongs exclusively to them and such.

 

There's no such thing as stealing employees. Zenimax told John Carmack not to work on VR - he clearly wanted to work on VR, so it's only natural that he left. Zenimax screwed that up for themselves, so much that they're now scrambling to buy up VR developers (they literally announced one purchase just hours before the verdict in this case).

[Master Disaster]

The trial between Zenimax Studios and Oculus is over and the judge awarded Zenimax a half billion dollar compensation for breach of NDA and patent infringement.

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A Dallas, Texas jury today awarded half a billion dollars to ZeniMax after finding that Oculus co-founder Palmer Luckey, and by extension Oculus, failed to comply with a non-disclosure agreement he signed.

The judge did make it clear Oculus did not "misappropriate trade secrets" however

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In awarding ZeniMax $500 million, the jury also said that Oculus did not misappropriate trade secrets as contended by ZeniMax.

The sum of the compensation award is broken down as follows

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Of the $500 million, Oculus is paying out $200 million for breaking the NDA and $50 million for copyright infringement. Oculus and Luckey each have to pay $50 million for false designation. And former Oculus CEO Brendan Iribe has to pay $150 million for the same, final count.

An Oculus spokesperson made the following statement after the trial

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Oculus said they will be appealing, but that they look forward to eventually putting the case behind them.

 

“The heart of this case was about whether Oculus stole ZeniMax's trade secrets, and the jury found decisively in our favor,” an Oculus spokesperson told Polygon. “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. “

Zenimax are now saying they might try and get the rift removed from sale, at least temporarily.

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ZeniMax tells Polygon that in light of the decision, it may seek an injunction to stop the sale of Oculus Rift headsets, at least temporarily.

 

Robert Altman, ZeniMax’s Chairman and CEO, added that “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.”

http://www.polygon.com/2017/2/1/14474198/oculus-lawsuit-verdict

 

Such an interesting verdict, Oculus won the case but still ended up paying compensation.

 

Also Zenimax, no one is buying rifts anyway so why waste money trying to get sales blocked?

[Humbug]

I don't see any basis for blocking Rift sales... Going by the case verdict

[Master Disaster]

2 minutes ago, Humbug said:

I don't see any basis,for blocking Rift sales... Based on the case verdict

Patent infringement should be enough, at least to get the ball rolling but its such a waste of money to do so. Zenimax may as well burn the compensation money TBH.

[Master Disaster]

Oh crap, I just realised I put a half trillion dollars in the title, editing it right now

[deleted_member_030719]

$200mil for an NDA? Jesus... 

[Delicieuxz]

In saying that they might file for injunction, ZeniMax is just trying to keep their game-face going, to protect the $500 million award that they currently have coming to them - but which will be up for question once Oculus files their appeal.

 

ZeniMax's statements following the verdict are completely distanced from what the actual verdict is, and is basically ZeniMax saying whatever words makes it sound like their original claim was legitimate, when ZeniMax's accusations were found to be false.

 

Basically, I think it's vapid money-motivated rhetoric from ZeniMax, since they still have to successfully make it through a challenge to the $500 verdict before they can get their hands on any money.

[Master Disaster]

32 minutes ago, Jed M said:

$200mil for an NDA? Jesus... 

 

31 minutes ago, Delicieuxz said:

In saying that they might file for injunction, ZeniMax is just trying to keep their game-face going, to protect the $500 million award that they currently have coming to them - but which will be up for question once Oculus files their appeal.

 

ZeniMax's statements following the verdict are completely distanced from what the actual verdict is, and is basically ZeniMax saying whatever words makes it sound like their original claim was legitimate, when ZeniMax's accusations were found to be false.

 

Basically, I think it's vapid money-motivated rhetoric from ZeniMax, since they still have to successfully make it through a challenge to the $500 verdict before they can get their hands on any money.

I agree the amount does seem to be a little excessive but I don't see any judge undoing the verdict, I mean patent infringement and breach of NDA are both pretty black or white offenses.

 

I think the most Oculus can hope for is a reduction in the payment amounts but either way they are paying Zenimax something.

 

It does make me wonder if the judge deliberately ordered a high payment amount knowing it would be reduced on appeal? Does anybody know if they base patent infringement compensation on percentage of profits earned through sales of the item in breach or is it just a number the judges pulls out of thin air?

 

As for Zenimaxs injunction claims, I'm not sure if its rhetoric or not. Now they have a proven case of patent infringement its reasonable that a court would grant a temporary halt on sales until a license agreement can be worked out. My question would be if that's worth Zenimaxs time and money. If Zenimax were serious they'd be better off allowing Oculus to carry on selling units and instead ask for license payments starting from the date of the trial verdict, if Oculus aren't selling units then they can't be paying royalties either.

[Delicieuxz]

Here's John Carmack's response to the verdict: John Carmack Rips Expert in $500 Million Case: ‘The Internet Would Have Viciously Mocked The Analysis’

And ZeniMax's full statement: Oculus Vows Appeal of $500 Million Verdict, ZeniMax Threatens Injunction

[Fetzie]

3 hours ago, Delicieuxz said:

Here's John Carmack's response to the verdict: John Carmack Rips Expert in $500 Million Case: ‘The Internet Would Have Viciously Mocked The Analysis’

And ZeniMax's full statement: Oculus Vows Appeal of $500 Million Verdict, ZeniMax Threatens Injunction

The internet viciously rips anything though.

[patrickjp93]

3 hours ago, Delicieuxz said:

Here's John Carmack's response to the verdict: John Carmack Rips Expert in $500 Million Case: ‘The Internet Would Have Viciously Mocked The Analysis’

And ZeniMax's full statement: Oculus Vows Appeal of $500 Million Verdict, ZeniMax Threatens Injunction

If Carmack wants to make that legal argument, he can go right ahead and humiliate himself further. I agree with the analysis given. It's air-tight.

[Delicieuxz]

Well, here is more on him making his arguments: https://arstechnica.com/gaming/2017/02/doom-co-creator-defends-his-code-against-zenimax-copying-accusations/

[Master Disaster]

29 minutes ago, patrickjp93 said:

If Carmack wants to make that legal argument, he can go right ahead and humiliate himself further. I agree with the analysis given. It's air-tight.

Not very often I agree with you but this is one of those times. Carmack obviously used his knowledge from ID while working at Oculus and trying to deny that is the equivalent of the 5 year old whose face is covered in chocolate stamping his feet and denying he took the chocolate bar.

[Sakkura]

4 hours ago, Master Disaster said:

 

I agree the amount does seem to be a little excessive but I don't see any judge undoing the verdict, I mean patent infringement and breach of NDA are both pretty black or white offenses.

 

I think the most Oculus can hope for is a reduction in the payment amounts but either way they are paying Zenimax something.

 

It does make me wonder if the judge deliberately ordered a high payment amount knowing it would be reduced on appeal? Does anybody know if they base patent infringement compensation on percentage of profits earned through sales of the item in breach or is it just a number the judges pulls out of thin air?

 

As for Zenimaxs injunction claims, I'm not sure if its rhetoric or not. Now they have a proven case of patent infringement its reasonable that a court would grant a temporary halt on sales until a license agreement can be worked out. My question would be if that's worth Zenimaxs time and money. If Zenimax were serious they'd be better off allowing Oculus to carry on selling units and instead ask for license payments starting from the date of the trial verdict, if Oculus aren't selling units then they can't be paying royalties either.

There was no patent infringement. There was copyright and trademark infringement.

 

The judge did not order anything. This verdict was from a jury. They simply filled out a form with like 50+ questions, no elaboration beyond yes/no and $ figures.

 

Oculus was not found guilty of the main charges, so there are no grounds whatsoever for an injunction.

1 hour ago, patrickjp93 said:

If Carmack wants to make that legal argument, he can go right ahead and humiliate himself further. I agree with the analysis given. It's air-tight.

You haven't seen the basis for the verdict, so you're just talking out your backside.

35 minutes ago, Master Disaster said:

Not very often I agree with you but this is one of those times. Carmack obviously used his knowledge from ID while working at Oculus and trying to deny that is the equivalent of the 5 year old whose face is covered in chocolate stamping his feet and denying he took the chocolate bar.

Carmack is 100% allowed to use his general knowledge and abilities for Oculus, those are not locked to his prior employer. Also much of what Zenimax tried to hit him for was stuff he made for Armadillo Aerospace, so obviously Zenimax has no claim to that at all.