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Oculus owes ZeniMax $500 million after founder Palmer Luckey breaks NDA [UPDATED]

by Joey Davidson | February 1, 2017

UPDATE: Two things, as we’ve received clarification from a PR rep. First, the total Zenimax in the suit was actually $6 billion, with $4 billion towards punitive and $2 billion to actual damages.

Second, Oculus released this statement.

“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.”

Original Story: Over the last few weeks, a lawsuit has been unfolding between Oculus, the Facebook-owned company behind the Oculus Rift, and ZeniMax, the parent company of Bethesda. Yes, that Bethesda. That’s now finished, and the jury has ordered that Oculus pay ZeniMax $500 million.

The two companies have a long and unique history as it relates to the development of virtual reality. In 2014, ZeniMax wound up suing Oculus, alleging that the company had essentially pulled off a corporate heist and stolen trade secrets in order to design and produce the Oculus Rift.

In closing arguments, as detailed by Polygon, ZeniMax’s counsel argued that Oculus owed the company closer to $4 billion spread over compensation and damage. The jury ruled that Oculus had not misappropriated trade, instead ruling that Oculus CEO Palmer Luckey failed to comply with a signed non-disclosure agreement. The bill for breaking the NDA? Half a billion dollars.

Oculus is lucky to be owned by Facebook

I can’t pretend to know how Oculus would have weathered this storm if it were still an independent company. Thanks to being acquired by Facebook, though, it has a parent company that can likely handle the $500 million loss and the hefty legal fees. Facebook bought Oculus in a deal worth $2 billion. Interestingly, it only paid around $400 million in cash for the purchase, the rest came from Facebook stock.

We’ll see how this shakes out, though I can’t imagine Zuckerberg’s too happy right now.

Polygon

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Joey Davidson

Joey Davidson leads the gaming department here on TechnoBuffalo. He's been covering games online for more than 10 years, and he's a lover of all...Joey Davidson leads the gaming department here on TechnoBuffalo. He's been covering games online for more than 10 years, and he's a lover of all...