Oculus ordered to pay $500 million in ZeniMax lawsuit

Facebook’s acquisition of Oculus just became a half billion more expensive.

A jury in Dallas, Texas has awarded ZeniMax Media $500 million after finding that Palmer Luckey (and by extension Oculus VR) violated the terms of a non-disclosure agreement. The jury also found Oculus guilty on charges related to false designation and copyright infringement. Oculus was notably found not guilty on charges related to claims by ZeniMax that the company stole trade secrets to create the Rift headset, Polygon reports.

Luckey must personally pay $50 million in the suit, while former Oculus CEO Brendan Iribe will be forced to pay $150 million.

Facebook is now telling TechCrunch that ZeniMax Media was actually seeking a reported $6 billion in this case, not the $4 billion that was previously reported. Given the maximum possible penalty,  this obviously isn’t the worst possible outcome for Facebook, a company that is likely able to view a $500 million judgment as a slap on the wrist, especially given the resources they have been devoting to their virtual reality efforts.

For its part, a spokesperson for ZeniMax Media said the company was “pleased” with the decision and is furthermore looking “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.”

Robert Altman, ZeniMax’s Chairman and CEO, said in a statement, “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.”

At the heart of this case was ZeniMax Media’s assertion that VR technology they had created was used illegally by Oculus founder Palmer Luckey to create the Rift headset, the core product of Oculus VR, which sold to Facebook for $2 billion in March of 2014. The company filed suit against Oculus asking for $6 billion in compensation and punitive damages from the court.

ZeniMax Media is likely not a company you’ve heard of, but if you follow the video game industry at all, some of the titles the company’s subsidiary studios have released will immediately stick out. ZeniMax owns Bethesda Softworks, which has published games like Skyrim (one of the best-selling video games of all time) and the Fallout series. The popular franchises carried by its several subsidiaries have earned ZeniMax a reported valuation of as much as $2.5 billion.

TechCrunch