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Facebook ordered to pay $500 million in damages over VR suit

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Facebook co-founder and chief executive, Mark Zuckerberg, speaks at an Oculus developers conference while wearing a virtual reality headset in San Jose, California

Glen Chapman | AFP | Getty Images
Facebook co-founder and chief executive, Mark Zuckerberg, speaks at an Oculus developers conference while wearing a virtual reality headset in San Jose, California

Facebook’s Oculus lost a case against game maker ZeniMax, leaving the tech company on the hook for $500 million.

A jury ordered Facebook to pay $500 million in damages to ZeniMax due to theft of intellectual property on Wednesday.

Facebook’s Sheryl Sandberg told CNBC’s Julia Boorstin that she was “disappointed in certain elements of the decision.” Sandberg added she was “considering our options to appeal,” and the verdict was “not material to our financials.”

ZeniMax sued Oculus for allegedly stealing its intellectual property. The company claimed Oculus founder Palmer Luckey “commercially exploited” Zenimax computer code and trade secrets in order to develop its products. It also said Oculus’ VR device Oculus Rift was “primitive” until John Carmack, Oculus chief technology officer and founder of a company owned by ZeniMax, improved on the device using his knowledge from his previous work as a ZeniMax employee.

The jury found Oculus guilty of copyright infringement, failure to comply with a non-disclosure agreement, and misuse of Oculus trademarks (“false designation.”) However, it found Oculus innocent of other charges, including theft of trade secrets.

Oculus said it would appeal the ruling.”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,” the company told CNBC. “We look forward to filing our appeal and eventually putting this litigation behind us.”

Facebook purchased Oculus in 2014. Facebook CEO Mark Zuckerberg testified in court he was not aware of the intellectual property claims between Oculus and ZeniMax.


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