Mark Zuckerberg, CEO of Facebook, appeared in a Dallas Federal Courtroom January 17, 2017, to testify in a lawsuit about accusations of theft of another company’s intellectual property. The lawsuit, ZeniMax Media v. Oculus VR, Inc., stems from allegations made by ZeniMax that Oculus stole technology from ZeniMax when they created their virtual reality headset.
Oculus VR, noted as one of the most prominent start-ups for its time, was purchased by Facebook for more than $2 billion in March of 2014. Zuckerberg stated that “Oculus’s mission is to enable you to experience the impossible. Their technology opens up the possibility of completely new kinds of experiences.”
Shortly after the acquisition announcement, ZeniMax filed suit with the United States District Court for the Northern District of Texas, Dallas Division against Oculus and Palmer Luckey. ZeniMax claimed “under a binding Non-Disclosure Agreement, ZeniMax provided [Oculus and Luckey] with access to intellectual property developed by ZeniMax after years of research and investment. This valuable intellectual property included copyright computer code, trade secret information, and technical know-how.” The lawsuit further alleged that Oculus and Luckey “have wrongfully taken that ZeniMax intellectual property and commercially exploited it for their own gain.”
One of ZeniMax’s core arguments in this case is that John Carmack, former ZeniMax employee, shared some of the technology ZeniMax was developing at the time with Palmer Luckey, a founder of Oculus. Carmack left ZeniMax in 2013 to join the Oculus team and is now the chief technical officer. ZeniMax’s attorney called Carmack’s and Facebook’s actions “one of the biggest technology heists ever.” Carmack’s attorneys disagreed and argued that the trade secrets were “the fruit of Mr. Carmack’s participation and involvement with Palmer Luckey and Oculus”.
Another argument by ZeniMax is that Facebook rushed into the purchase of Oculus and did not research and review details about the company. ZeniMax’s attorney, Tony Sammi, claimed if research was completed by Facebook it would have discovered the dispute with ZeniMax prior to the acquisition. Zuckerberg replied that negotiating deals quickly is part of the game when you are up against competing companies such as Google, Apple and Twitter, “[b]eing able to move quickly not only increases our chance of getting the deal done, but it keeps us from having to pay a lot more as the deal process drives out.”
Zuckerberg further noted that the Oculus technology was not even fully developed when Facebook purchased it. Sammi countered that “[i]mproving on that technology doesn’t make it yours. If you steal my bike, paint it and put a bell on it, does that make it your bike?” Zuckerberg replied “I’m here because I believe [ZeniMax is] false and it’s important to testify to that…It’s pretty common when you announce a big deal that people just come out of the woodwork and claim they own some part of the deal.” Zuckerberg said “[l]ike most people in the court, I’ve never even heard of ZeniMax before.”
If Facebook loses this lawsuit they face up to $2 billion in damages.