BLOG

07 February
Facebook FACES $500 million lawsuit
  • by: Fidel Nwamu

FACEBOOKFacebook has been ordered by a Texas jury to pay $500 million as a result of a lawsuit by gaming company ZeniMax for trade secret misappropriation. ZeniMax claims that Oculus co-founder Palmer Luckey violated an NDA agreement in order to build early prototypes of its Oculus Rift headset. ZeniMax was seeking as much as $6 billion in damages. A few years ago, Mark Zuckerberg, chief executive of Facebook, bought virtual reality start-up Oculus VR for more than $2 billion. Shortly thereafter, ZeniMax Media sued Oculus VR including Facebook as one of the defendants. Zenimax also claimed for copyright and trademark infringement by Facebook.

ZeniMax also claims that one “Carmack [(a ZeniMax employee)] secretly and illegally copied thousands of documents containing Zenimax’s intellectual property from his computer at Zenimax to a USB storage device, which he wrongfully took with him to Oculus.” “We are pleased that the jury in our case in the US District Court in Dallas has awarded Zenimax $500m for the defendants’ unlawful infringement of our copyrights and trademarks,” said Zenimax CEO Robert Altman. In part, the company lost because Palmer Luckey, violated an NDA agreement between ZeniMax and Oculus.

Commentary – We at Nwamu, PC have heard comments from some VCs that NDAs have no value; we strongly disagree with this position.