Earlier this year, ZeniMax won a $500 million judgment against Facebook-owned Oculus and many of its executives for copyright infringement, false designation, and breach of NDA (edit: an earlier version of this story mischaracterized the verdict). That wasn’t the end of Oculus’ legal trouble, though. The company is now fighting off a proposed injunction that is seeking to bar the sale of any hardware or software “derived” from ZeniMax’s technology or to enforce a 10-year, 20-percent royalty to ZeniMax on that hardware.
US District Judge Ed Kinkeade of the Southern District of Texas heard arguments in that injunction case Tuesday, and he also addressed a ZeniMax request for an additional $500 million in false designation damages and lawyer’s fees. In court filings, ZeniMax argues that “the jury verdict clearly establishes that Oculus wrongly obtained ZeniMax VR technology under the NDA and used it… to establish a business that would not have existed without ZeniMax.”
While Oculus’ sale to Facebook “[made] tycoons out of the individual Defendants,” ZeniMax writes, the company “never received a penny for its investment in this revolutionary technology—even though it was ZeniMax that had proven its value to the world long before Defendants ever came along.” The company also points to specific language in the Oculus/ZeniMax NDA that establishes an injunction would be called for if that agreement was broken.
The $500 million in damages already awarded by a jury is “inadequate remedy for ongoing harm,” ZeniMax argues, because that amount “is an insufficient incentive for Defendants to cease infringing.” To argue this, the company cites Facebook COO Sheryl Sandberg, who said in an interview that the jury award was “not material to [Facebook’s] financials.”
Oculus answers back
In its own court filings in response to the injunction motion, Oculus argues that “ZeniMax cannot show it is suffering continuing harm” from Oculus’ actions. On the contrary, Oculus argues that the trial found ZeniMax would likely suffer “zero” monetary harm in the future because of Oculus’ NDA breaches, which it says took place years ago and are not ongoing. “ZeniMax does not offer any products that compete with Oculus’s virtual-reality platforms and headsets,” the company points out.