(Reuters) - A U.S. jury in Texas on Wednesday ordered Facebook Inc, its virtual reality unit Oculus, and other defendants to pay a combined $500 million to ZeniMax Media Inc, a video game publisher that says Oculus stole its technology.

The jury in federal court in Dallas found Oculus, which Facebook acquired for about $2 billion in 2014, used ZeniMax’s computer code to launch the Rift virtual-reality headset.

ZeniMax alleges that video game designer John Carmack developed core parts of the Rift’s technology while working at a ZeniMax subsidiary. Oculus hired Carmack in 2013.

Facebook’s stock was not impacted by the verdict. The company’s shares were up 3 percent in after-hours trading following the release of a fourth-quarter earnings report that beat expectations.

ZeniMax Chief Executive Robert Altman hailed the verdict and said in a statement the company was considering seeking an order blocking Oculus and Facebook from using its code. It is unclear what impact that would have on the Rift’s market availability.

Though the jury ruled that none of the defendants misappropriated ZeniMax’s trade secrets, it found Oculus’ use of computer code directly infringed on ZeniMax’s copyright. The jurors held Carmack and different Oculus co-founders Palmer Luckey and Brendan Iribe liable for forms of infringement.

The jury also found Oculus liable for breaching a non-disclosure agreement Luckey signed with ZeniMax in 2012, when he began corresponding about virtual reality with Carmack. The two met on an online forum.

Well-known for helping to conceive games such as “Quake” and “Doom,” Carmack worked for id Software LLC before that company was acquired by ZeniMax. He is now the chief technology officer at Oculus.

Facebook Chief Executive Mark Zuckerberg testified last month during the three-week trial that none of ZeniMax’s proprietary code was incorporated into the Rift.

Though the jury did not find Facebook directly liable, it would likely be on the hook for damages owed by its subsidiary, absent an agreement stating otherwise.

In a statement, Oculus spokeswoman Emily Bauer noted the jury’s finding on trade secrets theft and said the company would appeal. “We’re obviously disappointed by a few other aspects of today’s verdict, but we are undeterred,” she said. “Oculus products are built with Oculus technology.”</s>Feb 1 (Reuters) - A U.S. jury in Texas on Wednesday ordered Facebook Inc., its virtual reality unit Oculus, and other defendants to pay a combined $500 million to ZeniMax Media Inc., a video game publisher that says Oculus stole its technology.

The jury in federal court in Dallas found Oculus, which Facebook acquired for about $2 billion in 2014, used ZeniMax’s computer code to launch the Rift virtual-reality headset. ZeniMax alleges that video game designer John Carmack developed core parts of the Rift’s technology while working at a ZeniMax subsidiary. Oculus hired Carmack in 2013.

Well-known for helping to conceive games such as "Quake" and "Doom," Carmack worked for id Software LLC before that company was acquired by ZeniMax. He is now the chief technology officer at Oculus.

Facebook chief executive Mark Zuckerberg testified last month during the three-week trial that none of ZeniMax’s proprietary code was incorporated into the Rift.

Oculus did not immediately respond to a request for comment. (Editing by Chris Reese)</s>Facebook Inc. and its co-defendants were ordered to pay $500 million to ZeniMax Media Inc. after a jury found the social network's Oculus VR unit unfairly used ZeniMax code to build a virtual-reality headset.

The verdict Wednesday was another setback for Oculus, which Facebook bought in 2014 for more than $2 billion. The unit already was grappling with the bungled launch last year of its Rift virtual-reality headset and mounting competition from HTC Corp. and Sony Corp.

"Oculus products are built with Oculus technology," the spokeswoman said in a prepared statement. "Our commitment to the long-term success of VR remains the same, and the entire team will continue the work they've done since day one -- developing VR technology that will transform the way people interact and communicate."

Shortly after Facebook's deal for Oculus was announced, ZeniMax sued. The videogame publisher claimed one of its former employees, John Carmack, took proprietary code with him when he joined Oculus. ZeniMax claimed Oculus improperly used the code and "technical know-how" belonging to ZeniMax to create the Rift headset.

Facebook, Oculus and three employees -- Mr. Carmack, Oculus's technology chief; Oculus co-founder Palmer Luckey; and former Oculus Chief Executive Brendan Iribe -- were named in the suit. The jury found Oculus infringed on copyrights and failed to comply with a nondisclosure agreement. Oculus was ordered to pay $300 million, while Mr. Iribe was ordered to pay $150 million and Mr. Luckey was ordered to pay $50 million.

"The heart of this case was about whether Oculus stole ZeniMax's trade secrets, and the jury found decisively in our favor," the Oculus spokeswoman said.

During the three-week trial in Dallas, Facebook CEO Mark Zuckerberg, who wasn't a defendant, testified ZeniMax's claims were false.

"It is pretty common when you announce a big deal or do something that all kinds of people just kind of come out of the woodwork and try to claim that they own some portion of the deal," Mr. Zuckerberg said during hours of testimony. "I think, like probably a lot of the people in the court, I had never even heard of ZeniMax before."

During the trial, Mr. Zuckerberg said he expects virtual reality to be the next major computing platform and that it will take as long as 15 years of investment to make VR a mainstream platform.

"Technology is the foundation of our business and we consider the theft of our intellectual property to be a serious matter," ZeniMax CEO Robert Altman said in a prepared statement.

ZeniMax said it is considering further steps, including whether to seek an injunction restraining Facebook from using code the jury found infringed ZeniMax's copyrights.

The lawsuit was filed in U.S. District Court for the Northern District of Texas.</s>DALLAS (AP) — Facebook’s virtual-reality subsidiary and two of its founders are facing a sobering reality after a jury hit them with a $500 million bill for infringing on the rights of a video-game maker.

The verdict reached Wednesday in a Dallas federal court represents about one-fourth of the $2 billion that Facebook paid two years ago to buy Oculus, a developer of virtual-reality gear and software.

The jury concluded that Oculus and co-founders Palmer Luckey and Brandon Iribe infringed on ZeniMax Media’s copyrights and trademarks as they built their products.

Oculus is on the hook for $250 million in damages. Iribe is responsible for $150 million, and Luckey is saddled with the remaining $50 million.

Oculus says it will appeal.

© Copyright 2017 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.</s>A U.S. jury in Texas on Wednesday ordered Facebook, its virtual reality unit Oculus, and other defendants to pay a combined $500 million to ZeniMax Media Inc., a video game publisher.

The jury awarded the sum after determining that Oculus executives violated a ZeniMax non-disclosure agreement in the early days of building the Oculus Rift VR headset.

it decided that Oculus wasn't guilty of misappropriating trade secrets, another of ZeniMax's charges.

According to Polygon, the $500 million award is composed of $200 million for NDA violation, plus $50 million for copyright infringement, a $50 million award against both Oculus and co-founder Palmer Luckey for false designation, and $150 million against former CEO Brendan Iribe for false designation.

An Oculus spokesperson told Polygon that 'the heart of this case was about whether Oculus stole ZeniMax's trade secrets, and the jury found decisively in our favor.'

The firm said it would appeal the verdict.

ZeniMax had alleged that video game designer John Carmack developed core parts of the Rift's technology while working at a ZeniMax subsidiary.

Well-known for helping to conceive games such as 'Quake' and 'Doom,' Carmack worked for id Software LLC before that company was acquired by ZeniMax.

He is now the chief technology officer at Oculus.

Facebook chief executive Mark Zuckerberg testified last month during the three-week trial that none of ZeniMax's proprietary code was incorporated into the Rift.

The 32-year-old swapped his typical hoodie, gray T-shirt and jeans for a crisp business suit as he defended Facebook's VR headset in a Dallas court today.

The lawsuit, filed in May 2014, alleges that former id Software co-founder John Carmack stole the firm's intellectual property when he left the company to become Oculus' chief technology officer in 2013.

Facebook shipped the first Oculus Rift headsets in March 2016 at a price of $599.

The billionaire told the court he had 'never even heard of ZeniMax before' and said his legal team would not be spending much time on something they didn't think was credible.

Zenimax - the parent company of id Software which has produced iconic video games such as Doom - also claims Facebook purchased Oculus with 'full awareness' that Carmack allegedly stole the tech.

During opening remarks, a lawyer called it 'one of the biggest technology heists ever.'

Facebook have denied all claims, and have stated that ZeniMax filed the suit as a 'transparent attempt' to profit from their purchase of Oculus.

The Facebook CEO also revealed for the first time that the company actually paid $3 billion to buy Oculus - rather than the widely reported figure of $2.3billion.

He said Facebook paid an additional $700 million to retain employees and another $300 million payout for hitting targets.

ZeniMax's lawyer Tony Sammi asked Zuckerberg: 'If you steal my bike, paint it, put a bell on it, does that make it your bike?'

To which Zuckerberg replied 'no.'

He also pressed the billionaire for an answer as to why Carmack allegedly had code and more than 10,000 documents from his former company.

'No, I wasn't aware of that,' Zuckerberg responded. 'It's something we should investigate.'

Zuckerberg also said that Carmack has not been disciplined over the allegations because 'it would be wrong to discipline employees for claims that we believe are wrong.'</s>Facebook has been ordered to pay $500m (£395m) after its virtual reality division was found to use stolen technology.

The ruling took the shine off the world’s biggest social network posting record fourth-quarter profits and signing up millions of new users.

Oculus, the virtual reality headset company Facebook bought in 2014 for $2bn, was found by a US court to have used technology developed by ZeniMax, an American video game company, after a trial in which Facebook’s founder Mark Zuckerberg and Oculus creator Palmer Luckey both testified.

Facebook said it would appeal the decision after a jury found Oculus guilty of copyright infringement, breaking a non-disclosure agreement, and misusing trademarks. However, Oculus was found innocent of a charge of stealing trade secrets from Zenimax.</s>Facebook and two founders of its Oculus virtual reality technology have been ordered to pay $500m after losing a lawsuit.

A jury in Dallas found in favour of video game maker ZeniMax Media, which had claimed the VR system was stolen.

Oculus, which was bought by Facebook two years ago for $2bn, will have to pay $300m in damages.

The lawsuit claimed the Oculus Rift headset was developed using code taken from ZeniMax’s sofware.

The claim that trade secrets had been stolen was dismissed by the jury, but Oculus was found liable for copyright infringement and other violations.

As part of that judgment, Palmer Luckey and Brendan Iribe, co-founders of the Oculus system, will have to contribute a further $50m and $150m respectively to ZeniMax Media, whose board includes President Donald Trump’s younger brother Robert.

Oculus said it planned to appeal against the ruling.

The judgment was made just moments before its parent firm revealed its latest financial results.

Facebook’s profits more than doubled to $3.56bn (£2.8bn) in its fourth quarter after further strong growth in its mobile advertising business, which now accounts for 84% of its total ad revenue.

That was despite a previous warning from Facebook last year that ad growth would probably slow meaningfully due to limits on ad load – the total number Facebook can show to each user.

Its share price – up 16% this year – rose more than 2% in after-hours trading.

Chief executive Mark Zuckerberg told analysts the company expects a major ramp-up in hiring and other spending during 2017 as it invests in video and other priorities.

Mr Zuckerberg said the focus would be on generating short-form, original videos, especially professionally created episodic content produced week-to-week.</s>Facebook-owned Oculus has been ordered to pay half a billion dollars to games company ZeniMax after a jury determined that the virtual reality company’s CEO Palmer Luckey failed to comply with a non-disclosure agreement.

ZeniMax sued Oculus in May 2014, months after it was acquired by Facebook, alleging that the VR startup improperly used code from ZeniMax to build the Rift VR headset.

ZeniMax is the parent company of ID Software, maker of Doom and Quake games, whose co-founder John Carmack is now the chief technology officer of Oculus. Luckey exchanged emails with Carmack, who was still at ID Software, when he was developing a prototype of the company’s flagship headset.

Oculus plans to appeal the decision and said that the company is committed to the “long-term success of VR”.

The news came as Facebook announced a 51% jump in its fourth-quarter revenue, driven by its mobile advertising business, which accounted for 84% of revenues. Bad publicity over fake news failed to leave any mark on the quarter, which ended 31 December. Revenues rose to $8.81bn and Facebook’s quarterly profit more than doubled to $3.57bn from $1.56bn a year earlier. Some 1.86 billion people were active on Facebook at the end of December, up 17% from a year earlier.

In short, Facebook can afford the $500m.

During closing arguments, ZeniMax’s attorney called for a much larger award – $2bn in compensation and $2bn in damages. Oculus’s attorney, Beth Wilkinson, argued the lawsuit was driven by jealousy and anger, not facts.

During the three-week trial, Facebook’s chief executive, Mark Zuckerberg, testified, characterizing the plaintiffs as opportunists.

“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,” he said.

The case was tried in a district court in the north district of Texas. Of the $500m, Luckey will have to pay $50m in the lawsuit, while former Oculus CEO Brendan Iribe has been ordered to pay $150m – both for false designation. The company must also pay $200m for NDA violation, $50m for copyright infringement and $50m for false designation. The jury decided that Oculus didn’t steal trade secrets, as alleged by ZeniMax.

“The heart of this case was about whether Oculus stole ZeniMax’s trade secrets, and the jury found decisively in our favor,” an Oculus spokeswoman said in a statement.

“We’re obviously disappointed by a few other aspects of today’s verdict, but we are undeterred. Oculus products are built with Oculus technology. Our commitment to the long-term success of VR remains the same, and the entire team will continue the work they’ve done since day one – developing VR technology that will transform the way people interact and communicate. We look forward to filing our appeal and eventually putting this litigation behind us.”</s>Facebook and other defendents could be forced to fork out $500m (£395m) after a US court found they unlawfully useda firm’s virtual reality technology.

Facebook-owned Oculus used computer code belonging to video game developer Zenimax to launch its own VR headset, a jury said.

Oculus said it was “disappointed” and would appeal against the ruling.

The case came the same day Facebook revealed its net profit more than doubled to $3.6bn in the fourth quarter.

“We are pleased that the jury in our case in the US District Court in Dallas has awarded Zenimax $500m for defendants’ unlawful infringement of our copyrights and trademarks,” said Zenimax chief executive Robert Altman.</s>A US court has ordered Facebook's virtual reality subsidiary Oculus and its executives to pay game developer ZeniMax Media $500 million in damages over copyright infringement and violation of non-disclosure agreement.

 

 The Dallas court order comes weeks after Facebook CEO Mark Zuckerberg denied the allegations of stealing the ZeniMax technology and said that it used its own technology to create the Oculus VR headset.

 

 Facebook bought Oculus VR for more than $2 billion in 2014 and the dispute started just after the acquisition when ZeniMax Media sued Oculus of stealing important elements of its technology.

 

 According to a report in Variety on Thursday, ZeniMax was seeking as much as $4 billion in the case. 

 

 However, the jury threw out some claims, and primarily focused on the fact that Oculus executives violated their non-disclosure agreements. 

 

 ZeniMax was quoted as saying that it was pleased with the verdict, but left the door open for additional legal proceedings.

 

 "We will consider what further steps we need to take to ensure there will be no ongoing use of our misappropriated technology," it said. 

 

 ZeniMax will seek an injunction to restrain Oculus and Facebook from their ongoing use of computer code that the jury found an infringment of its copyrights.

 

 In an email, Oculus said: "We're obviously disappointed by a few other aspects of today's verdict, but we are undeterred." 

 

 Facebook though has not responded so far to the court verdict.

 

 Despite this feud, Facebook may invest more than $3 billion in the next decade to reach its goal of providing hundreds of millions of people with a good virtual reality experience.
A jury finds in favor of video game publisher ZeniMax Media after the trial of its copyright lawsuit against Oculus and Facebook, regarding virtual reality coding.