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ZeniMax Wins $500 Million Lawsuit Against Oculus

A Texas jury awarded video game publisher ZeniMax $500,000 after deciding that Palmer Luckey, founder of the virtual reality firm Oculus VR, violated a non-disclosure agreement while developing the Oculus Rift headset.

However, the jury found that Oculus VR was not guilty of stealing trade secrets from ZeniMax, which an Oculus spokesperson called "the heart of this case" in a statement to Polygon.

ZeniMax accused Palmer Luckey of illegally using virtual reality technology created by ZeniMax while creating the Rift, Oculus VR's flagship product. Reportedly, ZeniMax was seeking between $4 and $6 billion in damages. In 2014, social media giant Facebook bought Oculus VR for $2 billion.

While the $500,000 ruling—$50,000 of which will come out of Luckey's own pocket—is a big win for ZeniMax, this may not be the end of the conflict. A ZeniMax spokesperson claims that ZeniMax may seek an injunction prohibiting the sale of Oculus Rift systems until Oculus stops using "computer code that the jury found infringed ZeniMax's copyrights." Removing the Oculus Rift from store shelves, even temporarily, could have a profound effect on the fledgling virtual reality market, which includes competing products from HTC and Sony.

The core of ZeniMax's case against Oculus hinged on the argument that Luckey, a college dropout with very little formal engineering training, couldn't have produced the Oculus Rift headset on his own, and needed help from John Caramack—co-founder of id Software, which ZeniMax owns—to bring the project to fruition. Caramack, who experimented with virtual reality as a ZeniMax employee, left id in 2013 to join Oculus VR.

The Oculus Rift began life as a $250,000 Kickstarter project that ultimately raised over $2.5 million. A consumer version of the Rift began shipping in March, 2016, and despite a number of flaws, stands up as one of the few at-home virtual reality platforms that isn't a complete disaster.