Facebook VR plan faces threats: court or prohibit Oculus from using infringement code

On Thursday, video game publisher ZeniMax asked the US Dallas federal judge to issue an injunction prohibiting Facebook's Oculus department from using or distributing controversial code embedded in Oculus' software for external companies to help them develop Rift VR games.

Although the judge may have to wait a few months to decide whether to approve the ban, intellectual property lawyers believe that ZeniMax's ban on grants is highly likely to be approved, which will cause Facebook to face difficult choices: either pay a high settlement fee or respond to the lawsuit A lawsuit that could threaten its position in the industry.

Facebook is still actively responding. Oculus spokesman Tera Randall said on Thursday that the company would appeal the jury's unfavorable judgment against Oculus and its co-founders on February 1. The ruling at the time required Oculus to pay $500 million and found that the company's co-founders Palmer Luckey and Brendan Iribe violated the ZeniMax copyright code, violating the confidentiality agreement.

Randall did not comment further on the issues related to this article.

Once ZeniMax's ban is approved, Oculus must stop distributing code to developers or stop selling games that use the code. Facebook bought Oculus for $3 billion in 2014.

Stephanie Llamas, a game market research firm SuperData analyst, said such a court ban would pose a huge obstacle to Oculus. This will give competitors including HTC, Sony and Alphabet an important opportunity to be a pioneer.

Rift's own sales will not be banned, but Lamas said that the lack of game content will hinder the sale of this product, making it inferior to the competition with HTC Vive and Sony PlayStaTIon VR.

The virtual reality eyewear market is currently small, with hardware and software sales totaling $2.7 billion in 2016 and is primarily limited to the gaming market. But Facebook CEO Mark Zukerburg once predicted that the technology "will be part of the daily lives of billions of people," revolutionizing the social media, entertainment and medical industries.

SuperData estimates that the virtual reality market will reach $37 billion by 2020. Similarly, investment firm Cantor Fitzgerald also released a report last year, which is expected to contribute 10% of Facebook's revenue to Facebook within four years.

ZeniMax's lawsuit stems from Raj's communication with video game developer John Carmack in 2012. Raj was signed a confidentiality agreement with ZeniMax for the matter.

Carmic joined Oculus in 2013 as a CTO. ZeniMax filed a lawsuit in 2014, accusing Carmack of working at the company as a key element of Rift. Facebook accused ZeniMax of the "sour grapes" mentality during the trial because they missed the major trend of virtual reality.

Zuckerberg also testified in court that "the idea that Oculus's products are based on the technology of others is wrong."

The jury found that Oculus did not steal trade secrets but found it infringed on ZeniMax's intellectual property rights and violated the confidentiality agreement.

Intellectual property lawyers believe that the factors considered by the judge include whether ZeniMax will continue to be harmed and whether the compensation is sufficient to compensate for its losses.

Edward Naughton, a Boston-based copyright attorney, said ZeniMax's defense was powerful because its technology was still being used without its permission, and the jury ruling did not compensate for all the losses.

"I think their chances are great," Norton said.

New York copyright attorney Mitchell Shelowitz pointed out that the confidentiality agreement clearly states that ZeniMax has the right to obtain a ban in the event of default.

But not all lawyers believe that ZeniMax's position is strong. Chicago intellectual property lawyer Joshua Rich believes that Facebook has a good chance to overturn the ban, and they can argue that Oculus and ZeniMax are not directly competitors, so the latter's performance has not been affected.

Norton said that if Facebook can successfully pass the "ban war", the pattern will be reversed. Facebook may think that its defense in the appeal is very powerful, or that it has sufficient cash on hand, and hopes that ZeniMax can reduce the amount of settlement.

“Facebook is well funded,” Norton said. “So you can drag your opponent into a lawsuit.” (书聿)

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