The Oculus Vs Zenimax War Continues: Facebook Challenges Proposed Oculus Sales Ban

The Zenimax lawsuit against Oculus concluded in March with an eye watering $500 million in damages, however the war is clearly not over as Facebook is challenging a proposed court order tabled by Zenimax banning sales of all Oculus products today, claiming it would “serve no one but ZeniMax”.

A lot has happened since we previously reported the result of the lawsuit, in which Oculus was acquitted of stealing trade secrets but were found to have infringed Zenimax’s copyright and trademarks as well as breaching a non-disclosure agreement. Zenimax immediately moved to try and get a court order blocking sales, as well as filing suit against Samsung, Oculus’ technology partner for the Gear VR, a lawsuit as bold and provocative as you can get in tech circles.

As the court hearing into whether ZeniMax will get its sales block is heard today in a Dallas court, there are a number of questions and barriers in the way.

How do you even get a sales block?

For ZeniMax, damages are simply not enough. Publishing VR games on every headset other than Oculus isn’t enough. ZeniMax want to file an injunction to stop Oculus selling the Oculus Rift, either for a temporary period or until they removed the infringing code. But how plausible is this?

In a case like Oculus vs ZeniMax, it isn’t very easy to actually block sales of a product, given it is a very real disruption of business, and when monetary damages are involved generally business is allowed to continue to allow unless there is a very good reason otherwise. The district judge on this case, Judge Ed Kinkeade will need to consider not only the existing or potential harm to both Zenimax and Oculus, but also what would be in the public interest and whether Facebook have a chance to win an appeal they will inevitably file.

Oculus, for their part have mentioned the difficulties in re-engineering their code, noting that it is not simply a matter of removing the code found to be infringing on ZeniMax’s intellectual property but also all the interdependent systems based on it. Oculus have claimed they would need to hire clean-room engineers to make a huge number of these changes, at a cost that neither ZeniMax nor Oculus representatives commented on.

There may be a reason for this, as Oculus are both appealing at today’s hearing to have the verdict in Feburary overturned entirely or reduced, with the damages totalling no more than $50 million, to reflect the value of a “lump-sum license to use copyrighted material”.

Oculus have also argued that a sales ban would be unfair to Oculus, its customers and business partners, claiming it would be used by Zenimax “as leverage to try and extract money” from the VR company.

What Happens Next?

Today will really matter in terms of Oculus’ short term future, although given the deep pockets of Facebook will likely be more of a problem in terms of perception and availability. Questions may well be asked about Facebook and Mark Zuckerberg’s patience regarding virtual reality in general, and the increasingly dysfunctional Oculus in particular. Given that since Zuckerberg bought Oculus there has been a massive lawsuit, allegations that Oculus’ CTO has stolen trade secrets, allegations that their wunderkind public face was part of a political pressure group and the questions regarding his exit from Oculus, it would perhaps come as no surprise if Zuckerberg cut the experiment here. However, given Facebook Spaces and some particularly aggressive marketing of Oculus, it’s just as likely Facebook are here for the long term with Oculus, with perhaps more tempered expectations.

For ZeniMax, it will be interesting to see how far their litigious streak continues. Given the not insubstantial damages awarded to them, it is a little surprising that they are attempting to shut down Oculus’ business, which suggests this is far more than just business for a company more commonly known for the battles that take place in their games than outside.

The main thing that is known is that this is not over, but once the judgement is known in this case, rest assured VRS will provide an update.