Zuckerberg Denies Tech for Virtual-Reality Device Was Stolen

  • Facebook is defending $2 billion suit over Oculus Rift headset
  • ZeniMax Media claims Oculus VR poached designer before buyout

Mark Zuckerberg, saying it’s the first time he’s testified in a trial, vehemently denied claims that the virtual-reality headset maker acquired by Facebook Inc. in 2014 had stolen technology for the Oculus Rift.

Facebook’s co-founder and chief executive officer, who has hailed virtual reality as his company’s next big thing, was called to the witness stand Tuesday by ZeniMax Media Inc., which alleges that Oculus VR poached one of its star designers and purloined its intellectual property. The $2 billion trial in Dallas federal court is in its second week.

“I am aware of the claims,” Zuckerberg told jurors. “I’m here because I believe they’re false and it’s important to testify to that.”

ZeniMax has accused the social media giant of completing its acquisition of Oculus in July 2014 with “full awareness” that the “holy grail” know-how behind one of Silicon Valley’s most promising consumer devices was misappropriated.

“I’ve asked our team to look into this,” Zuckerberg said. “We have. Our conclusion is the claims are wrong.”

$84 Billion

If ZeniMax is successful at the trial, it would rewrite the story of how Facebook emerged at the forefront of the virtual-reality boom, with Microsoft Corp., Sony Corp., Alphabet Inc.’s Google and others competing for a piece of a market that’s forecast to exceed $84 billion in sales in 2020.

Zuckerberg testified that an e-mail from venture capitalist and long-time Facebook board member Marc Andreessen was the seed of his interest in Oculus.

Andreessen wrote that the Oculus headset “blew my brain wide open” and that the key to the company was the hiring of John Carmack, who became Oculus’s chief technology officer in August 2013. “I just wanted to give him all my money on the spot,” Andreessen said in the e-mail.

“He’s excited,” Zuckerberg testified, to chuckles across the courtroom.

Carmack, a creator of blockbuster video games Doom and Quake, worked for ZeniMax before he joined Oculus. ZeniMax claims Carmack was responsible for much of the critical early
development of the software and hardware for the virtual-reality headset before he was recruited away.

Young Hobbyist

Carmack acknowledged in testimony last week that he copied computer files containing work he did at ZeniMax when he left the company. But he denied using the material in his work for Oculus and credited Oculus founder Palmer Luckey, a young hobbyist, with developing an “elegantly simple” prototype with a wide field of view that evolved into the Oculus Rift which began shipping in March for $599. Luckey, another defendant in the lawsuit, hasn’t testified yet.

Zuckerberg said that three days after meeting Carmack in March 2014, he set out a timeline for a quick purchase of Oculus.

ZeniMax’s lawyer, Tony Sammi, tried to get Zuckerberg to confirm the announcement of the acquisition was delayed a day because Carmack -- who stood to make $100 million in the deal -- was concerned he might be sued by ZeniMax over his work for the company on virtual reality. The judge overseeing the trial has ruled that an indemnity agreement protecting Carmack would not be allowed into evidence because it might prejudice the jury.

Zuckerberg responded that he didn’t know the details of Carmack’s concerns. He said the day-long delay came as a result of indecision at Facebook.

“We were having a lot of conversations internally on our side whether this was the right thing to go forward and do,” Zuckerberg testified. “Everyone will admit $2 billion is a lot of investment.”

Sammi told the jury in his opening argument last week that ZeniMax put Facebook on notice that it was “buying stolen goods” and displayed a photo of Zuckerberg in front of a screen depicting Facebook’s old motto, “Move Fast And Break Things.”

But Zuckerberg said Tuesday he never heard of ZeniMax before it sued Oculus in May 2014. He said it is common for companies to “come out of the woodwork” and make claims following an acquisition.

The case is ZeniMax Media Inc. v. Oculus VR Inc., 3:14-cv-01849, U.S. District Court, Northern District of Texas (Dallas).

— With assistance by Sarah Frier

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