By Dylan Walko
Technology & Innovation Writer
For being a 32-year-old man, Mark Zuckerberg has seen the inside of a courtroom quite a few times. This past week, the Chairman and CEO of Facebook met in a Dallas courthouse on Tuesday to defend Facebook’s second largest acquisition since its inception, Oculus Rift.
Oculus Rift is virtual reality headset that was developed and manufactured by Oculus VR, now a division of Facebook. Mr. Zuckerberg acquired Oculus in 2014 at a cost of $2 billion. Oculus had originally been the brainchild of Palmer Luckey, a 24-year-old “sci-fi geek” who attended California State University in Long Beach. The main issues here stem from John Carmack, CTO of Oculus, whom was a former employee of ZeniMax, which is the company-bringing suit against Oculus.
The accusations ZeniMax has brought to court revolve around Mr. Carmack’s collaborative involvement with both Id Software (parent of ZeniMax) and Oculus. ZeniMax had stated that Mr. Luckey and Mr. Carmack had tweaked the software that operates the Oculus while Mr. Carmack was still under contract at Id and then destroyed evidence of the collaboration, according to The Guardian. Along with this, Mr. Luckey is being accused of “using Zenimax games to promote the Rift during its Kickstarter campaign without permission.”
Mr. Zuckerberg also had to answer a series of questions from the ZeniMax laywer, who stated that Facebook rushed through the review process of Oculus and overlooked its property disputes with ZeniMax. In response to these accusations, Mr. Zuckerberg stated that Facebook looks over M&A deals for weeks, months or even years prior to any financial commitment. However, in an industry where Facebook is dealing with the likes of the GAFA corporations (Google, Apple, Facebook and Amazon) which it is in direct competition with they have to execute deals quickly before competition drives acquisition prices up.
Mr. Zuckerberg stated that he appeared in court because he is highly confident that Oculus products are built on Oculus technology and that the idea that they stole someone else’s intellectual property is just wrong, according to the New York Times. The original lawsuit for this case had been filed more than two and a half years ago after the acquisition. The true worth of this case is the fact that it actually made it to a jury trial. In today’s judicial system, there are new lawsuits consistently being filed for prominent technology platforms, but few to none make it to a courtroom with a trial. Most of these discrepancies are settled outside the courtroom.
Facebook took a significant gamble with this $2 billion venture, as Zuckerberg attempts to find new avenues to overcome the likes of Apple and Google; VR is not a short-term profitable asset. Various VR devices are still buzzing around the tech industry, but at the same time consumer spending on these devices are not enough yet, due to high prices and limited content availability.
Yet, Mr. Zuckerberg declared also that he would not be slowing down these investments anytime soon. The New York Times reported him saying to his lawyer “these things end up being more complex than you think up front, if anything, we may have to invest even more money to get to the goals we had than we had thought up front.” By putting in more than $3 billion of cash flow within the next decade, Facebook may be able to deliver a quality virtual reality experience to millions of people around the world.
Zenimax may not have nearly the same financial status as Facebook but they do have a significant cast of board of directors along with a cult following from games such as Fallout and Elder Scrolls. Yet, in what seems to be in the fashion of Mr. Zuckerberg he explained that, “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 claim that they just own some portion of the deal.” topping it off with a punch to the gut of ZeniMax stating “Like most people in the court, I’ve never even heard of ZeniMax before.” According to CNBC.
A version of this article appeared in the Tuesday, January 24th print edition.
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