Testy Arguments in $2 Billion Virtual Reality Case

DALLAS (CN) – The young founder of Facebook’s virtual reality subsidiary denied in federal court Wednesday that he violated a nondisclosure agreement at the heart of a $2 billion lawsuit over the creation of the Oculus Rift headset.

Palmer Luckey, 24, endured a combative direct examination by ZeniMax attorney Phillip Philbin, before U.S. District Judge Ed Kinkeade.

The men talked over each other several times as Philbin read aloud sections of the 2014 agreement and related email messages, as a flustered Luckey complained about hearing excerpts instead of the broader conversation within several messages.

“I want to make sure I am accurately describing the content of my replies so they are not taken as something they do not mean,” Luckey told Philbin, of the Haynes Boone law office.

ZeniMax Media, of Rockville, Md., and its subsidiary id Software, of Richardson, Texas, sued Oculus and Luckey in May 2014, two months after Facebook bought Oculus for more than $2 billion. They seek $2 billion for breach of contract, copyright infringement and unfair competition.

ZeniMax claims id co-founder John Carmack and other employees added physical hardware components and specialized software to Rift and that Luckey never obtained a license to use ZeniMax’s intellectual property. Rift appeared on store shelves in March 2016 for $599.

Carmack is best known as lead programmer of id’s hit first-person shooter games Wolfenstein 3D, Doom and Quake. In 2013, he became chief technology officer at Oculus.

Oculus attorneys told the court Wednesday that the software at issue had entered public knowledge, and so was not subject to the agreement.

Luckey testified that when he demonstrated his headset to investors in 2014, he executed the plaintiffs’ code through the headset but did not take the source code itself.

Facebook’s purchase made Luckey wealthy overnight. Forbes estimates his net worth is $730 million.

Luckey, who was home-schooled, created his first virtual reality headset, the PR1, in his parents’ Southern California garage when he was 17.

Philbin went after Luckey’s lack of a college degree, asking if he had a law or engineering degree.

“You don’t have a degree at all?” Philbin asked.

“No,” Luckey replied.

On cross examination, Oculus’ attorneys defended their client’s technical ability by asking about his early interest in electronics as a child. Luckey said his subscription to hobby magazine Nuts and Volts got him interested in virtual reality he created the PR1.

On Monday, Facebook CEO Mark Zuckerberg testified that he had no knowledge of whether Luckey had signed a nondisclosure agreement before Facebook bought Oculus.

Zuckerberg revealed that the final purchase price was $3 billion, as additional payments were made to keep key employees and pay performance bonuses.

Several tech billionaires never got a college degree, including Apple co-founder Steve Jobs, Microsoft founder Bill Gates and Zuckerberg.

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