Mark Zuckerberg Goes on the Record in Lawsuit

DALLAS (CN) — Facebook CEO Mark Zuckerberg on Tuesday testified in a courtroom for the first time ever, defending his company’s virtual reality subsidiary Oculus VR against claims its headset technology was stolen from a Dallas-area software developer.

Ditching his usual gray T-shirt and blue jeans, Zuckerberg wore a dark suit and tie as he testified for more than five hours before U.S. District Judge Ed Kinkeade.

“We are highly confident that Oculus products are built on Oculus technology,” the nation’s fourth-wealthiest man testified. Fortune estimates his net worth as $55.5 billion.

“The idea that Oculus products are based on someone else’s technology is wrong,” Zuckerberg said.

Video game publisher ZeniMax Media, of Rockville, Md., and its subsidiary ID Software, of Richardson, Texas, sued Oculus and its founder Palmer Luckey in May 2014, two months after Facebook bought Oculus for more than $2 billion.

ZeniMax claims Oculus and Luckey violated a nondisclosure agreement, infringed on copyrights and competed unfairly.

“Defendants now stand to realize billions of dollars in value from ZeniMax’s intellectual property,” the May 21, 2014 complaint states. “Defendants never obtained a license for the use of ZeniMax’s property, nor any right to sell or transfer it to third parties.”

ZeniMax claims ID Software co-founder John Carmack and other employees shared improvements to Oculus’ Rift headset “by adding physical hardware components and developing specialized software.”

Rift appeared on store shelves in March 2014, retailing 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.

Zuckerberg said he had never heard of ZeniMax before the lawsuit, and that after large acquisitions are announced, “all kinds of people come out of the woodwork to claim they own” intellectual property or other rights.

“I am aware of the claims,” he testified. “I am here because I believe they are false and I believe it is important to testify to that.”

Zuckerberg downplayed questions from ZeniMax attorney Tony Sammi, with Skadden Arps in New York, during a testy direct examination, in which Sammi said that Facebook’s due diligence for the purchase was rushed during a single weekend.

Zuckerberg said “we were not certain” about the deal until the end, and that $2 billion “is a lot of money” that caused a “big and contentious discussion” within Facebook.

He noted that Oculus was far smaller, with fewer employees in 2014, than WhatsApp and Instagram, two other companies Facebook has purchased.

Zuckerberg said he had no knowledge of whether Luckey had signed a nondisclosure agreement with ZeniMax. He denied that Carmack or any alleged concerns about being sued held up the deal.

“If you steal my bike, paint it and put a bell on it, does that make it your bike?” Zenni asked.

“No,” Zuckerberg replied.

Zuckerberg revealed that the final purchase price for Oculus was $3 billion, as additional payments were made to keep key employees and for performance bonuses. He said Oculus’ owners were originally reluctant to sell, having valued the company at $4 billion. He said they changed their minds when they became convinced the deal “would be really good for virtual reality and not just a good deal” for them.

Oculus said in a statement Tuesday that it is “eager to present our case in court.”

“Oculus and its founders have invested a wealth of time and money in VR because we believe it can fundamentally transform the way people interact and communicate,” the company said. “We’re disappointed that another company is using wasteful litigation to attempt to take credit for technology that it did not have the vision, expertise, or patience to build.”

%d bloggers like this: