Facebook loses $500m Oculus virtual reality case as profits double
Facebook’s VR subsidiary is told to pay up as a court backs a rival firm in the copyright and patent lawsuit.
Facebook and two founders of its Oculus virtual reality technology have been ordered to pay $500m after losing a lawsuit.
A jury in Dallas found in favour of video game maker ZeniMax Media, which had claimed the VR system was stolen.
Oculus, which was bought by Facebook two years ago for $2bn, will have to pay $300m in damages.
The lawsuit claimed the Oculus Rift headset was developed using code taken from ZeniMax’s sofware.
The claim that trade secrets had been stolen was dismissed by the jury, but Oculus was found liable for copyright infringement and other violations.
As part of that judgment, Palmer Luckey and Brendan Iribe, co-founders of the Oculus system, will have to contribute a further $50m and $150m respectively to ZeniMax Media, whose board includes President Donald Trump’s younger brother Robert.
Oculus said it planned to appeal against the ruling.
The judgment was made just moments before its parent firm revealed its latest financial results.
Facebook’s profits more than doubled to $3.56bn (£2.8bn) in its fourth quarter after further strong growth in its mobile advertising business, which now accounts for 84% of its total ad revenue.
That was despite a previous warning from Facebook last year that ad growth would probably slow “meaningfully” due to limits on ad load – the total number Facebook can show to each user.
Its share price – up 16% this year – rose more than 2% in after-hours trading.
Chief executive Mark Zuckerberg told analysts the company expects a major ramp-up in hiring and other spending during 2017 as it invests in video and other priorities.
Mr Zuckerberg said the focus would be on generating short-form, original videos, especially professionally created “episodic content” produced week-to-week.