Facebook suffers at the hands of its subsidiary

Facebook's subsidiary, Oculus, which specialises in creating software and hardware for virtual reality has been ordered to pay $500 million in damages to game developer ZeniMax Media over copyright infringement and the violation of a non-disclosure agreement. The decision comes as a setback to Facebook which acquired Oculus in 2014 for $2 billion in the hopes of expanding their footing in the virtual reality market over the next 10 years.

ZeniMax argued that Oculus had copied their early innovations when building the Occulus Rift, a headset which allows users to experience virtual reality.  The Dallas jury found that Oculus had used computer code belonging to ZeniMax in creating the Occulus Rift and also that Palmer Lucky, the co-founder of Oculus, had breached a non-disclosure agreement with ZeniMax.

However, an Occulus spokesperson was keen to point out that the case was focused solely upon the accusation that Occulus had stolen trade secrets belonging to ZeniMax and that on this point the jury ruled in favour of Occulus. The firm also made clear that they would be seeking to appeal the decision and reaffirmed their commitment to developing virtual reality technology.

It is unclear how Facebook will react to the jury's decision given that they are not liable to pay the full $500 million as the damages were divided amongst multiple parties in different amounts. Oculus will have to pay $200 million for the non-disclosure violation and $50 million for copyright infringement.  Whilst both Oculus and Lucky are responsible for $50 million for misrepresenting the origin of a product and former CEO and co-founder of Occulus Brendan Iribe must pay $150 million.