Facebook's VR Future Under Threat From Possible Court Order

By William Vogeler, Esq. on March 08, 2017 | Last updated on March 21, 2019

It's hard to read the future in tea leaves, especially if you don't believe in them -- except for an occasional sip of herbal tea.

So predicting the future of Facebook's legal battle over its virtual reality headset is, well, certainly not our cup of Nostradamus. We're just lawyers, not soothsayers. Like that's going to stop us ...

Anyway, Facebook is going to settle or lose. We can say that with some confidence because a jury already decided that Facebook infringed on a copyright for the VR technology in the case.

Going for the Jugular

ZeniMax won a $500 million verdict lat month, and now it is going for the jugular. The company has asked the judge to enjoin Facebook from using the technology in its headset.

Edward Naughton, a Boston-based copyright lawyer, said ZeniMax has a strong argument because its technology continues to be used without its permission and the jury's verdict does not compensate for that.

"I think they have a pretty good shot here," Naughton said.

Mitchell Shelowitz, a copyright lawyer in New York, said the nondisclosure agreement provided that ZeniMax was entitled to an injunction in the event its terms were violated. The jury found that it was violated.

Turn the Other Leaf

Of course, as tea leaves and lawyers go, there is another real possiblity. Facebook could pay ZeniMax to settle the case. ZeniMax wanted $2 billion, but the jury awarded $500 million.

That's a mere flesh wound for a $350 billion company, which could pay the $1.5 billion difference and still see its stock value increase. Then again, the company may decide to litigate the competition to death rather than settle.

"Facebook has deep pockets," Naughton said. "That allows them to put their opponent into litigation fatigue."

But Nostradamus here says no, the parties will likely settle because this is literally about the future. Technology insiders say virtual reality and augmented reality industry will be a $162 billion industry in three years.

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