Jury Hands Victory to Facebook and Oculus VR Founder in Rift Ownership Trial

According to a special verdict form issued by a San Francisco, California jury on Wednesday, Palmer Luckey and Facebook Technologies LLC (FBT), the entity which purchased virtual reality headset company Oculus in 2014, did not commit contractual breaches in connection with the Rift VR headset. The resolution comes after a six day trial and more than five years of litigation, including an appeal to the Ninth Circuit.

The case concerns accusations by Total Recall Technologies LLC (TRT), a Hawaiian partnership, that Luckey breached a contract to create VR headsets for TRT by failing to deliver the Rift after delivering two other prototypes. The lawsuit further claimed that FBT helped Luckey cover up the breach and asserted a corresponding claim for constructive fraud.  

Luckey and FBT defended on numerous grounds, including that there was never an exclusive agreement between Luckey and TRT requiring that he deliver every VR headset prototype he made. The defendants also claimed that the Rift was materially different from the other two headsets delivered and was for the purpose of gaming rather than for use with a three-dimensional camera as TRT had requested.

Last week, the defendants moved for judgment as a matter of law contending that TRT failed to prove each of the requisite elements of its asserted claims. TRT opposed, but the jury decided the case before the court ruled on the motion.

At the conclusion of trial, the civil jury answered the verdict form’s four questions all in the negative, including whether Luckey breached his agreement with TRT and whether the breach was “a substantial and foreseeable factor in causing TRT’s harm.” The jurors also found that the plaintiff failed to prove his affirmative defense, that his consent to contract with TRT was obtained by fraud.

Palmer Luckey and FBT are represented by Mayer Brown LLP and Cooley LLP. Luckey is additionally represented by Durie Tangri LLP. TRT is represented by  Quinn Emanuel Urquhart & Sullivan LLP.