Tag: Business Tips

A Texas jury awarded game development firm ZeniMax, $500 million in a lawsuit filed just months after Facebook purchased Oculus in 2014.

As I understand the facts, ZeniMax claimed, among other things, that Oculus founder Palmer Luckey and CTO John Carmack violated a non-disclosure agreement (NDA), stole trade secrets and/or misappropriated intellectual property. While the Dallas-based jury found that Luckey violated the non-disclosure agreement, it also found that Oculus did not steal certain trade secrets or misappropriate intellectual property.

It’s reported that Oculus was ordered to pay $200 million for violation of the non-disclosure agreement and $50 for copyright infringement. Furthermore, Luckey and Oculus were each found responsible for $50 million for misrepresentation. Another $150 million was ordered to be paid by CEO Brendan Iribe of Facebook’s PC VR division. Facebook’s liability would stem, absent an agreement, from Oculus’ liability. A good overview of the primary claims and causes of action can be found here

What’s Happens Next

I don’t care how Facebook tries to spin this, the outcome of this trial is bad for the defendants. I’m confident they will file post-trial motions to reduce the verdict or have it tossed out altogether. The defendants’ will also bring a motion for a new trial.

Depending on any procedural, evidentiary, or legal issues that may have happened during the trial, the trial judge will grant, grant in part, or deny one or more of these motions. When all said and done, I expect the defendants to eventually appeal any unfavorable post-trial motions.

In civil cases, I’ve found that because of the strong presumption in favor of respecting a trial court’s jury verdict, a majority of judgments are not overturned on appeal. Because of this, I see the case eventually be resolved via a post-trial settlement or payment of the final judgment with interest.

My Take-A-Way

I believe a strong message was delivered by this verdict. Entrepreneurs need to appreciate and understand how important NDA and intellectual property rights are. While Facebook has the resources to easily handle this type of financial hit (its shares were up 3 percent in after-hours trading), most business do not.

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9 Legal and Entrepreneurial Tips To Help You Start and Build Your Online Business

Doing business online involves much more than offering a great product or service that benefits others. Running a successful business also includes concepts like maximizing profits and minimizing expenses and liabilities.

Two good ways you can do just that are to do business as a corporation or a limited liability company. Doing so may help you:

Reduce Personal Liability — these entities can shield you from liability for business debt or lawsuits against your business. They can also protect personal assets such as your home, cars, and savings.

Reduce Taxes — these entities allow you to deduct expenses that a sole-proprietorship or partnership many not allow you to do. This includes healthcare, entertainment and travel expenses.

Maximize Retirement and Pension Plans– these plans can be grown more effectively and maximized faster using these entities. Additional tax benefits are also available.

Add Credibility to Your Business– these entities show that you’re serious about your business which is now registered in your state. Factors like credibility, prestige and permanence are all byproducts of doing business as an entity.

Raise Money and Build Credit– these entities allow you more options to raise money through the sale of stock or transfer ownership via the transfer or sale of stock. You’ll also be able to establish and build a new credit profile distinct from your personal situation.

Manage Your Company– these entities allow you to use agreements that define how you will run your company and resolve disputes. Laws also control what you and other people involved in your business can and should do to run the business each day. This protects everyone involved.

Note- all 50 States now recognize the single person LLC which is taxed the same as a sole-proprietorship (no double taxation) but still retains the liability protection and permanence of a separate entity. In California, this is one of my favorite solutions for small business owners. Please check with a lawyer in your state for help or if you have questions. Thanks!

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Mitch Jackson is the founder and Senior Partner of Jackson & Wilson, Inc., and an award winning 2009 Orange County Trial Lawyer of the Year and 2013 California Litigation Lawyer of the Year. He enjoys applying his 35 years of practicing law to add value to consumers and clients who are doing the digital dance at the intersection of law, business and technology. Mitch is also the co-founder of ManeuVR, a Metaverse and Web3 consulting agency.