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When a virtual reality tech developer leaves, the real world intercedes. Zenimax, owned by programming guru John Carmack, worked with Palmer Luckey to improve his Oculus Rift virtual reality gaming device. Zenimax allowed Luckey access to its proprietary technology. Luckey signed a Non-Disclosure Agreement (NDA). Facebook bought Luckey’s company. Right after the sale, a group of Zenimax employees left to work with Luckey. Zenimax sued Luckey and his company seeking $4 billion for trade secret misappropriation, copyright infringement and trademark infringement. And, oh yes, breach of the NDA. After trial, the jury rejected all but the breach of the NDA claim and awarded $500 million to Zenimax.
WHY YOU SHOULD KNOW THIS. The problems with protecting emerging technology may have played out in this case. Sometimes, the technology can’t be pigeonholed in a specific type of Intellectual Property. Zenimax didn’t take that risk and required a NDA. As Zenimax learned, the best time to anticipate protection is at the inception of the relationship. In other words, always have a written agreement with strong contractual provisions providing protection against the unauthorized sharing of information.