January/February 2017
“SEND A MESSAGE,” ANTHONY SAMMI IMPLORED THE JURY, WRAPPING UP HIS closing argument. “It’s not right. Facebook is a $350 billion company. It is an elephant in the room. It is a 900-pound gorilla. It doesn’t care. Make it care. You can’t do this. There is right and there is wrong. Please make it right.”
Judge Kinkeade nodded to Sammi and then turned to the jury. “Ladies and gentlemen,” he began, “you are the sole and exclusive judges of the facts. You should determine these facts without any bias, prejudice, sympathy, fear, or favor, and this determination should be made from a fair consideration of all the evidence that you have seen and heard in this trial.”
Over the next few days, Judge Kinkeade instructed, the jury would need to reach a unanimous decision on fifty-eight different questions. Questions like:
If the jury answered yes to any of the questions like these, then it would be up to them to come up with a monetary amount to compensate ZeniMax for the damages.
“Y’all have already worked awful hard,” Judge Kinkeade finished by saying, before sending the jurors off to deliberate. “I know you’re tired. I can look at you and tell. Your eyes are all red and everything, kind of like mine. But . . . be prepared to come back Monday and work hard. I’ll be back then rested and ready, and so will you. I will see you back then.”
“I SHOULD BE BACK NEXT WEEK!” LUCKEY EXCITEDLY SAID, SPEAKING WITH Edelmann from back in his hotel room. “Depends on how long the jury takes, obviously. But the point is I’ll be back soon. It’ll be good to get back to normal.”
Edelmann couldn’t tell if by “normal,” Luckey meant like how things were before the trial or if they were going to finally let him go back to work. But at the moment, he sounded exhausted, so she didn’t want to press the issue. Besides, she was dying to get some details about how things had gone in Dallas. “If you’re allowed to talk about it,” she said. “Or is it still, you know, supersecret and whatever?”
“I can speak about most things now,” Luckey told Edelmann. “We rested our case. It’s in deliberations now, so I should be in the clear. And let’s see . . . where should I begin? Well, first of all, the judge is awesome. He’s a very strong-willed judge. He’s a Texan. He’s a really cool guy. He tells lots of fun stories and anecdotes the whole time. I want to hang out with him with all this is said and done.”
“That’s amazing!”
“And he does something called ‘sidebar discussion.’ Basically the side of his desk is the sidebar and—most judges don’t do this, they’re very hands off when it comes to the attorneys—but almost every day he would invite our lead counsel and their lead counsel up to the sidebar for twenty or thirty minutes to talk with him about everything going on. And he’s just brutally honest with them. Oh! And one time . . . so the attorney for ZeniMax is this guy Tony Sammi, and he’d sometimes snap his fingers at us when we were testifying and so during one of the sidebar discussions, the judge told him: “You know how many people have snapped their fingers at a witness in my court, Mr. Sammi? None! It’s never happened. If you do it again, I’m going to shoot your hand off.”
Edelmann cracked up.
“And then he did it again!”
“No way. What did the judge do?”
“He got superpissed.”
Edelmann continued laughing.
“Oh! You’re gonna love this,” Luckey said, moving on to the sitcom-worthy performance of ZeniMax’s damages expert. “the things he said, they’re just laughable and unbelievable. I mean, the way came up with the value is so absurd. Like one way, he literally just split the acquisition price into four equal parts. He basically goes”—Luckey then used an over-the-top dopey voice to try and recapture the moment, “Well, Palmer Luckey said in his Kickstarter video that there are three things that make the Rift unique: low-latency head tracking, wide field of view, and an immersive stereoscopic 3-D display. And we made the software. And we did the head tracking and put a strap on the prototype Palmer Luckey sent so . . . $1.5 billion, please.”
“No way.”
After recalling some of the greatest hits, Edelmann asked Luckey if he thought that they would win.
“You never know how juries are going to react,” Luckey said. “Because they don’t have all the background, you know? And a lot of this stuff is supertechnical. So they probably can’t always tell if the outrage is righteous or not. So it’s really hard to predict a jury verdict, but I think we’re gonna come out ahead. I think we’re going to win.”
Luckey’s optimism, however, would soon be dampened by a phone call from Mitchell.
“Bad news,” Mitchell said. “I’m calling to let you know that we’re restructuring and you’re not going to have an executive assistant anymore.”
“Um, okay,” Luckey replied, his chest suddenly feeling heavy. “Are you still going to have an assistant?”
“Yeah.”
Heavier, heavier.
“. . . but I’m gonna have to share with somebody,” Mitchell clarified.
“Wait,” Luckey said. “What other people aren’t going to have assistants that had an assistant before?”
“Uhhhh, I don’t know.”
That’s bullshit, Luckey thought. But whatever. As long as I’m not being fi—
“Also,” Mitchell continued, “I’ve got some more bad news: you’re going to have to clean out your office.”
“What?!” Luckey scoffed, so abruptly angry that the heaviness was now gone. “What the fuck, Nate?”
“It wasn’t my decision! They told me they need more meeting rooms and they need to turn your office into a meeting room.”
“That doesn’t make any sense,” Luckey replied. “When we were acquired, one of the only things that I asked for was that I be able to keep my office. It’s part of my deal, Nate, that I get to have an office.”
“Well, I don’t know anything about that,” Mitchell said. “You’d have to talk to Brendan about that.”
“Nate . . .” Luckey began, trying to convince himself the timing was just a coincidence—that this would happen within hours of Facebook resting their case . . .
“I’m really sorry about all this.”
“Nate,” Luckey tried again. “Can you just tell me . . . am I about to get fucked?”
“No! Oh man, I’m sorry if I gave you that impression. It’s all just restructuring stuff.”
DAYS LATER, ON FEBRUARY 1, JUDGE KINKEADE ASKED THE JURY IF THEY HAD reached a verdict.
“Yes, Your Honor,” the jury foreperson replied.
“All right. I’m going to go directly to the questions,” Judge Kinkeade said, referring to the fifty-eight questions the jury had been tasked with answering. Did ZeniMax prove, by a preponderance of the evidence, that any Defendant misappropriated the trade secrets claimed by ZeniMax and id Software? “[reading] Answer ‘yes’ or ‘no’ for each Defendant.”
The answer, the jury found, was no. They did not believe that Oculus, Facebook, Luckey, Iribe, or Carmack were guilty of misappropriating trade secrets. This was huge. This was the big one. As expected there was quiet but palpable sense of relief from Luckey, Iribe, and Carmack.
“So we jump over to Question Number 7,” Judge Kinkeade continued. “Did any of the following Defendants directly infringe upon any of ZeniMax or id Software’s copyrights?”
Yes, the jury found. And did any of the named Defendants vicariously infringe upon any of ZeniMax or id Software’s copyrights?
“Yes,” Judge Kinkeade announced. Palmer Luckey and Brendan Iribe were both guilty of this, the jury believed. And, they believed, the amount of damages that ZeniMax and id Software suffered as a result of this infringement was $50 million.
Indignant, incredulous, Luckey’s mind filled with fury. But that would just be the tip of the iceberg.
“Did Palmer Luckey fail to comply with the nondisclosure agreement?”
The answer to this, the jury found, was yes. And what sum of money, if paid now in cash, would fairly and reasonably compensate ZeniMax and id Software for that? $200 million.
Notably, the jury believed that due to ZeniMax’s lengthy delay in filing charges, Luckey himself was not personally liable. He was absolved by the “doctrine of laches.” Nevertheless, Oculus as a whole was still deemed liable, which meant that by midway through the questions, ZeniMax had already been awarded $250 million.
Ultimately, ZeniMax would be awarded a total of $500 million, with the additional sum coming from charges related to “false designation.” This charge—of false allegation—had been previously defined by Judge Kinkeade to mean “any person who makes commercial use of any word, term, name, or symbol, or combination thereof that is likely to cause confusion as to that person’s affiliation, connection, or association with another person, or that misrepresents in advertising the nature, characteristics, quality, or geographic origin of that person’s goods or services.” The jury believed that Oculus, Luckey, and Iribe were guilty of misrepresentation (liable for $50 million, $50 million, and $150 million, respectively).
To those on Oculus’s side of the aisle, these figures were baseless and outrageous. “Particularly,” Ms. Wilkinson explained, “Plaintiffs did not present any damages evidence for either of those claims.” Even Carmack, who himself was not found liable for any damages, was appalled by the verdict, ZeniMax’s tactics, and their allegations of “non-literal copying.” Needless to say, all the defendants—Oculus and Facebook; Luckey, Iribe, and Carmack—left Dallas with severe misgivings.
Ultimately, Facebook would succeed in appealing the damages. On June 27, 2018—nearly eighteen months after the jury verdict—Judge Kinkeade would reduce the damages by half, to $250 million total, specifically eliminating the damages that went directly against Brendan Iribe and Palmer Luckey. In response to the 2018 ruling, Facebook vice president and deputy general counsel Paul Grewal would say, “a positive step toward a fair resolution, and we will be appealing the remaining claims.”1