United States: Theft Of Your Intellectual Property Costs Time And Money

Theft of your Intellectual Property costs more than just Time and Money, it costs you the Credit for your Unique Idea.

ZeniMax, parent company of ID Software creators of Doom and Quake games, have a partial win in their case against Oculus rift, Facebook's virtual reality acquisition.  A court in the US has ordered Facebook to pay $500m to ZeniMax for the breach a non-disclosure agreement (NDA) in relation to the development of the iconic Oculus rift headset and mis-using trademarks.  However, the social media giant escaped a verdict of theft of ZeniMax's trade secrets, as the court found Facebook/Oculus rift innocent of that allegation.  The Texas court ordered that the present CEO of Oculus, Palmer Luckey must pay $50 million of the award for false designation, whilst the former CEO Brendan Iribe must pay $150 million for the same thing.  Oculus must also pay $200 million for failing to comply with the NDA and further $50 million for copyright infringement with another $50 million for false designation. 

The American video game company's award is somewhat short of its original claim for $2 billion and they still have a fight on their hands as Facebook intends to appeal.

The case hinged on whether co-founder of ID Software John McCarmack, who is now Chief Technology Officer at Oculus rift and Palmer Luckey, CEO of Oculus rift failed to observe the NDA, which was in place to protect the innovations created by ID Software with regard to virtual reality technology. 

Facebook is unlikely to have too much trouble in paying such a sum as the announcement of a 51% jump in revenue in their fourth quarter driven by mobile advertising, leading to a more than doubled profit of $3.57 billion puts them in an enviable position.

Businesses must take every step to protect their unique ideas in order to capitalise on their research and investment rather than allowing the benefits to slip away to others.  Whilst ID Software are pleased to have been vindicated it is unlikely that the award granted by the court comes anywhere near the amount that their pioneering ideas actually generated, both in terms of revenue and reputation. 

Giambrone's specialist lawyers can assist you in all aspects of intellectual property (IP) protection including strengthening employee agreements and contracts.  Aside from registering your innovations and taking all the legal steps to protect your IP from theft, there are other basic steps you can take to protect your ideas against employee theft:

  • Robust Employment Agreements make sure your employees sign and understand the implications of your employment agreement in relation to IP, particularly the senior executives. It should be crystal clear that all works will be assigned to the company.
  • Confidentiality and Trade Secret Agreements it goes without saying that the developing innovations of a business must be protected with solid agreements but also the strategies around the core innovation must be protected.
  • Access Controls limiting an employee's access and exposure to up and coming ideas, controlling their ability to gain access with password policies and other security policies will help to keep the company safe.  This can be far harder with senior executives but vigorous cyber security and regular scrutiny of all security measures will help.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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