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Speaker 1: Facebook wants a federal judge to let it continue sales

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Speaker 1: of its virtual reality headsets, even though a jury just

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Speaker 1: noted in February that Facebook's Oculus units stole another company's

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Speaker 1: computer code and awarded damages of five million dollars to

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Speaker 1: that company, ZeniMax Media. Joining us is Tom Corrisek, a

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Speaker 1: legal reporter for Bloomberg News in our Dallas bureau. Tom

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Speaker 1: tell us what the jury found before awarding that huge verdict, Well,

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Speaker 1: the jury was essentially asked to take a look at

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Speaker 1: a trade secret case, but it had a lot of

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Speaker 1: other allegations in that there was a non disclosure agreement

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Speaker 1: that was not followed early on in Oculus is history,

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Speaker 1: that there was copyright violations, and that there were use

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Speaker 1: of trademarks in a way that Oculus used the ZeniMax

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Speaker 1: trademarks in a way to promote their business early on,

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Speaker 1: and and the jury awarded damages on all those issues

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Speaker 1: even though they didn't go to the trade secrets issue.

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Speaker 1: So now Xenomax has requested a court order blocking sales

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Speaker 1: of certain models of the Oculus RiPP What's Facebook's argument

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Speaker 1: against that. Facebook has argued that both the verdict and

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Speaker 1: the damages should be thrown out to start with their

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Speaker 1: backing up much further. There are arguments about the the injunction,

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Speaker 1: the salesman. They start with kind of a premise that

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Speaker 1: Xenomax is not a competitor directly with Oculus, and under

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Speaker 1: existing case law and precedent, you really have to be

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Speaker 1: found to be a direct competitor to go to that

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Speaker 1: drastic solution. So so it's it would be very difficult

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Speaker 1: or almost impossible to get the product pulled from the market.

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Speaker 1: My understanding is it's a very high bar that there

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Speaker 1: have been cases in the past, and and and there's

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Speaker 1: so many hoops have to be jumped through that this

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Speaker 1: is kind of a drastic remedy that Cinemax might be

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Speaker 1: reaching pretty far on this. What's oculus is argument to

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Speaker 1: set aside the February verdict for instance. You know, there's

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Speaker 1: there's all these various aspects of it. But like I'm

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Speaker 1: the copyright claim. The the jury found that Oculus would

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Speaker 1: use some copyrighted code that was developed by Xenomax early

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Speaker 1: on to get this headset activated. There's a lot of

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Speaker 1: software behind this hardware. So their attorney argued in court

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Speaker 1: yesterday this is William Dawson. He algue that they had

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Speaker 1: proved that there were seven lines of code that were

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Speaker 1: at issue with with the copyright claim out of a

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Speaker 1: potential forty forty two billion lines that are included in

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Speaker 1: this these products. So are you saying that's so inconsequential

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Speaker 1: that the jury that the judge would have the discretion

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Speaker 1: to throw out the the award and the finding. So um,

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Speaker 1: how important is this business to this virtual reality headsets?

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Speaker 1: How important is it to Facebook? Well, I'm a legal

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Speaker 1: reporter in Dallas. Facebook regularly, but we've had I've had

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Speaker 1: input from other reporters of Bloomberg and they're telling me

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Speaker 1: that Facebook has seen this is a very integral part

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Speaker 1: of its future, and this is certainly a very important

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Speaker 1: part of its business. So when you listen to the

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Speaker 1: to the hearing, were you leaning one way or the

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Speaker 1: other or did the judge seem to be asking questions

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Speaker 1: that showed him leaning one way or the other? I

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Speaker 1: think the judge is leaning towards trying push these people

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Speaker 1: to settle this thing. Uh. He warned them that he's

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Speaker 1: not a quote unquote split the baby kind to judge

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Speaker 1: that if they go all the way to a decision

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Speaker 1: by him, they'll be uh distinct winner and loser. I

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Speaker 1: think he's trying to push them a little further to

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Speaker 1: the negotiating table. The the case as far as head

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Speaker 1: no uh no movement towards that. It's it's been really

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Speaker 1: hard fought on both on both sides and um the

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Speaker 1: and this was happened before Facebook bought the Oculus unit

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Speaker 1: correct correct for for instance, the reason why there's a

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Speaker 1: predic hit for them even asking for the sales bank

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Speaker 1: goes all the way back to a non disclosure agreement

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Speaker 1: that Palmer Lucky singularly as Oculus just himself a one

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Speaker 1: man company, had he had signed this nondisclosure agreement with Xenomax,

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Speaker 1: which at the time was you know, to him was

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Speaker 1: it was, you know, one of a large company out

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Speaker 1: there that he was trying trying to sell his headset

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Speaker 1: to his his his kind of prototype early pype. We

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Speaker 1: have to leave it there. We're gonna have to leave

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Speaker 1: it there, Tom, but we'll get back to you to

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Speaker 1: find out what happens in the case. That's Tom Corusk,

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Speaker 1: legal reporter for Bloomberg News.