Oculus VR And Palmer Luckey Sued For Alleged Violation Of Confidentiality Agreement

by Mike Futter on May 22, 2015 at 11:42 AM

Oculus and Palmer Luckey find themselves on the defending end of another lawsuit today. This time, the company and its founder are alleged to be in breach of contract and “wrongful exploitation” of intellectual property owned by one of Luckey’s former employers.

Total Recall Technologies, a company based in Hawaii, filed the suit today in California. The plaintiff alleges that Luckey agreed to confidentiality, signing an agreement on August 1, 2011. The complaint also alleges that Luckey was paid to build a prototype and agreed that it would belong exclusively to Total Recall.

The plaintiff goes so far as to allege that Luckey’s design is not his own. The company says that it was built using information and feedback from Thomas Seidl, one of the two partners in Total Recall Technologies. Total Recall also says that the 2012 Oculus VR Kickstarter was run while Luckey was under the terms of an agreement signed with the company. 

Total Recall is seeking damages (compensatory, exemplary, and punitive), interest, and injunctive relief. We reached out to Oculus, but the company is unavailable for comment at this time.

Oculus recently announced plans for its consumer unit. The company expects to take pre-orders this fall and ship in early 2016.

In 2014, Bethesda parent Zenimax sued Oculus over misappropriation of its intellectual property. That case is ongoing.

[Source: United States District Court, Northern District of California via Engadget]


Our Take
These are hefty allegations of theft and fraud. If Total Recall can produce the agreement and a court finds it to be legitimate, Oculus may find itself in a difficult situation. However, without comment from the company or seeing the evidence, it is far too early to know what the merits are. Given the lag between breach and suit, I’m curious what took so long.