Virtual-reality tech firms embroiled in contract dispute

On Behalf of | Jul 7, 2020 | Business Disputes |

Virtual-reality (VR) headsets are becoming more popular among Pennsylvania consumers as the technology becomes more affordable and obtainable. The 9th Circuit recently ruled a contract agreement did not stop a federal lawsuit to proceed over intellectual property used to power increasingly popular VR headsets.

Contract and litigation disputes involving emerging technologies often come down to intellectual property ownership and licensing rights or other use rights. The 9th Circuit in the Northern District of California in June ruled a partnership that owns tech firm Total Recall Technologies can sue a former tech developer whom they had hired to develop VR technology.

Total Recall in 2015 hired defendant Palmer Luckey, owner of co-defendant Oculus VR, to develop virtual reality technology now used in Total Recall’s VR headsets for gamers. After Luckey completed his contractual obligations, Total Recall says he used the same technology to create Oculus VR, which is considered a “pioneer” among virtual-reality tech firms. Total Recall says it owns the intellectual property rights to the technology Luckey used as the foundation to create Oculus VR and its competing VR headsets that are used by gamers and for VR training.

Luckey and Oculus VR argued the lawsuit against them is invalid because it was filed by one of two ownership partners on behalf of Total Recall VR. The Ninth Circuit ruled the contract and litigations dispute may continue because the partner who initially filed the lawsuit has the authority to file it on the corporation’s behalf and the other partner since has left.

The Ninth Circuit’s ruling shows the complicated nature of contract and litigation disputes and illustrates the value of an experienced law firm and attorney in Wilkes-Barre. Free consultations can help embattled entities to affirm their legal rights.