February 3, 2017—Many of you interested in the video game and media industry have undoubtedly heard that Oculus recently lost a jury trial to Zenimax which resulted in a $500 million jury verdict. However, what many (or at least some) of you don’t know is that a jury trial really is only a first step in the world of high stakes civil litigation. Here’s what’s going to happen next.
1. Additional fencing in the district court
While its not the same in every case, a jury verdict is usually recorded in something called the Court’s Charge to the Jury, or a Verdict Form. In this case, for example, the jury returned its verdict in a “Charge to the Jury” form which included a series of instructions from the Court about the law, and some questions which were then filled out by the jury. A copy of the 90 page form with the handwritten jury responses is here for those who are interested in seeing what it looks like. Now that the jury has returned the verdict, the parties will likely end up filing a variety of “post-trial motions” which will argue about things like whether the evidence presented at trial actually supports the jury’s verdict, and whether the court should have let in or excluded particular evidence over the course of the trial. Oculus may even claim it is entitled to a new trial. Not until after all of these issues are resolved will there be an actual judgment for the $500 million which Zenimax can try to collect on.
2. The likely appeal
Even after the district court enters its judgment, the parties will still have the right to appeal to the United States Court of Appeals for the Fifth Circuit. The arguments that will be made here will very likely be similar to arguments made in the post-trial phase before the district court (i.e. the evidence didn’t support the verdict, there were improper decisions made about which evidence the jury could see and hear, or the court instructed the jury improperly on the law). Depending on how the appellate court views the matter, possible outcomes include a new trial or an alteration to the damages amount. If the parties are unhappy with the Fifth Circuit’s decision, they can ask the United States Supreme Court to review it, although it would be very unlikely that the Supreme Court would take the case.
3. The post-trial posturing
Even after a trial, there are still likely to be discussions between the parties about how to resolve the matter without further litigation. Each party is also likely considering various legal and strategic options to improve its position in the marketplace. By way of example, Zenimax has stated it intends to seek an injunction which, in this case, would be a Court order prohibiting the sale of Oculus headsets. Zenimax could theoretically seek a “permanent” injunction, which would bar sale of the headsets for a substantial period of time, or it could at least seek an injunction pending the resolution of any appeals. Depending on Zenimax’s success with this motion, it could substantially damage Oculus’s business. This might lead Oculus to pay the $500 million judgment (and more) to get the matter resolved immediately. It might also damage Oculus to the point that it has no reasonable alternative but to sell its business to Zenimax. Interestingly, one of the defense arguments during the trial was that Zenimax brought the lawsuit because it was embarrassed about its prior decision to pass on an opportunity to acquire Oculus. With an injunction hanging over Oculus’s head, Zenimax could realistically get a second chance to acquire Oculus at a very reasonable price.
As we often say in the legal profession, litigation is a process not an event. This case is a perfect example of that cliché playing out. Now that the trial has concluded, the real fun is about to begin.