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Zenimax Media Inc. v. Oculus VR LLC

United States District Court, N.D. Texas, Dallas Division

June 27, 2018

ZENIMAX MEDIA INC. and ID SOFTWARE, LLC, Plaintiffs,
v.
OCULUS VR LLC, PALMER LUCKEY, FACEBOOK, INC., BRENDAN IRIBE, and JOHN CARMACK, Defendants.

          MEMORANDUM OPINION AND ORDER

          ED KINKEADE, UNITED STATES DISTRICT JUDGE.

         Before the Court are: (1) Plaintiffs' Renewed Motion for Judgment as a Matter of Law on Their Claim for Breach of Contract Against Defendant Palmer Luckey and Request for New Trial Solely on Damages Caused by that Breach (Doc. No. 994); (2) Defendants' Motion for Judgment as a Matter of Law Under Federal Rule of Civil Procedure 50(b) (Doc. No. 997); and (3) Defendants' Amended Motion in the Alternative for Partial New Trial Under Federal Rule of Civil Procedure 59(a) (Doc. No. 1004).

         The Court has carefully considered the motions, the responses, the replies, the supporting appendices, the applicable law, and any relevant portions of the record. The Court DENIES Plaintiffs' Renewed Motion for Judgment as a Matter of Law. The Court also DENIES Defendants' Amended Motion for Partial New Trial. The Court GRANTS in part Defendants' Motion for Judgment as a Matter of Law only as to Plaintiffs' false designation claims because the evidence establishing any damages and also the proximate cause of those damages as awarded by the jury is legally insufficient. The Court DENIES all other relief requested in Defendants' Motion for Judgment as a Matter of Law.

         I. Procedural Background

         After trial of this case, the jury returned a verdict, finding in relevant part that Defendants Oculus VR, LLC (“Oculus”), Mr. Palmer Luckey (“Luckey”), and Mr. Brendan Iribe (“Iribe”) were liable for false designation. The jury also awarded Plaintiffs actual damages for false designation in the amounts of $50, 000, 000.00 as to Oculus, $50, 000, 000.00 as to Mr. Luckey, and $150, 000, 000.00 as to Mr. Iribe.

         In their Motion for Judgment as a Matter of Law (“Defendants' Rule 50(b) Motion”), Defendants argue they are entitled to judgment as matter of law on Plaintiffs' claim of false designation because the record lacks legally sufficient evidence as to the proximate cause of injury and as to the amount of damages suffered.

         II. Legal Standards for Judgment as a Matter of Law

         Courts apply the same standard to a renewed motion for judgment as a matter of law under Federal Rule of Civil Procedure 50(b) as applies to motions for directed verdict under Federal Rule of Civil Procedure 50(a). Foradori v. Harris, 523 F.3d 477, 485 (5th Cir. 2008). The court may grant judgment as a matter of law “when a party has been fully heard on an issue during a jury trial and the court finds that a reasonable jury would not have legally sufficient evidentiary basis to find for a party on that issue.” Hurst v. Lee Cty., Miss., 764 F.3d 480, 483 (5th Cir. 2014); see Fed. R. Civ. P. 50(a). “‘In evaluating such a motion, the court must consider all of the evidence in the light most favorable to the nonmovant, drawing all factual inferences in favor of the non-moving party, and leaving credibility determinations, the weighing of evidence, and the drawing of legitimate inferences from the facts to the jury.'” Janvey v. Dillon Gage, Inc. of Dallas, 856 F.3d 377, 385 (5th Cir. 2017)(quoting Price v. Marathon Cheese Corp., 119 F.3d 330, 333 (5th Cir. 1997)). Judgment as a matter of law should be granted only when “‘the facts and inferences point so strongly and overwhelmingly in the movant's favor that jurors could not reasonably have reached a contrary verdict.'” Janvey, 856 F.3d at 384-85 (quoting Brown v. Sudduth, 675 F.3d 472, 477 (5th Cir. 2012)). The court must be “‘especially deferential'” to the jury's verdict. Janvey, 856 F.3d at 385.

         III. Legal Analysis

         A. Proof of Damages and Proximate Cause of Those Damages for False Designation

         Defendants argue several reasons the Court should grant judgment as a matter of law in favor of Defendants on Plaintiffs' false designation claim. One argument put forth by Defendants is that Plaintiffs did not present any evidence proving they suffered any damages related to Defendants' act of false designation. In their response, Plaintiffs contend there is legally sufficient evidence supporting the jury's damages award for Plaintiffs' reputational injuries and Defendants' unjust enrichment.

         A false designation claim derives from a provision of 15 U.S.C. § 1125. The statute provides, in relevant part, protection from the unauthorized use of:

any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which-
(A) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, ...

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