A US court has ordered Facebook and other defendants to pay $500m (£395m) after finding they unlawfully used a firm’s virtual reality technology.
The jury found Oculus, which Facebook bought in 2014, used computer code belonging to video game developer Zenimax to launch its own VR headset.
Oculus said it was “disappointed” and would appeal against the ruling.
The case threatened to overshadow Facebook’s latest results, which showed it enjoyed a strong end to the year.
Facebook’s net profit more than doubled to $3.6bn in the fourth quarter.
The social network was helped by 53% growth in advertising revenues, and said it was on course to hit two billion users in the first half of 2017.
Shortly before the results came out, the court awarded Zenimax damages from Facebook, Oculus and Oculus executives following a three-week trial.
Zenimax argued that its early innovations in virtual reality were unlawfully copied when Oculus built its own headset, the Rift.
“We are pleased that the jury in our case in the US District Court in Dallas has awarded Zenimax $500m for defendants’ unlawful infringement of our copyrights and trademarks,” said Zenimax chief executive Robert Altman.
The co-founder of Oculus, Palmer Luckey, was also found to have broken a non-disclosure agreement with the firm.
However, the jury ruled that none of the defendants misappropriated Zenimax’s trade secrets.