Meta Sues Former Employee Over Trade Secrets

Meta Company filed suit today against a former employee and his startup DreamWorld USA, Inc. for the misappropriation of trade secrets and confidential information.

Zhangyi Zhong, formerly head the optics department at Meta, his company, and 20 unnamed actors are accused of misappropriation of trade secrets and confidential information under the Defend Trade Secrets Act and California Uniform Trade Secrets Act.

The lawsuit, filed in federal court in the Northern District of California, also claims breach of contract, breach of the duty of loyalty, and intentional interference with contractual relations. The defendants are also accused of violating the a section of the California Business and Professions Code covering unfair competition.

In the filing obtained by Next Reality, Meta posits that Zhong used confidential knowledge from his time at Meta to accelerate development of DreamWorld's headset, DreamGlass. A preorder page for the headset is currently up on DreamWorld's website (which, as Meta points out, mimics their own URL).

The suit notes that Zhong had wide access to confidential information due to his role, which was to develop an "affordable, wide field-of-view off-axis optical engine." Zhong had access to Meta's technologies, supply chain, manufacturing methods and relationships, as well as business, investment and market strategies" developed over the course of three years. Meta argues that DreamWorld could not develop a prototype headset with a purported 100 degrees field of view for $350 retail unless they had access to this information.

The documents go on to state that renderings of the optical engine on DreamGlass closely resemble prototype engines designed by Meta during Zhong's employment at Meta, including a 102-degree field of view design developed by Zhong himself in November 2015. Meta points to other features of DreamGlass detailed in the UploadVR article, included as an exhibit to the suit, and YouTube videos cited by DreamWorld therein, such as sensor array and hand-tracking functionality, as well which Meta concludes that Zhong appropriated from his tenure at Meta.

Meta also alleges that Zhong took steps to conceal his identity, changing his nickname from "Johnny," which he went by during his stint at Meta, to "Kevin," and failing to update his LinkedIn page since leaving Meta. (In fact, the promotional video above comes from Zhong's profile.)

The plaintiff issued a statement regarding the suit, noting that they will refrain from further comment.

Meta Company hopes that all of its employees - past and present - achieve great career and personal success. Former Meta employees are ambassadors of our brand and culture, and Meta is proud to support them and their current endeavors. At the same time, Meta also takes the confidentiality of its trade secrets and proprietary technical, strategic and business information very seriously. By filing this lawsuit, Meta is seeking to protect years of confidential research and development into innovations that are incorporated into its current and future products from being wrongfully misappropriated by a former employee solely for personal gain.

Also named in the lawsuit are twenty unknown individuals who they believe have contributed to the accused occurrences. The names and roles of those individuals were unknown to Meta and their counsel at the time the suit was filed, though they intend to amend the filing when their identities are discovered.

Efforts to reach Zhong, DreamWorld, or the twenty unknown actors, for comment, were unsuccessful at the time of publication.

Update: Zhong replied after publication with the following statement: "All the claims alleged by Meta Company are completely baseless and without merit. Dreamworld USA Inc. and myself are discussing this matter with our attorney and will take actions to respond in due course."

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Cover image via DreamWorld/YouTube