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ZeniMax Files Lawsuit Against Oculus

This dispute just became a bit more serious.

It seems ZeniMax and Oculus have not been able to find common ground behind-the-scenes, so the companies are possibly headed to court, as ZeniMax has officially filed a lawsuit against the VR maker.

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I've gone ahead and uploaded the court documents filed in Texas today, if you wish to peruse the 46-page complaint.

The complaint outlines, from ZeniMax's perspective, the timeline of Oculus Rift's transition from hobby project to Facebook sale. It alleges the device could not have become a transformative technology without the work contributed by John Carmack and other employees at ZeniMax while all were employed at ZeniMax.

ZeniMax alleges Oculus founder Palmer Luckey had ongoing contact with Carmack and other ZeniMax employees ahead of the successful Kickstarter project and long after, and the technical knowhow provided to Luckey was instrumental in the Oculus Rift's development.

Carmack, a longtime VR evangelist, reportedly first discovered the Oculus Rift through an online forum, and received a prototype as early as April 2012, several months before the Kickstarter.

Much of the complaint focuses on the relationship between Carmack and Luckey, specifically highlighting the many times in which the two of them publicly acknowledged the contributions of one another to the Oculus Rift long ahead of Carmack actually joining the company.

Oculus responded to today's lawsuit with a brief statement.

"The lawsuit filed by ZeniMax has no merit whatsoever," the company said. "As we have previously said, ZeniMax did not contribute to any Oculus technology. Oculus will defend these claims vigorously."

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Patrick Klepek on Google+
144 CommentsRefresh

Avatar image for teacher747
Posted By teacher747

boooooo that man! BOOOOOO

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Posted By jasondesante

wahh :( good job corporate douches!

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Posted By xplusy

And here we go…

Avatar image for spraynardtatum
Posted By spraynardtatum

Why do people even hate facebook so much? its just a website. I don't use it very much anymore. I just don't think that people need to have such strong feelings about it. Its okay not to like it or to not want to engage with it but open hatred for it seems like too much.

And the whole oculus becoming a facebook viewer is just absurd. How could a sensible person even reach that conclusion?

SIDEBAR: Why do people love Zenimax so much? They put out a good but broken open world FPS game every few years or so and the rest is pretty much garbage.

facebook is not just a website I don't blame you for losing count of all the other things it is though. it's at least 10,000,000 other things. One of them being the most powerful and influential super computers on the face of the planet with more data on the human population than is even conceivable. All of that data freely available for facebook to sell to whomever they want to influence whatever they want.

Let me put it this way, Mark Zuckerberg is able to call the fucking president of the United States of America to lecture him about how he was making facebook look bad.

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Posted By utternyms

@murdoc_: Sure, I have little doubt you're right there. But it doesn't make the concept any less icky.

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Posted By mlarrabee

@howardee said:

@mlarrabee said:

@spraynardtatum: There was no declaration that Oculus would remain independent, but Luckey selling to Facebook after taking people's money for a gaming VR headset but before ever delivering a gaming VR headset soured me in much the same way.

Except they delivered a gaming VR headset way before the Facebook deal. To everyone who backed $275+ on Kickstarter. Then they continued to sell those headsets on their website.

I can't wrap my head around the fact that people keep referring to the Oculus Kickstarter as a scam. The aim of the Kickstarter was to fund a Rift development kit. That's exactly what Oculus delivered. The first line of the Kickstarter reads, "Developer kit for the Oculus Rift."

You're right, Oculus was never advertised as a viable way to play games, but only as a dev kit. A better explanation of my feelings would be to say that Luckey should have made it more clear that the Kickstarter could, or now, would never lead to a widely available VR headset suitable for gaming.

It was less a case of fine print and more one of people not reading the "buy one for the price of two" sign properly.

Avatar image for devil240z
Posted By Devil240Z

@devil240z said:

Why do people even hate facebook so much? its just a website. I don't use it very much anymore. I just don't think that people need to have such strong feelings about it. Its okay not to like it or to not want to engage with it but open hatred for it seems like too much.

The reason is very plain the way they use your personal information the way you can not actually delete your account only suspend it. The rights they have over anything you post on facebook (they own anything you put on there and can use it anyway they wish) was about to say without your consent.. but have you even looked at there EULA.

None of that seems like a big deal to me. Don't post stuff to facebook that you don't want them to own. Everything I post to FB is actually a link to Google+ so all they own is a link.

Avatar image for bunny_fire
Posted By Bunny_Fire

Why do people even hate facebook so much? its just a website. I don't use it very much anymore. I just don't think that people need to have such strong feelings about it. Its okay not to like it or to not want to engage with it but open hatred for it seems like too much.

The reason is very plain the way they use your personal information the way you can not actually delete your account only suspend it. The rights they have over anything you post on facebook (they own anything you put on there and can use it anyway they wish) was about to say without your consent.. but have you even looked at there EULA.

Avatar image for devil240z
Edited By Devil240Z

Why do people even hate facebook so much? its just a website. I don't use it very much anymore. I just don't think that people need to have such strong feelings about it. Its okay not to like it or to not want to engage with it but open hatred for it seems like too much.

And the whole oculus becoming a facebook viewer is just absurd. How could a sensible person even reach that conclusion?

SIDEBAR: Why do people love Zenimax so much? They put out a good but broken open world FPS game every few years or so and the rest is pretty much garbage.

Avatar image for cbyrne
Posted By CByrne

Either way, we all loose. We are the consumers we will pay for this dick measuring contest.

Avatar image for pj
Posted By PJ
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Posted By GERALTITUDE

To think that only a few short months ago Oculus was the embodiment of a do-it-yourself technology revolution answering a decades old dream - now two corporate giants are duking it out over who gets how much cash.

Modern times.

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Edited By spraynardtatum

@garviell said:

And somehow Bethesta still keeps getting love all over the internet >_>

But yea Zenimax is a terrible fucking company

facebook is also a terrible fucking company. Just sayin'

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Posted By Garviell

And somehow Bethesta still keeps getting love all over the internet >_>

But yea Zenimax is a terrible fucking company

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Posted By Homelessbird

@foggen: Great analysis. I'm with you on being frustrated with Zenimax on this one. I haven't gone through the entire 46 pages myself, but from what you're saying and what I read, it sounds like neither Luckey or Carmack signed any sort of non-compete agreement here, so it's just the non-disclosure issue they're dealing with, which will be much better ground for the Oculus lawyers to fight their case on. I'm no IP lawyer (although my cousin is), but it seems to me like Zenimax is reaching a bit with the way they're defining the terms of their NDA.

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Posted By howardee

@spraynardtatum: There was no declaration that Oculus would remain independent, but Luckey selling to Facebook after taking people's money for a gaming VR headset but before ever delivering a gaming VR headset soured me in much the same way.

Except they delivered a gaming VR headset way before the Facebook deal. To everyone who backed $275+ on Kickstarter. Then they continued to sell those headsets on their website.

I can't wrap my head around the fact that people keep referring to the Oculus Kickstarter as a scam. The aim of the Kickstarter was to fund a Rift development kit. That's exactly what Oculus delivered. The first line of the Kickstarter reads, "Developer kit for the Oculus Rift."

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Posted By Vinnypop

the real lawsuit starts here!

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Posted By nofzac

@rejizzle said:

For once I'm somewhat glad that Facebook bought Oculus. If Oculus was still independent an ongoing legal battle might've just sent them into bankruptcy.

I'm pretty sure if they still were independent this would never have happend ... not until they finshed and made lots of money anyways.

This is exactly right - the only reason there is a lawsuit, is because it went form indi project that was crowd funded, into a huge sale to another tech company. Once they sold out to FB, it opened the door to Zenimax to come in and say they deserve some of the monies.

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Posted By Murdoc_

@freddiefiasco: Welcome to every contract anyone has ever signed in the gaming industry.

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Posted By Seeric

@spraynardtatum:

@seeric said:

I do have to wonder if ZeniMax is really prepared to deal with the wrath of a substantial part of the Internet which would fall upon them if their actions result in delaying the Oculus Rift's launch though.

What a scary thing to say. What do you expect the "wrath of a substantial part of the internet" will do if they don't get their new toy when they want it?

For the most part, they'll probably just whine, complain, and send nasty e-mails or death threats, which isn't a big deal for a large company like ZeniMax. However, there's also the much more serious risk of personal information (home phone numbers, addresses, etc) being leaked and circulated, private business e-mails being leaked, and in general various pieces of information could be revealed which would be bad both for ZeniMax as a company and for individual employees. Being branded as one of the 'bad guys' by your target audience also could lead to a drop in sales.

Of course, all of that is a pretty insubstantial price to pay if they win the lawsuit.

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Posted By spraynardtatum

@seeric said:

This still seems to in large part be a gamble on the part of ZeniMax; they'll almost certainly lose, but they would gain a massive amount of profit if they win and need to be paid a percentage of Oculus Rift revenue or something similar.

I do have to wonder if ZeniMax is really prepared to deal with the wrath of a substantial part of the Internet which would fall upon them if their actions result in delaying the Oculus Rift's launch though.

What a scary thing to say. What do you expect the "wrath of a substantial part of the internet" will do if they don't get their new toy when they want it?

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Posted By Seeric

This still seems to in large part be a gamble on the part of ZeniMax; they'll almost certainly lose, but they would gain a massive amount of profit if they win and need to be paid a percentage of Oculus Rift revenue or something similar.

I do have to wonder if ZeniMax is really prepared to deal with the wrath of a substantial part of the Internet which would fall upon them if their actions result in delaying the Oculus Rift's launch though.

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Posted By gaminginpublic

I saw the videos where John Carmack was explaining what he did with the Oculus. I honestly thought he owned %50 of it. Why is Oculus claiming Carmack didn't help when he did? That's pretty shady.

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Posted By Foggen

@zevvion said:

@DrSwank said:

@foggen said:

If Carmack is telling the truth (which I will assume until proven otherwise) no code he wrote while under contract with ZeniMax is used by Oculus. If that's the case, since there are few if any technology patents in Oculus VR there is really no IP to fight over. Carmack provided free help to Oculus when they were a hobbyist project, and ZeniMax is basically asserting ownership based on that equity-free relationship.

The problem for the defendants though (Carmack included) is they have to defend the allegations with proof. Proving that Carmack didn't write any code for Oculus while at Zenimax is going to be nearly impossible. The prosecution only has to outline the probable likelihood that code was shared by Carmack by exhibiting the relationship between Luckey and Carmack. Oculus must disprove the likelihood that code was shared. It's all so reminiscent of the founding of the social network itself. It's harder to disprove the existence of something, than prove the likelihood or probability thereof.

With these sorts of cases, the prosecution almost always has a distinct advantage in court due to the difficulty in disproving versus the ease of proving likelihood. Proving likelihood persuades the courts decision in the end.

Does this make sense?

No, it doesn't, because that is not how it works.

You always need to prove that 'X' is the case. You never need to disprove that 'X' isn't the case. How horrible if it worked like you said.

If ZeniMax says they used this code, then it won't be taken as truth of their word. They need to prove that their code was used. Not the other way around. Likewise, if I saw you murdered someone, I need to prove that you did. You don't need to disprove you didn't.

Does 'innocent until proven guilty' ring a bell? That's how it works, and it is how it is supposed to work. What you suggest sounds grim as hell.

Civil cases work on a "preponderance of evidence" standard, not a "beyond a reasonable doubt" standard, but you are correct that ZeniMax will have to allege infringement of specific pieces of data.

I've been reading their complaint this morning, and it appears that ZeniMax's argument hinges on the notion that every piece of advice or development help Carmack gave Palmer Luckey constitutes "proprietary information" subject to an NDA that Luckey signed presumably so that he could use test code that Carmack sent him. This is despite the fact that Carmack published White Papers on things like latency reduction techniques and spoke publicly about a lot of the things. Then they're saying that incorporating that practical advice (like "hey, I noticed your calibration is off") into the Oculus Rift product constitutes "disclosure" under the NDA.

What's exceptionally frustrating about this document is how it paints Luckey's friendly relationship with John Carmack and Todd Hollenshead as formal negotiations with ZeniMax. A running theme is a series of implications that Luckey is fundamentally incompetent to produce a product, and that what he used was "Proprietary ZeniMax Technology". As evidence, they have friendly emails between Luckey and Carmack where Luckey thanks Carmack for his help, and a picture of Carmack giving Luckey an hand at QuakeCon getting their demo up and running.

There are discussions of ZeniMax acquiring an equity stake in Oculus, but those appear to be framed around an investment deal that never actually took place, or a Doom3 bundling partnership that also fell through. The whole thing reads like the sourest of grapes, and it's making me really hate ZeniMax.

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Edited By Extintor

in a weird PR way I think this is very good for facebook. Weeks ago, they were 100% evil in the eyes of some Oculus-watchers. Now that facebook are on the receiving end of some outrageous litigious bullshit from Zenimax, they're no longer the least popular party in this whole situation.

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Edited By ptys
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Posted By Dr_Perscitus

@set said:

If you have a neutral stance on this, just know that the founders of Zenimax are nothing but scummy lawyers. Suing is what they know best.

Yeah, and Facebook is a plucky internet start-up company who will be defending themselves in court.

Are there any lawyers or solicitors in the comments who can offer an expert opinion?

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Posted By greyhawk

Zenimax, did not bother with lawsuit when it was a small independant project. Oculus. Why? Their claims would be the same. No they acted after the buyout. Just seems like a money grab from zenimax. I say save face, drop the lawsuit, and support oculus.

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Posted By The_tato

Aside from those of us who frequent gaming news/culture sites, does the general public know or see what is going on with Occulus at all?

I'm mostly asking because I imagine that a new product like this type of VR needs as much good press as possible if its going to make a lasting impact on a market that will allow it to grow. Whether or not Zenimax has any legal merit for their case, I wonder if getting the lawsuit over quickly and quietly is in Facebook/Occulus' best interest on a consumer level. Not to mention the legal costs of a court case.

Can VR catch on in a mass market with only a peripheral that may or may not be expensive to purchase, and also comes with legal baggage about stolen technology?

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Posted By Fruger

a gif? really.

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Edited By qlanth

What people do in their spare time doesn't matter, even if that's working for a different company that's in the same field.

Unless it does. Check out "moonlighting clause"

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Edited By Zevvion

@DrSwank said:

@foggen said:

If Carmack is telling the truth (which I will assume until proven otherwise) no code he wrote while under contract with ZeniMax is used by Oculus. If that's the case, since there are few if any technology patents in Oculus VR there is really no IP to fight over. Carmack provided free help to Oculus when they were a hobbyist project, and ZeniMax is basically asserting ownership based on that equity-free relationship.

The problem for the defendants though (Carmack included) is they have to defend the allegations with proof. Proving that Carmack didn't write any code for Oculus while at Zenimax is going to be nearly impossible. The prosecution only has to outline the probable likelihood that code was shared by Carmack by exhibiting the relationship between Luckey and Carmack. Oculus must disprove the likelihood that code was shared. It's all so reminiscent of the founding of the social network itself. It's harder to disprove the existence of something, than prove the likelihood or probability thereof.

With these sorts of cases, the prosecution almost always has a distinct advantage in court due to the difficulty in disproving versus the ease of proving likelihood. Proving likelihood persuades the courts decision in the end.

Does this make sense?

No, it doesn't, because that is not how it works.

You always need to prove that 'X' is the case. You never need to disprove that 'X' isn't the case. How horrible if it worked like you said.

If ZeniMax says they used this code, then it won't be taken as truth of their word. They need to prove that their code was used. Not the other way around. Likewise, if I saw you murdered someone, I need to prove that you did. You don't need to disprove you didn't.

Does 'innocent until proven guilty' ring a bell? That's how it works, and it is how it is supposed to work. What you suggest sounds grim as hell.

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Posted By Corvak

Facebook probably doesnt even have to lay out an extra expense in legal fees. They probably retain a law firm anyway.

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Posted By Corevi

What people do in their spare time doesn't matter, even if that's working for a different company that's in the same field.

Avatar image for gkhan
Posted By gkhan

@gkhan said:

@midjet said:

Anyone think this is going to be fought tooth and nail? Does facebook have a history of settling when it comes to litigation?

I'm thinking that since Facebook has deep enough coffers, they'll probably fight it tooth and nail. They don't need to settle, and they didn't spend a billion dollars for a company only to need to share it with someone else, or pay them any money. It's going to be a fun year or two.

I'm thinking that if Zeni is going to pursue their '20%,' then that would equate to roughly $200 million of the purchase price. This is assuming they would likely not get their ridiculous non-dilutable share.

If I were Facebook, I'd rather pay $200 million in legal fees telling Zeni to Fuck Right Off then give them $200 million to spend. Granted, I'm no law expert.

Exactly. Given that Facebook is in a position to say "Fuck Off", they're gonna say "Fuck Off". No way they give in to ZeniMax.

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Posted By ripelivejam

man i wouldn't want to be john carmack right now.

oh wait, i would.

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Posted By viking_funeral

@gkhan said:

@midjet said:

Anyone think this is going to be fought tooth and nail? Does facebook have a history of settling when it comes to litigation?

I'm thinking that since Facebook has deep enough coffers, they'll probably fight it tooth and nail. They don't need to settle, and they didn't spend a billion dollars for a company only to need to share it with someone else, or pay them any money. It's going to be a fun year or two.

I'm thinking that if Zeni is going to pursue their '20%,' then that would equate to roughly $200 million of the purchase price. This is assuming they would likely not get their ridiculous non-dilutable share.

If I were Facebook, I'd rather pay $200 million in legal fees telling Zeni to Fuck Right Off then give them $200 million to spend. Granted, I'm no law expert.

Avatar image for rowr
Posted By Rowr

Kind of weird to see people expressing their hope that facebook gets taken down in all this.

Zenimax seems to be the one out of line clutching at straws trying to make some money out of something they didn't bother to show support to in the first place. If they were to do some damage to facebook in all this surely that does nothing for the actual benefit of VR tech.

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Posted By MonkeyPunch

So... no official versions of Dishonored, Quake, Fallout and Wolfenstein on Oculus, I take it? xD

Avatar image for laserjesus
Posted By LaserJesus

After reading through that whole thing, it sounds like Zenimax has some valid complaints specifically regarding contracts signed by Luckey and Carmack. While it is total shit that companies think they own you, when you sign a contract that says that the company basically owns you, then that has some force of law behind it.

Other things seem ridiculous and petty though. Zenimax really can't expect to be paid damages because Oculus hired their employees, can they? It's the employees who violated their non-compete contracts, not Oculus. It also seems suspicious how they would have screenshots of e-mails, but all of the malicious things they claimed that Oculus said or did weren't in those screenshots and instead were described in a following line.

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Posted By Tarsier

how did oculus get fumbled so ridiculously into the wrong hands?

Avatar image for impartialgecko
Posted By impartialgecko

I can't say I blame Zenimax for doing this. IP regulation gives plenty of room for employers to claim that the work of their employees at other firms was partly theirs, especially when it's a coder taking his coding skills elsewhere. Factor the fact that Zenimax got jack out of the id software acquisition relative to what they were expecting and of course, they want some of that sweet Carmack money that he failed to deliver while he was at the company. Oculus is trying to make a show of force, but Zenimax wouldn't have filed this lawsuit unless they thought they could either win or get a juicy settlement. No way they walk out of this with nothing.

Avatar image for minsky
Posted By Minsky

This is a total PR jackpot for Facebook.

Avatar image for y2ken
Edited By Y2Ken

I'm more interested to see how this pans out than I am for the device itself (although still not especially so). But I'm interested reading through comments how many people seem to want Zenimax to come out on top simply because they have a strong dislike of Facebook, whether they believe Zenimax's claim to be in the right or not. I'm not going to swing completely to either side on this one but my initial, unfounded, thought was that if Zenimax didn't come to a clean negotiation with Oculus before that makes this seem more like a cash grab. The 'scrolls' debacle isn't helping their case either. That said, perhaps they have a valid claim; I'm interested to see where this goes.

Avatar image for oppai2
Posted By oppai2

@freakin9: I thought that´s the whole point of the internet. It was invented for that very reason as we all know!

Avatar image for dr_mantas
Posted By dr_mantas

I would be much more understanding of Zenimax's position if they hadn't refused to work with Oculus without ridiculous nondilutable stakes in the company. They had their chance to participate, and they got too greedy.

Carmack was interested in a new cool project, started helping out and finally left his boring old job for something that actually required his skills. And the corporatocrasy decided that just won't do, unless they get some money out of it. That is horribly anti-innovation.

Now I'm no fan of Facebook, but I hope their lawyers grind this silliness into dust.

Avatar image for sephirm87
Posted By sephirm87

@DrSwank: that's backwards. The plaintiff bringing the suit has the burden of proof.

Avatar image for crithon
Posted By crithon

so basically John Carmack got booty call emails from Palmer Luckey reading "Sup, wanna play some multiplayer tonight?" This is gonna be fun to watch

Avatar image for DrSwank
Posted By DrSwank

@foggen said:

If Carmack is telling the truth (which I will assume until proven otherwise) no code he wrote while under contract with ZeniMax is used by Oculus. If that's the case, since there are few if any technology patents in Oculus VR there is really no IP to fight over. Carmack provided free help to Oculus when they were a hobbyist project, and ZeniMax is basically asserting ownership based on that equity-free relationship.

The problem for the defendants though (Carmack included) is they have to defend the allegations with proof. Proving that Carmack didn't write any code for Oculus while at Zenimax is going to be nearly impossible. The prosecution only has to outline the probable likelihood that code was shared by Carmack by exhibiting the relationship between Luckey and Carmack. Oculus must disprove the likelihood that code was shared. It's all so reminiscent of the founding of the social network itself. It's harder to disprove the existence of something, than prove the likelihood or probability thereof.

With these sorts of cases, the prosecution almost always has a distinct advantage in court due to the difficulty in disproving versus the ease of proving likelihood. Proving likelihood persuades the courts decision in the end.

Does this make sense?