Law360, Dallas (January 18, 2017, 8:35 PM EST) -- The founder and the CEO of Facebook Inc. subsidiary Oculus VR LLC on Wednesday testified about the work they’d each put into building the virtual reality company from scratch, denying claims in a $2 billion Texas federal court suit that the Oculus Rift headset was built on stolen source code.

Oculus founder Palmer Luckey, who was 19 when he formed the company, and Oculus CEO Brendan Iribe, the company’s first investor, each told jurors about the work that happened between the early prototypes of the headset and the company’s $2 billion acquisition by Facebook. They face individual claims of wrongdoing by plaintiffs ZeniMax Media Inc. and its subsidiary id Software LLC, a video game development company that claims Oculus got its start with stolen source code and technological innovations created by an id employee.

Luckey had connected with ZeniMax’s John Carmack — who now works as chief technology officer at Oculus — in 2012, when Carmack requested a prototype of the Oculus Rift headset to use as he worked to develop a virtual reality video game for ZeniMax.

Iribe joined the company a few months later and said his understanding was that ZeniMax wanted Oculus to use two Carmack-written programs: a virtual reality demonstration and the virtual reality version of the Doom video game, as part of a co-promotion for the forthcoming Doom re-release and for the Oculus Rift headset. The two programs had been demonstrated at widely publicized conferences, and ZeniMax knew Oculus was showing the program to others, Iribe said.

“We thought we were acting in perfectly good faith as collaborators,” Iribe said.

ZeniMax has alleged that it shared certain code and technology with Luckey under a non-disclosure agreement that barred him and Oculus from showing their programs to others, including rival video game developers. It claims without the Carmack-written programs, Oculus would never have advanced from Luckey’s garage project to attract investors and eventually sell to Facebook.

Iribe’s background is in software engineering. He and two other software developers teamed up with Luckey just a few months after the first demonstration of the Oculus headset at one of the video game conferences, and said they began writing their own software for the headset days later.

Iribe also provided more detail about the financial terms that had been offered to ZeniMax when the companies were working together.

He said Oculus offered to give ZeniMax a 2 percent equity stake in the company in exchange for Carmack’s technical advice and “continued evangelism.” Oculus felt that offer was “very generous,” to just give away equity for free, particularly because Carmack is w+ell known in the industry for giving feedback and advice to just about anyone, including big names such as Microsoft and Sony, without getting any equity, Iribe said.

Oculus also offered to let ZeniMax participate in early fundraising rounds, investing at a time when family members of the Oculus team made up most of the roster of very early investors, Iribe said. Earlier in the trial, jurors heard that ZeniMax had a chance to buy a 15 percent stake in Oculus for $6 million, which it turned down and instead asked Oculus to pay for the time ZeniMax employees spent working on virtual reality programming compatible with the Oculus system.

In Luckey’s testimony, he told jurors that though Carmack had shared the two virtual reality programs with him, he only ever had access to final, executable versions of the program — never the proprietary source code ZeniMax claims was used to develop the Oculus Rift. He testified that though he showed the demonstration to others, the Carmack programs had already been made public at the two conferences where they received significant press attention.

Luckey also testified that Iribe first invested in his company before ever seeing a demonstration of the headset.

Facebook founder Mark Zuckerberg testified in the case Tuesday, saying a Facebook investigation of ZeniMax’s claims showed them to be false. Zuckerberg had also testified he was not aware that Oculus had ever used Carmack’s programs to demonstrate the headset.

ZeniMax is represented by Phillip Philbin and Michael Karson of Haynes and Boone LLP and Anthony Sammi, Kurt Hemr, Christopher Lisy, James Pak and William Casey of Skadden Arps Slate Meagher & Flom LLP.

Oculus and Facebook are represented by Richard A. Smith of Richard Smith PC, Elizabeth Ryan of Lynn Pinker Cox & Hurst LLP, Michael Rhodes, Heidi Keefe, Mark Weinstein and Elizabeth Stameshkin of Cooley LLP and Beth Wilkinson, Brant Bishop and Kosta Stojilkovic of Wilkinson Walsh & Eskovitz LLP.

The case is Zenimax Media Inc., et al v. Oculus VR Inc. et al., case number 3:14-cv-01849, in the U.S. District Court for the Northern District of Texas.