Augmented reality company Meta has sued a former employee for stealing trade secrets regarding its technology and market strategy. The startup filed suit in California yesterday against departed head of optics Zhangyi Zhong and AR company DreamWorld USA, as well as 20 unnamed defendants. It alleges that Zhong “shamelessly leveraged” his time at Meta to misappropriate its “technologies, supply chain, manufacturing methods, and relationships, as well as business, investment and market strategies,” using them to build a prototype at DreamWorld. DreamWorld calls the charges “completely baseless.”
Zhong worked for Meta for 16 months before departing in July of 2016. DreamWorld announced its first product, called the DreamGlass, last month. The headset is supposed to cost under $350, compared to the $949 Meta 2 headset, which started shipping last year.
According to Meta, that was possible because Zhong was heavily involved in developing the Meta 2, and had access to Meta’s extensive research about augmented reality, as well as information about its relationships to manufacturers. It alleges that he quit without notice under the false pretense of a medical condition, then secretly founded DreamWorld under a new nickname and began running it through an intermediary, which Meta believes is his wife or girlfriend. Thus, the company could create “a product that took Meta years of trial and error to prototype in a fraction of the time, with a fraction of the effort.”
Meta’s suspicions were raised by an early UploadVR article about DreamGlass, which described “a Meta-esque optics system” and expressed surprise at the headset’s low cost and aggressive release timeline. UploadVR said that the headset was smaller and lighter than the Meta 2, but that its tracking system performed significantly worse. Meta’s headset is designed to be tethered to a PC, while DreamGlass plugged into an Android phone. The lawsuit says that as an optical engineer, Zhong had “no technical experience” with aspects of the headset that appeared to be taken from Meta.
Augmented and mixed reality is a hotly contested space, and the Meta 2 is one of the best-known headsets, alongside Microsoft’s HoloLens. But Meta says DreamWorld “falsely and fraudulently held out to the public that DreamGlass is an entirely new product that has no relationship to any of its competitor’s previous products or prototypes.” It’s accusing the company and Zhong of trade secret misappropriation, breach of contract, and fraudulent business practices.
DreamWorld disputed the allegations. “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.”
Update June 10th, 8:45AM ET: Added comment from DreamWorld.