ZeniMax files lawsuit against Oculus VR

Earlier this month, id Software parent company ZeniMax accused John Carmack of sharing its intellectual property with Oculus VR. Carmack and Oculus both denied ZeniMax’s claims, and it looks like the matter will be hashed out in court. ZeniMax has officially filed a lawsuit against Oculus VR and its founder, Palmer Luckey. Here’s a snippet from the press release:

ZeniMax Media Inc. and its subsidiary, id Software LLC, filed suit today against Oculus VR, Inc. and its founder, Palmer Luckey, for illegally misappropriating ZeniMax trade secrets relating to virtual reality technology, and infringing ZeniMax copyrights and trademarks. ZeniMax is also asserting claims for breach of contract, unjust enrichment, and unfair competition against the defendants. The suit was filed in federal court in the U.S. District Court for the Northern District of Texas.
The suit arises from the defendants’ unlawful exploitation of intellectual property, including trade secrets, copyrighted computer code, and technical know-how relating to virtual reality technology that was developed by ZeniMax after years of research and investment. ZeniMax provided this valuable intellectual property to defendants under a binding Non-Disclosure Agreement that specifies such intellectual property is owned exclusively by ZeniMax and cannot be used, disclosed, or transferred to third parties without ZeniMax’s approval. ZeniMax’s intellectual property has provided the fundamental technology driving the Oculus Rift since its inception. Nevertheless, the defendants refused all requests from ZeniMax for reasonable compensation and continue to use ZeniMax’s intellectual property without authorization.

The PR is short on details, but there’s more information in the 46-page suit (PDF) posted by The Verge. According to the timeline in that document, Carmack began working on virtual reality in 2011, but he didn’t begin communicating with Luckey until the following year. ZeniMax says that after Carmack received the initial prototype from Luckey, he and other employees "transformed the Rift by adding physical hardware components and developing specialized software for its operation."

Here’s a picture of the early prototype in id’s offices:

The suit is littered with references to Rift enhancements allegedly borne from ZeniMax’s VR research. It claims that "throughout 2012, Oculus and Luckey lacked the necessary expertise and technical know-how to create a viable virtual reality headset." Without ZeniMax’s contributions, the company adds, "there would not have been a viable Rift product."

Oculus has maintained that ZeniMax "never contributed any IP or technology to Oculus." The VR firm told The Verge that it will vigorously defend that claim, and that the lawsuit "has no merit whatsoever."

Comments closed
    • yammerpickle2
    • 9 years ago

    Why are they not complaining about John’s work with Armadillo Aerospace? Basically greed. They passed on Oculus and VR when it was just a successful kickstarter, but as soon as two billion of Zuck’s friends show up they suddenly realized all the Oculus code and tech is Zenimax property. If Armadillo Aerospace has gotten a nice fat contract I’m sure they would be suing about it too.

    Sad to say but when this story first broke I cancelled my ESO account. I loved Skyrim, and really wanted to play ESO, but hate giving my money to support douchebags even more.

    I’m not a fan of FB, and was really disappointed when Oculus was bought out, but they certainly are trying to advance VR, and not slow it down by stopping development and tying it up with litigation.

    • l33t-g4m3r
    • 9 years ago

    I like where this is going…. Id could be put under Carmack again, and the next doom game will support VR. Win/Win.

    • Deanjo
    • 9 years ago

    [quote<]2. Zenimax sounds like their contracts are reaching too far. There are bits where they claim ownership of inventions that are even "conveived" by their employees, but even if the employees signed that agreement, it can (and will) be struck down in courts. They also claim that people like Carmack can't employ Znimax employees for several years after leaving, and that will almost certainly be struck down.[/quote<] Legal, has been tried and upheld many times in recent history of the IT industry. NDA/CA/PIA are all pretty standard affair where R&D is in play. There have even been heads of development divisions that have jumped ship to another company and were forced to become at least on paper head of development of another unrelated field of R&D.

    • TwoEars
    • 9 years ago

    begun the virtual war has…

    • NovusBogus
    • 9 years ago

    Indeed. My company is actually pretty generous in that they only lay claim to stuff related to the company’s area of business, but my last company had a “we own it all” clause. Would that stand up in court? Probably not, but how many individuals are willing to risk an insanely expensive lawsuit to find out?

    • Krogoth
    • 9 years ago

    It is all about the money. Zenimax just wants some of Failbook’s piggy bank and are trying to exploit an attack vector for this. Zenimax doesn’t really give a crap about VR hype.

    Hurry for current patent and copyright systems in the USA. For lawyers and by lawyers.

    • Billstevens
    • 9 years ago

    You can own code, you can own trade secrets, you can have copyrights or trademarks, you have patents but you really cant own an idea in its broadest sense. Even patents expire after 20 years, which is why big companies tend to ignore them and march forward with what they need to do.

    You can sue someone over using an idea that they came up with under employment with you but only under certain circumstances. The one they are trying to push is trade secrets. Essentially saying that some portion of the work id’s team did for the Rift would not have been possible had it not been for the inside knowledge they had of id technology.

    There are certainly many trade secrets at id revolving around engine technology. Whether or not any of those had an influence on the Rift is up to attorneys and expert witnesses to decide, assuming this doesn’t get settled prior to that.

    Code stealing would be copyright infringement, that probably didn’t happen but I am sure they will check. Physical schematics used to design the early rifts, if they got work into the DK1, would also fall under this category.

    • PenGun
    • 9 years ago

    “Its pretty clear that the Oculus wouldn’t be where it is without Carmack, but Carmack is right in saying Zenimax has no ownership of any tech VR”

    They own everything he did at id.

    • Farting Bob
    • 9 years ago

    It’s not the most fortunate acronym.

    • ericfulmer
    • 9 years ago

    Knowledge is just a colloquialism for the bigger intellectual property. I expect that the contract describes exactly what types of IP they claim to own, and it is very difficult to claim that you worked on technology for an extended period of time in one shop, then went to work in another shop working on the same technology, and that nothing you gained in the first shop was material to the work in the second shop.

    The challenge for both parties will be proving their cases. If Zenimax has a properly executed assignment of ownership statement signed by the party to be charged (Carmack), then the burden will be on Oculus to show that Carmack didn’t take IP with him. Especially if Zenimax was loose about that sharing when Oculus was a kickstarter darling.

    • crabjokeman
    • 9 years ago

    I googled “IANAL” and I got some really weird results. I guess I’ll look at urbandictionary first next time… :\

    • destroy.all.monsters
    • 9 years ago

    Well we didn’t need to wear VR goggles to see this one coming.

    • chuckula
    • 9 years ago

    IANAL but from a brief look it appears that Zenimax is suing over a breach of confidentiality agreements and threw in some copyright/trademark complaints too.

    Didn’t see anything about patents, but Zenimax may not really have any patents yet.

    • Billstevens
    • 9 years ago

    Most R&D is a dead end… That being said VR clearly wasn’t and Oculus and Zenimax should have worked out monetary compensation for work contributed a long time ago as their relationship has been dead since the kickstarter… If anything is due at all.

    Carmack wanted to keep working with id in VR. They could have still had ties to Oculus. Zenimax cut those ties probably because they felt they weren’t getting enough of a stake in Oculus as a company to make it worth more R&D money.

    In the end though they just wanted a piece of the pie. This is just how business that gets messy like this gets worked out when you have two well funded companies. The shame is how much money both sides will waste in attorney fees to work it out.

    • Billstevens
    • 9 years ago

    It was all a plot by Carmack.

    Step 1: Set up Oculus to be bought by Facebook.
    Step 2: Leave Zenimax with all his VR co-workers to work at Oculus
    Step 3: Enjoy a nice pay day and take public outcry over Facebook buying Oculus
    Step 4: Make public hate Zenimax for suing VR to make them forget Oculus is now owned by Facebook.

    • Billstevens
    • 9 years ago

    Yes I believe that would be the max claim they would be able to get or at least somewhere in that range. Seems odd that they would consider 2% ownership in a new company, even if that 2% were undilutable, if they felt they were so integral to their success. I would want the whole thing…

    Oh wait Zenimax has no interest in VR…

    • Chrispy_
    • 9 years ago

    Yeah, and Zuckerberg could just play the “nobody messes with the Zuckerberg” card by buying Zenimax outright with his spare change and then firing all employees related to the lawsuit.

    • Chrispy_
    • 9 years ago

    So Luckey created a prototype rift prior to E3 2012 and Carmack bodged the prototype to run a Doom3 demo.

    Based on the interest at E3, a kickstater campaign by LUCKEY raised the initial $2.4M. Not Zenimax, not Carmack, but LUCKEY.

    Subsequently another $75M was raised through venture funding by LUCKEY. Not Zenimax, not Carmack. Did Carmack add value to the Oculus Rift? Of course he did. Did Zenimax have any claim on the IP? No. This is Palmer’s product, conception, and funded by Palmer.

    The key thing is how much paperwork did Zenimax sign when Luckey gave them the wide-field-of-view prototype? It was his idea, his prototype and his baby. Zenimax (and Carmack) used the Rift with their software and tarted it up, but that does not make it theirs. If I go to a tune-up shop with a V8 track car I built and welded together in my own garage, then the shop suggests some improvements and implements them, that doesn’t make my track car their IP. No sirreee…..

    • gigafinger
    • 9 years ago

    All I see is a picture of Rob Corddry goofing off in front of his pc…

    • superjawes
    • 9 years ago

    Exactly, but that seems to be what Zenimax is claiming.

    • superjawes
    • 9 years ago

    Just doing some math here…I think the linked PDF says that Oculus offered 2% to Zanimax, or 5% with a $1.2 mil investment. Facebook buys Oculus for $2 bil (or $2,000 mil).

    So at 2%, Zenimax would get $40 million.
    At 5%, they would get $100 million.

    That’s probably not the exact offer, but $40 or $100 million is a good payday that Zenimax wouldn’t get because they didn’t have a stake in Oculus…

    • Billstevens
    • 9 years ago

    Its more complicated than that but its true they don’t necessarily need a patent or drawing. Zenimax would need to show some kind of example of a design though that was clearly reused in the DK1 and that would not have been obvious in the time frame that DK1 was independently developed. Thats tough.

    • Billstevens
    • 9 years ago

    Even if you do development some tech for them. I believe you can go develop the exact same tech for another company as long as you can reasonably show that you independently redid all of the development work and the origin of the solution wasn’t based on some trade secret that would be completely un-obvious to that worker outside of his former company. Assuming there were no patents.

    • Billstevens
    • 9 years ago

    Yeah that is bold claim especially because if Oculus did anything even half right they can easily prove their code is all original, though not without a lot of pain. Probably another ploy to encourage the settlement route.

    • Billstevens
    • 9 years ago

    Its a fine line. They are definitely overstating some of the contracts they had with their former employees but Oculus is going to have to ahoq the origin of a lot of its work didn’t come straight from Zenimax.

    Its pretty clear that the Oculus wouldn’t be where it is without Carmack, but Carmack is right in saying Zenimax has no ownership of any tech VR, there simply wasn’t enough time researching to have any real patents or protection. Not to say that Oculus won’t have to differentiate Oculus’s kickstarter prototype and development as something entirely separate from anything built at Zenimax.

    The sad part is Zenimax’s story though overstated is still plausible. Its clearly a dick move because based on other notes about the history Zenimax had little intent of getting into the VR hardware game. I would think their law suit loses some ground simply because outside of there brief investment in VR research, Oculus is in now way a competitor of Zenimax and is really doing no harm to their brand.

    It does seem likely that they may be able to claim some portion of the companies initial success and I can see them settling for a hefty settlement to avoid dredging over this long list of allegations. It almost sounds like Oculus doesn’t want to settle and wants to refute every claim.

    • superjawes
    • 9 years ago

    The company cannot claim “knowledge” because that is far too ambiguous for the courts. If you learn skills at one job and use those same skills at another, that is perfectly fine. Even if you come up with the idea while working at the company, you own the idea as long as it stays in your head. Giving the company ownership of ideas in your head could prevent you from working for any other company in the same industry.

    On the other hand, the company could make legitimate claims if you use company resources to develop your new thing or use a trade secret in your new thing. That is where the line is, and the courts will have to decide if the line was crossed, who crossed that line, and what Zenimax deserves (if anything).

    • JosiahBradley
    • 9 years ago

    Worthless? They’re a giant gaming company worth around a billion. Skyrim, Elder Scolls, etc etc.

    • ericfulmer
    • 9 years ago

    To me, Zenimax has nothing to lose by this action. They have a legitimate stake in everything Carmack did related to gaming, graphics, or computers while he was employed there.

    In my industry, and I assume in high-tech as well, your company has wide latitude to claim that anything you developed or thought of while employed is something they own in whole or part, and they require you agree to that as a condition of employment. Then, as the employee, the burden falls on you to show that you didn’t use knowledge gained while employed to develop that brilliant idea.

    • mcnabney
    • 9 years ago

    It sounds like they can prove that Carmack used a lot of his time while employed by Zenimax developing products for Oculus. He even used other company resources.

    I think the case is much more solid against Carmack, but because Oculus hired him they also acquired his liabilities. There is a valid case here.

    • NeelyCam
    • 9 years ago

    [quote<]If they are trying to own the un-patented knowledge and creativity of an individual then no matter what they have on paper it will be struck down in court.[/quote<] Not necessarily. Patented or not, technology developed by their employee belongs to them, and said employee cannot just leave and take it to someone else.

    • DPete27
    • 9 years ago

    We won’t settle on your lawsuit…but we WILL buy your (worthless) company!! A bit counter-intuitive…

    • Roo5ter
    • 9 years ago

    Ok correct me if I am wrong here, Zenimax claimed that Oculus also stole code, then Oculus posted their entire source code for all to see and Zenimax never could specify what part of the code was stolen. Facebook has tons of money then buys Oculus, then Zenimax says, HEY, some of that money should be ours!

    • Usacomp2k3
    • 9 years ago

    You do realize that R&D comes out of profit that is made by companies on items they sell. If they are not selling their products with any margin or don’t get any cash inflow from licensing designs, then there is no money to create future products…

    • superjawes
    • 9 years ago

    [quote<]-If they are trying to own the un-patented knowledge and creativity of an individual then no matter what they have on paper it will be struck down in court.[/quote<] Exactly. When it comes to the hardware, they're going to need some sort of drawing that proves that Rift is using a Zenimax design. For software, they would have to show that code was copy/pasted, and it has to be complex enough to make it impossible for an experienced programmer to reproduce exactly (to rule out the "I've designed this before and have to design it again" situation).

    • kamikaziechameleon
    • 9 years ago

    I understand the angle that Zenimax is presenting (weather true or not) this case will play out based on how Zenimax makes its case in the courtroom.

    -If they are defending patents, plain and simple they win.

    -If they are trying to own the un-patented knowledge and creativity of an individual then no matter what they have on paper it will be struck down in court.

    • Grigory
    • 9 years ago

    It would take a lot more for me to cheer for NSAbook.

    • BlackStar
    • 9 years ago

    Never thought anything would make me cheer for Facebook. Great job, Zenimax!

    • superjawes
    • 9 years ago

    Okay, I actually spent some time reading PDF, and here are my thoughts…

    1. Zenimax might have a claim to some technology or software, assuming that their claims are correct on that front. They are not claiming to own all ideas related to VR, so the courts will have to decide this one. (It is obviously in Zenimax’s best interest to stretch and spin the facts in their favor.)

    2. Zenimax sounds like their contracts are reaching too far. There are bits where they claim ownership of inventions that are even “conveived” by their employees, but even if the employees signed that agreement, it can (and will) be struck down in courts. They also claim that people like Carmack can’t employ Znimax employees for several years after leaving, and that will almost certainly be struck down.

    3. This case will definitely change Kickstarter’s policies.

    • Mad_Dane
    • 9 years ago

    And if they are not in dire straits now, they just pissed on a godlike figure in the gaming world, I bet the wrath of the nerds will show up on the bottom line, I know I’m done with their games!
    I’m so sick of all this patent bullshit, its hindering human evolution, if we would just share all knowledge we would be in the next solar system by now, to all you greedy people ..i.. Am I the only one really disappointed in the human race? Take the fantasies you had as a kid when you watched sci-fi, and look at where we are as a race now, then thinks about how those match up.

    • JosiahBradley
    • 9 years ago

    ZeniMax vs Facebook lawyers. I feel a great slaughter is about to happen. Maybe Facebook will buy ZeniMax.

    • tanker27
    • 9 years ago

    I’m still not sure about this case. Who knew that Zenimax were the masters of VR.

    I think they would have a better chance going after Carmack and using a non-compete clause (If he signed one) Saying he worked on Oculus stuff during id work hours and used Zenimax money, offices, and tech (tech as in computers, copiers, fax machine, internet, etc. etc.) to further Oculus.

    What ever happens it is what it is, Zenimax is all butt hurt that Carmack left, went full time to Oculus who then got bought out for bajillions by Facebook and now Zenimax wants a piece of that pie.

    You know on second thought…….maybe Zenimax is having trouble staying afloat monetarily and this is a way to get cash without having to sell of pieces. Just a thought though. (but I wouldn’t be surprised if the very next headline after Zenimax loses is that they are in dire straights and are selling off IP)

Pin It on Pinterest

Share This

Share this post with your friends!