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Oculus, Palmer Luckey sued by Zenimax

Oculus, Palmer Luckey sued by Zenimax

Wed 21 May 2014 7:15pm GMT / 3:15pm EDT / 12:15pm PDT
TechnologyLegal

Zenimax and id Software allege that Oculus stole trade secrets relating to virtual reality tech

ZeniMax Media

Headquartered just north of Washington, D.C., with offices in Europe and Asia, ZeniMax Media is a unique...

zenimax.com/

What started out as an accusation on Twitter earlier this month has turned into an official legal matter. When Zenimax Media alleged that John Carmack took trade secrets with him to Oculus, he replied on Twitter that "Oculus uses zero lines of code that I wrote while under contract to Zenimax." Clearly Zenimax isn't backing down, and today Zenimax and its subsidiary, id Software, filed suit against Oculus VR, and its founder, Palmer Luckey.

The suit, which was filed in federal court in the U.S. District Court for the Northern District of Texas, alleges not only that Oculus and Luckey illegally misappropriated ZeniMax trade secrets relating to virtual reality technology, but it also states that Zenimax copyrights and trademarks were infringed. In the suit, ZeniMax is asserting claims "for breach of contract, unjust enrichment, and unfair competition against the defendants."

"Intellectual property forms the foundation of our business," said Robert Altman, Chairman & CEO of ZeniMax. "We cannot ignore the unlawful exploitation of intellectual property that we develop and own, nor will we allow misappropriation and infringement to go unaddressed."

"ZeniMax and id Software take their intellectual property rights seriously," added P. Anthony Sammi, a Partner of Skadden, Arps, Slate, Meagher & Flom LLP, which represents ZeniMax and id. "We now look to the federal courts and will pursue all appropriate measures available under the law to rectify defendants' egregious conduct."

Zenimax and id said that they tried to resolve the matter amicably with Oculus, but efforts to do so were not successful. Zenimax seems to be particularly annoyed with Luckey, alleging that he actually derived much of his VR learnings from Zenimax.

"Luckey has held himself out to the public as the visionary developer of virtual reality technology, when in fact the key technology Luckey used to establish Oculus was developed by ZeniMax," the company said in a press statement today. "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."

With Facebook behind the company now, Oculus certainly has the resources it needs to defend itself legally. This could turn into one ugly battle.

Update: You can peruse the full complaint here.

8 Comments

Axel Cushing
Writer / Blogger

102 128 1.3
Popular Comment
There are some fights you pick out of principle. There are some you pick out of pique. And there are some fights that you shouldn't pick at all. This one is one of those fights you shouldn't pick.

I am not a lawyer. I would like to think that a competent lawyer would have put the kibosh on this whole thing the moment that first prototype Rift unit showed up. Instead, reading through the complaint, ZeniMax comes off sounding less like a tech firm and more like a drug dealer. "Sure baby, the first taste is free. But you want another taste, you gotta give me a little something." The recurring thread that kept showing up was ZeniMax inexplicably failing to craft an NDA and/or partnership agreement before releasing any technology, hardware or software, to Oculus. If ZeniMax is telling the truth in every jot and tittle, then they're not going to garner a whole lot of sympathy for their case. What do you tell a judge in a case like this? "We're sorry, Your Honor, we kept giving all this stuff to him and he didn't do what we wanted him to do!" Either you've just admitted to gross incompetence or terminal stupidity, and the judge will be herniating himself from laughing so hard or risking an aneurysm from screaming at the lawyers.

There's a reason why game developers and publishers, and by extension other media producers like film studios and book publishers, don't generally take unsolicited works that simply show up in the mail. It's asking for trouble. There's too much chance that the original author will state that his work has been "stolen" by the big bad publisher and sue, and there's too much chance that the publisher might develop a property which can be considered legally derivative of the earlier unsolicited work. Somebody at ZeniMax had to realize that they were playing with fire from the very beginning, and if Facebook counsel can spin it to make ZeniMax look like a predatory corporation out to swallow a small businessman whole, it's going to be incredibly easy to do given ZeniMax's behavior as stipulated in the suit they filed.

The other thing that sticks in my mind is John Carmack. I know he's only human, but when the man comes right out and says that no ZeniMax code is in the Rift, I have a hard time not believing him. There's just not a big enough reason that I could think of for him to lie about it. Money? He's already got buckets of that. Fame? Ditto. Some bizarre political or social ideology? Don't see him running around crying "Hail Xenu!" or "Eat the rich!" An act of conscience? What could he have done that preyed on him so deeply he'd risk this sort of fight and subsequent damage to his reputation and his fortune? There's not a good enough explanation that fits the known facts. He had to have known how dangerous this whole thing was from a liability standpoint and I can't see a guy who's been around the block as much as he has not building a sufficiently strong firewall between his job and his hobbies, between Carmack the ZeniMax employee and Carmack the dude who hangs out on homebrew VR subreddits and DIY tech forums.

I'm not prepared to ascribe perfect innocence to Oculus, and I'm not prepared to unthinkingly believe ZeniMax's version of events. Not without a lot stronger evidence than cherry picked emails and YouTube links.

Posted:3 months ago

#1

Neil Young
Programmer

278 315 1.1
@Axel : I try to avoid attempting to call these cases these days, since there is a rarely enough information in the public domain, even for those with the prerequisite legal knowledge to assess it. I'm sure many will have a view on who they *want* to win - beyond that, we'll just have to wait and see what happens in court.

Posted:3 months ago

#2

Axel Cushing
Writer / Blogger

102 128 1.3
@Neil
Assuming it ever reaches court. I have to wonder how much of this is ZeniMax staking out an initial bargaining position for the "inevitable" settlement. As a wacky flight-of-fancy scenario, I have this weird image of Facebook "buying off" ZeniMax by buying it up in a hostile takeover. It'll never happen, of course, but as big as ZeniMax has gotten over the last several years, it's market valuation can't begin to compare to Facebook's. In a head to head court battle, ZeniMax can't have a war chest big enough to let this sort of thing drag out the way these cases normally seem to do, and I'd think at least one member on Facebook's board would object to feeding the company who's suing them the sort of money needed to fight such a battle. ZeniMax doesn't seem to be as hamfisted as SCO was about Linux, but they don't seem to be putting their best foot forward on this.

Posted:2 months ago

#3

Panagiotis Kouvelis
Founder & CEO

7 10 1.4
I don't think that a comparison on how big a company is should be made in a case of how right a company is. If ZeniMax is right and Occulus and partners really behaved the way that they describing on the official complaint, then Facebook should probably file a complaint for Occulus as well. I took 1 hour and read the full complaint and as much as it seems that ZeniMax is now trying to hit on a giant, there really is a case there.

Axel: ZeniMax is not really behaving as drug dealer and even if it did, then Occulus is the junkie and now owns money to the dealer, is that making the dealer wrong or the junkie?

Posted:2 months ago

#4

Axel Cushing
Writer / Blogger

102 128 1.3
@Panagiotis
The size of the companies has no bearing on the merits of the claims. It does, however, have a bearing on how much effort and resources can be spent filing motions, counter-motions, requests for evidence, requests to disallow evidence, billable hours, paying investigators, etc. The observation was logistical, not judicial.

Not to stretch the analogy too much farther, but in their role as "dealer," if they felt they were getting ripped off, they should have had somebody drop by and convince the "junkie" to pay up, possibly breaking the debtor's kneecap to get the point across. ZeniMax should have filed suit even before the Kickstarter was a vague idea floating in the back of Palmer Luckey's mind if they genuinely believed it was actionable. Instead, they fell into this cycle of "give out tech/access/resources, talk about deal, get blown off, repeat," and that's going off ZeniMax's side of the story. How many of us would, in that position, let that cycle play out more than once? I'd like to think most of us on here would press the point and make the other side know it was time to fish or cut bait.

Posted:2 months ago

#5

Brook Davidson
Artist / 3D design

62 93 1.5
If Zenimax is telling the truth .. then I would say Luckey did a very bad thing lol. However, that is one side to the story and of course Zenimax will tell the story in their favor.

However, even if the story is true ... I find it pretty odd to give a random person trade secrets and intellectual property with out first working something out with them or hiring them. I mean is it just me .. or is that really stupid?

Also .. if it was their technology to begin with .. why wouldn't they let Carmack work on it? Also .. why would Carmack be on luckey's side? It honestly makes no sense. If Luckey truly stole their work .. you would think it would have been heard of long before this facebook deal.

Sounds very fishy to me .. but im curious to see how this plays out.

Posted:2 months ago

#6

Axel Cushing
Writer / Blogger

102 128 1.3
@Brook
It's not just you.

Posted:2 months ago

#7

Petter Solberg
Freelance Writer & Artist

60 39 0.7
Why make games and pay developers when you can sue each other's asses off instead?

Edited 1 times. Last edit by Petter Solberg on 26th May 2014 11:47pm

Posted:2 months ago

#8

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