Did Oculus steal their technology? ZeniMax Media claims so, alleging that Oculus not only stole ZeniMax's intellectual property, but also that they destroyed evidence to prevent being caught.
The controversial case has finally come to a head as the trial starts, 2.5 years after the initial lawsuit filing. ZeniMax Media may not ring a bell, but you might recognize some of their children companies: Bethesda Softworks (Skyrim/The Elder Scrolls and Fallout), Arkane Studios (Dishonored and Prey), and id Software (Doom, Quake, and Rage).
There are some pretty serious allegations there, with ZeniMax asserting that they can absolutely prove the accusations while Oculus has repeatedly claimed the suit is merely out of spite and ZeniMax is a sore loser. The gist of the matter is that ZeniMax claims that former employees stole intellectual property while Oculus knowingly used and benefited from it.
The Main Allegations
- Common law misappropriation of trade secrets.
- Copyright infringement.
- Unfair competition, including violating the NDA and using intellectual property without permission.
- Unjust enrichment due to refusal to compensate ZeniMax and confidential information from hiring former ZeniMax employees.
- Trademark infringement.
- False designation, the implication that Oculus' products are approved by ZeniMax.
While ZeniMax helped out Oculus with hardware, software, and expertise, they also discussed financial compensation for all of the above which never came. After Oculus stopped cooperating with ZeniMax, ZeniMax ordered John Carmack, the Technical Director for id Software, to stop providing Oculus with information or help. Instead, Carmack joined Oculus and allegedly began poaching former ZeniMax coworkers.
Also at issue is Carmack's contract, which stated that any work or inventions done while under ZeniMax's employ would belong to ZeniMax. This is a pretty standard clause, even in retail positions at your local RadioShack. Carmack continued to work for ZeniMax for a few months even after he was hired on at Oculus. Carmack claimed that ZeniMax owned the code he wrote, but they didn't have a claim on the technology.
- 2011-2012: Carmack "conducted research to address technological issues associated with virtual reality" while under ZeniMax employ.
- April 2012: Carmack befriends Palmer Luckey, a college student who had supposedly created a rudimentary VR prototype. ZeniMax claims Luckey's headset was far from polished: lacking a head mount, virtual reality software, integrated motion sensors, and various "critical features." ZeniMax and Carmack then add improvements to the headset, creating a workable prototype.
- June 2012: ZeniMax shows off the new prototype to Luckey at E3 under a non-disclosure agreement. Shortly after, Luckey founds Oculus and allegedly uses ZeniMax's hardware and software tech to create the Rift.
- July 2012: ZeniMax claims Luckey asked for help promoting the Oculus Rift, while using ZeniMax's intellectual property (Doom 3: BFG Edition) in its Kickstarter pitch video.
- September 2012: The Oculus Rift Headset is funded through Kickstarter for $2 million, well above their $250k goal.
- August 2013: Carmack becomes Oculus's Chief Technology Officer. ZeniMax alleged that at this time he returned to ZeniMax and took a customized VR tool, in addition to a USB drive containing intellectual property and trade secrets.
- November 2013: Carmack officially resigns from id Software, claiming he was not able to work on VR as much as he wanted.
- February 2014: Five senior employees of ZeniMax resign simultaneously and join Oculus.
- March 2014: Facebook acquires Oculus for $2 billion.
- May 2014: ZeniMax files the lawsuit against Oculus.
- June 2014: Oculus files a response, claiming the suit is just an attempt to take advantage of the sale to #Facebook.
- July/August 2015: A judge denies motions by Facebook, Luckey, and Oculus to dismiss the lawsuit.
- August 2016: ZeniMax amends its complaint, accusing John Carmack of flat out stealing technology from ZeniMax.
- October 2016: An expert examines Carmack's computer, finding evidence that sworn statements from Oculus' defense are inaccurate. A judge orders Oculus to release redacted communications about Carmack's hard drive and for Samsung to provide details to ZeniMax about its VR work with Oculus.
- January 2017: The trial of ZeniMax vs Oculus starts.
Luckey attempted to get the lawsuit dismissed in 2015, claiming that the NDA wasn't enforceable because he didn't receive anything in return for keeping his mouth shut. Since NDAs don't work that way, which anyone should know, the judge immediately dismissed the motion. ZeniMax was willing to work with Oculus for the sake of technology, so Luckey also tried to claim that they didn't take steps to keep their trade secrets very secret. The judge also dismissed that too.
The first discovery period was in February 2016 while the preliminary date for the trial was set for August 2016. Forensic experts looked over Carmack's computer and found evidence going against Oculus' sworn statements. The trial was finally put in motion in January 2017 and began last week with opening arguments.
The Trial Starts
Mark Zuckerburg, Facebook's founder and CEO, testified in court today, the first day of testimonies. He admitted that Facebook only had a single weekend to do their due diligence before they bought Oculus for a hefty $2 billion, along with $700 million for retention of key people and $300 million for milestone earnouts.
ZeniMax's attorney focused on Facebook's lack of due diligence before they purchased Oculus. Supposedly Zuckerburg jumped on the deal because he was so surprised at how far along the technology was. It's not hard to imagine him getting excited about nerdy things, but rashness regarding legal matters is no joke.
ZeniMax sent a letter to Facebook two weeks after the deal, expressing their legal concerns. Zuckerburg claimed that he had never heard of the company before the letter and that his attorneys wouldn't have bothered to go over the claim because it wasn't credible. However, they only had three days to look into the matter so their assertions of credibility are questionable.
The trial proceeded with ZeniMax's lawyer harping on Zuckerburg about the lack of diligence regarding the Oculus sale. Reporters live-tweeted until the lunch break, when the judge eventually chastised them and banned it. The case is expected to go on for three weeks.