ZeniMax Sues Oculus VR Over Stolen Trade Secrets

| 21 May 2014 19:50
John Carmack

ZeniMax Media and Id Software have filed a lawsuit against Oculus VR and founder Palmer Luckey for "illegally misappropriating" its virtual reality trade secrets.

ZeniMax Media announced today that it has begun legal action against Oculus Rift maker Oculus VR, claiming illegal misappropriation of its virtual reality trade secrets, copyright and trademark infringement, breach of contract, unjust enrichment and unfair competition. The two companies appeared headed for trouble earlier this month when ZeniMax, the parent company of Bethesda Softworks, Id Software and various other studios, accused Oculus VR of making unauthorized use of its proprietary technology; Oculus denied the claim outright, stating among other things, "There is not a line of Zenimax code or any of its technology in any Oculus products."

ZeniMax claimed that while Luckey has "held himself out to the public as the visionary developer of virtual reality technology," it is actually responsible for developing the technology behind the Oculus VR headset. It also said that attempts to reach an amicable resolution to the dispute had been unsuccessful, which ultimately forced it to file suit.

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

The lawsuit says ZeniMax has been researching VR technology as far back as the 1990s, and had actually created prototype VR software for early Elder Scrolls games. It also references statements made by John Carmack, formerly of Id Software, about work he'd done on the Rift prototype while he was still an employee of ZeniMax, as well as email exchanges between him and Luckey, and various other key figures at ZeniMax and Oculus, regarding the headset. And it turns out that trouble between the two companies has actually been brewing since the summer of 2012, when Oculus VR used footage from Doom 3: BFG Edition in its Kickstarter promo video, despite ZeniMax refusing to grant it permission to do so.

Interestingly, the lawsuit has been filed jointly by ZeniMax Media and Id Software, and while John Carmack featured prominently in initial reports of the dispute, he is not specifically named as a defendant.

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Adraeus:

Strazdas:
If you want me to read your posts in another thread it would be wise to link to said posts (unless they are quoting me, in which case i already get a notice in inbox).

I linked the thread in my first response to Pyrian.

Ah, not being Pyrian i did not saw it. But after glancing at it i remmeber reading it back when it was posted. I just did not associate it with you because usually i care about contents of the post and not the name attached to it.

Oculus has responded on several sites:

"The lawsuit filed by ZeniMax has no merit whatsoever. As we have previously said, ZeniMax did not contribute to any Oculus technology. Oculus will defend these claims vigorously."

It may very well be that in the last year or so they have updated every individual component of the Rift to become something unique from its prototype. If Carmack really did re-write the code this year as Zenimax implies then the code could now be unique too.

But none of that really helps Oculus at all. All you need is the clear paper trail that even Carmack and Luckey provided to show that the prototype and the first dev kit we all almost the sole creation of Zenimax and then there's a full merit to show Zenimax's role in all this as legitimate.

I sure hope that Oculus hasn't been destroying documents that would impact the investigation. That could lead to some actual jail time for people.

Strazdas:
If you want me to read your posts in another thread it would be wise to link to said posts (unless they are quoting me, in which case i already get a notice in inbox).

I linked the thread in my first response to Pyrian.

tangoprime:

Strazdas:
They shouldnt be. What i coded on my own time should not belong to the company, only what i did while im working for them.

Unless you signed a contract saying that it does, which as several people have noted, is pretty standard in the software industry. I have friends who work for JP Morgan Chase doing application development, and their employment contract has that language as well, basically anything they code while they're employed there belongs to the employer. I had that language in my contract when I worked for Microprose.

which is why i said "Should" and not "is". Such contracts would not be enforcable in my country anyway though. Worker rights would superseed that part of contract.

Lightknight:

Frankly... if this is all true, then we actually owe a significant amount of gratitude to Zenimax. snip

Thank you for reading through the document and linking it. Indeed this looks like Zenimax has a case here and quite a significant one. i totally did not expect that.

Adraeus:

No, the system has not failed. Read my posts in the other thread. While the assignment of inventions agreement can be abused, which is why some jurisdictions limit the enforceability of the agreement, the agreement provides employers with an essential legal recourse. In the event that contractors or employees subvert their relationship with their employer, and therefore their access to the employer's equipment, supplies, facilities, or trade secret information, for their own ends, the employer can pursue a remedy.

If you want me to read your posts in another thread it would be wise to link to said posts (unless they are quoting me, in which case i already get a notice in inbox).
Its fair use in such cases but the law should not allow the abuse as seen in such contracts like pointed by Tangoprime.

If it was Carmack that went so far as to re do the code after the fact, oh my.

Those idiots should compensate Zenimax, yesterday, it would be wise for Carmack consider returning to his old office.

iniudan:

Adraeus:

Vivi22:
Hell, I'm not even sure they'd be enforceable since what you make in your own home on your own time is not their business. If they're not paying you to make it, they don't own it.

They are enforceable.

Not in every state. It's considered void in California for example.

No, assignment of inventions agreements are valid and enforceable in California. There are merely some limitations.

See California Labor Code Section 2870 for the legal text.

  • If the employee used the employer's equipment, supplies, facilities, or trade secret information, the agreement is enforceable.
  • If the employee's inventions "relate, at the time of conception or reduction to practice of the invention, to the employer's business, or actual or demonstrably anticipated research or development of the employer," the agreement is enforceable, regardless of whether the employee used the the employer's equipment, supplies, facilities, or trade secret information.
  • If the employee's invention is the result of any work performed by the employee for the employer (also called "work for hire"), regardless of whether the employee used the the employer's equipment, supplies, facilities, or trade secret information, the agreement is enforceable.

ZeniMax reprinted some of Carmack's employment agreement whose language indicates the enforceability of the agreement.

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Strazdas:
then your legal system has failed. They shouldnt be. What i coded on my own time should not belong to the company, only what i did while im working for them.

No, the system has not failed. Read my posts in the other thread. While the assignment of inventions agreement can be abused, which is why some jurisdictions limit the enforceability of the agreement, the agreement provides employers with an essential legal recourse. In the event that contractors or employees subvert their relationship with their employer, and therefore their access to the employer's equipment, supplies, facilities, or trade secret information, for their own ends, the employer can pursue a remedy.

Signa:
Thanks for that outlining. I never would have bothered to get that information myself.

I went into it thinking that everything would be vague and unproven. But then they suddenly got very specific and included direct quotes from major interviews that I didn't think anything more of at the time they were mentioned. This is really a surprise to me. I believed in the Oculus team hook line and sinker.

Lightknight:
Ok, I've read the court document:

http://cdn0.vox-cdn.com/assets/4490157/1-main.pdf

It... it actually looks like Zenimax has a case. From the paper it looks like Carmack and other Zenimax employees actually helped him build the original prototype by providing both hardware and software expertise they were using at Zenimax at the time. Before Zenimax, the paper claims that the rift lacked a headmount, VR-specific Software, integrated motion sensors, and other critical features and capabilities that Zenimax employees gave them. But they actually managed to get a non-disclosure at this point, apparently.

With the non-disclosure in hand, Zenimax then arranged demonstrations of the Rift prototype in the Bethesda booth at E3. Zenimax also says they designed the SDK and directed its development. After the success of E3, Luckey continued to rely on Zenimax employees for support and assistance and Zenimax began discussing appropriate compensation for their role in the hardware and software development as well as E3 marketing that played a vital role in the product's existence. They then began to get the cold shoulder as new investors swooped in and started buying the business from Luckey.

The document also confirms that Carmack signed away rights to anything he made that related to the Zenimax research and development during his employment which would have included any code he wrote for the Rift since Bethesda has VR research on hand from the 90's. They even include a quote from Carmack in that E3 conference referencing his VR research with Zenimax and Id Software. Zenimax had been developing/researching headset VR displays since 2011 with the number one problem being the latency which they'd been specifically working on since.

There's another quote from Carmack stating that Luckey sent him the optics and he added in his own hardware from the five headmounts Carmack already had in his office before getting Luckey's prototype. Carmack lists adding sensors, head strap, software and "stuff". They specifically came up with the low latency and specifically recommended the high-field of view.

Once Luckey started trying to commercialize the product, only then did Zenimax begin trying to discuss compensation.

There's even evidence printed to suggest that Carmack quickly worked to rewrite code after Zenimax's lawyers sent them letters this year. That his "line of code" comment is only true because he recently made it so in response to the allegations.

Frankly... if this is all true, then we actually owe a significant amount of gratitude to Zenimax. This is incredible. That they gave him all the technology at the start without demanding compensation is remarkable and generous even, but they did rightfully get a nondisclosure signed by Luckey and specifically reserved rights to their technology as protection for them letting Luckey go forward with the demo. I mean, if this is true the Luckey had very little to do with the product at all and this really is more Zenimax product than not. This paper indicates that he took all kinds of Zenimax hardware and software and ran it all the way to the bank. Oculus/Facebook's response will have to be epic to discredit any of this. They have backed up everything with direct quotes and have built a solid case. I feel a little guilty for being so strongly on team Oculus' side before the evidence really cropped up. I'm just glad I stated several times to wait on more information.

Thanks for that outlining. I never would have bothered to get that information myself.

ike42:

Lightknight:

ike42:
When is someone in the federal government going to crack down on the eastern district of Texas. The courts there have become shills for the trademark/patent trolls. There needs to be some serious investigation into the judges that keep this legislation slanted in their favor and then refuse to move the courts to a different venue.

Read my post immediately above yours. This isn't patent trolling. Zenimax basically put together the original prototype and then Luckey ran off with the finished product. He had even signed a non-disclosure that should have protected Zenimax from him doing this.

Look, I was all against Zenimax before the document but this is a severe breach of meaningful patents and technology that really is Zenimax's. I can't believe it either.

I still don't believe what they're saying, you initially said to wait for evidence, but then you flipped as soon as the official filing came out. If you want to wait for the evidence then you shouldn't have made a decision based on a one-sided testimony. Granted, if everything they said is true then things are far from black and white. However, I am very sceptical of their case based on where they filed it and the timing of their claims. Oculus was around for a while before Zenimax made any claims. When they kicksktarted it Zenimax didn't come out and make any claims. Only once they sold to facebook (which was a terrible thing in my opinion), did Zenimax claim to own the technology. Now put yourself in the shoes of a major corporation. If you had contributed significantly to the development of an almost universally loved device (I don't care for it, made me motion sick), would you not immediately cash in on the publicity by saying openly how it couldn't have been done without you? It's as simple as a short press release right after the successful kickstarter. Now I know this doesn't prove anything, but it does call into question the motivation of this major corporation. The patent system laid out in the US constitution was specifically targeted at spurring inovation and giving inventors incentive. This case is about the opposite, so no matter the outcome Zenimax is wrong in my opinion.

I think you mean I flipped the moment they produced an actual timeline and evidence. Which is exactly what I said to do and if we're going to be semantically correct, being convinced by new evidence isn't considered flipping.

If I say to wait for evidence and then get more evidence am I then supposed to wait further? I mean, quote after quote and they even produced the non-disclosure. The evidence is immense. I said we should wait for evidence until I found the actual source document.

Frankly, i don't even know why you're taking Oculus' side in this matter. Zenimax actually did start discussing compensation with Luckey. The moment he started gearing up to start the kickstarter is when Zenimax began broaching the subject. Luckey just apparently ignored that side of things, stringing Zenimax along until it was too late.

Look, I've followed the development of the Rift very closely. I remember the quotes they used and it all makes a whole lot of sense now. If even one component of Zenimax's claim is true then they deserve compensation for contributing DIRECTLY to this product. It isn't even just patent infringement. It's direct appropriation of work.

Companies will try to pursue other companies in court for money. What they don't do is cite fabricated evidence. That will land them in jail.

Lightknight:

ike42:
When is someone in the federal government going to crack down on the eastern district of Texas. The courts there have become shills for the trademark/patent trolls. There needs to be some serious investigation into the judges that keep this legislation slanted in their favor and then refuse to move the courts to a different venue.

Read my post immediately above yours. This isn't patent trolling. Zenimax basically put together the original prototype and then Luckey ran off with the finished product. He had even signed a non-disclosure that should have protected Zenimax from him doing this.

Look, I was all against Zenimax before the document but this is a severe breach of meaningful patents and technology that really is Zenimax's. I can't believe it either.

I still don't believe what they're saying, you initially said to wait for evidence, but then you flipped as soon as the official filing came out. If you want to wait for the evidence then you shouldn't have made a decision based on a one-sided testimony. Granted, if everything they said is true then things are far from black and white. However, I am very sceptical of their case based on where they filed it and the timing of their claims. Oculus was around for a while before Zenimax made any claims. When they kicksktarted it Zenimax didn't come out and make any claims. Only once they sold to facebook (which was a terrible thing in my opinion), did Zenimax claim to own the technology. Now put yourself in the shoes of a major corporation. If you had contributed significantly to the development of an almost universally loved device (I don't care for it, made me motion sick), would you not immediately cash in on the publicity by saying openly how it couldn't have been done without you? It's as simple as a short press release right after the successful kickstarter. Now I know this doesn't prove anything, but it does call into question the motivation of this major corporation. The patent system laid out in the US constitution was specifically targeted at spurring inovation and giving inventors incentive. This case is about the opposite, so no matter the outcome Zenimax is wrong in my opinion.

ike42:
When is someone in the federal government going to crack down on the eastern district of Texas. The courts there have become shills for the trademark/patent trolls. There needs to be some serious investigation into the judges that keep this legislation slanted in their favor and then refuse to move the courts to a different venue.

Read my post immediately above yours. This isn't patent trolling. Zenimax basically put together the original prototype and then Luckey ran off with the finished product. He had even signed a non-disclosure that should have protected Zenimax from him doing this.

Look, I was all against Zenimax before the document but this is a severe breach of meaningful patents and technology that really is Zenimax's. I can't believe it either.

When is someone in the federal government going to crack down on the eastern district of Texas. The courts there have become shills for the trademark/patent trolls. There needs to be some serious investigation into the judges that keep this legislation slanted in their favor and then refuse to move the courts to a different venue.

Ok, I've read the court document:

http://cdn0.vox-cdn.com/assets/4490157/1-main.pdf

It... it actually looks like Zenimax has a case. From the paper it looks like Carmack and other Zenimax employees actually helped him build the original prototype by providing both hardware and software expertise they were using at Zenimax at the time. Before Zenimax, the paper claims that the rift lacked a headmount, VR-specific Software, integrated motion sensors, and other critical features and capabilities that Zenimax employees gave them. But they actually managed to get a non-disclosure at this point, apparently.

With the non-disclosure in hand, Zenimax then arranged demonstrations of the Rift prototype in the Bethesda booth at E3. Zenimax also says they designed the SDK and directed its development. After the success of E3, Luckey continued to rely on Zenimax employees for support and assistance and Zenimax began discussing appropriate compensation for their role in the hardware and software development as well as E3 marketing that played a vital role in the product's existence. They then began to get the cold shoulder as new investors swooped in and started buying the business from Luckey.

The document also confirms that Carmack signed away rights to anything he made that related to the Zenimax research and development during his employment which would have included any code he wrote for the Rift since Bethesda has VR research on hand from the 90's. They even include a quote from Carmack in that E3 conference referencing his VR research with Zenimax and Id Software. Zenimax had been developing/researching headset VR displays since 2011 with the number one problem being the latency which they'd been specifically working on since.

There's another quote from Carmack stating that Luckey sent him the optics and he added in his own hardware from the five headmounts Carmack already had in his office before getting Luckey's prototype. Carmack lists adding sensors, head strap, software and "stuff". They specifically came up with the low latency and specifically recommended the high-field of view.

Once Luckey started trying to commercialize the product, only then did Zenimax begin trying to discuss compensation.

There's even evidence printed to suggest that Carmack quickly worked to rewrite code after Zenimax's lawyers sent them letters this year. That his "line of code" comment is only true because he recently made it so in response to the allegations.

Frankly... if this is all true, then we actually owe a significant amount of gratitude to Zenimax. This is incredible. That they gave him all the technology at the start without demanding compensation is remarkable and generous even, but they did rightfully get a nondisclosure signed by Luckey and specifically reserved rights to their technology as protection for them letting Luckey go forward with the demo. I mean, if this is true the Luckey had very little to do with the product at all and this really is more Zenimax product than not. This paper indicates that he took all kinds of Zenimax hardware and software and ran it all the way to the bank. Oculus/Facebook's response will have to be epic to discredit any of this. They have backed up everything with direct quotes and have built a solid case. I feel a little guilty for being so strongly on team Oculus' side before the evidence really cropped up. I'm just glad I stated several times to wait on more information.

Vivi22:

Kumagawa Misogi:
Standard employment contract in computer software industry.

'Anything to do with software you create while you work for us belongs to us'.

If this goes to court Zenimax will win and probably be found to own everything to do with Oculus Rift.

That's why Facebook will just give them lots of money to go away.

Yeah, no. There's no way that John Carmack signed a contract saying every bit of software he worked on while id was owned by Zenimax belonged to them. Things he developed in his office for id projects? Sure. Stuff he did on his own time to help out a completely separate company? No way in hell. A man who's that prolific a coder and software engineer does not sign a contract like that, and those sorts of contracts are absolutely not standard in the industry. Hell, I'm not even sure they'd be enforceable since what you make in your own home on your own time is not their business. If they're not paying you to make it, they don't own it.

Carmack is a genius when it comes to programming. But he's not the guy that cares much about fine print in contracts. And yes, that type of contract is very standard in the software industry and the epeople who sign it just deal with it.

Wait they are suing them now? After they have Facebook backing?

Well props for ZeniMax for playing fair and not bullying the little guys XD

Strazdas:
They shouldnt be. What i coded on my own time should not belong to the company, only what i did while im working for them.

Unless you signed a contract saying that it does, which as several people have noted, is pretty standard in the software industry. I have friends who work for JP Morgan Chase doing application development, and their employment contract has that language as well, basically anything they code while they're employed there belongs to the employer. I had that language in my contract when I worked for Microprose.

I'll be interesting to see how all of this plays out. Zenimax may honestly have a claim to this. In which case, they should be entitled to some to the pie that the investors were already paid. The net result for the Rift should be a net null though as long as Zenimax's intention is money and not stopping the rift from using their technology.

What's interesting is that Carmack says he uses zero lines of code. What I actually take this to mean is that they do use concepts he figured out at Zenimax but he has recoded it from scratch. The code doesn't have to be identical for the mechanics behind it to have been appropriated. So this is actually feasible.

iniudan:

Adraeus:

Vivi22:
Hell, I'm not even sure they'd be enforceable since what you make in your own home on your own time is not their business. If they're not paying you to make it, they don't own it.

They are enforceable.

Not in every state. It's considered void in California for example.

It really depends on what court jurisdiction the case is tried in. Just because Carmack and Oculus are in California doesn't mean that it will be tried using a state court system.

But you're certainly correct. It isn't black and white as to whether or not it's enforceable.

Adraeus:

Vivi22:
Hell, I'm not even sure they'd be enforceable since what you make in your own home on your own time is not their business. If they're not paying you to make it, they don't own it.

They are enforceable.

Not in every state. It's considered void in California for example.

I am willing to bet Facebook ends up throwing money at Zenimax and telling them to go away. That is usually how these copyrights disputes end.

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