What began as a spate of accusations and word wars has now morphed into a full-blown lawsuit. Game developer ZeniMax Media has filed a federal case in the district of Northern Texas against Oculus VR, alleging the virtual reality headset maker of "misappropriating trade secrets."
The lawsuit stems from the fact that Oculus chief technology officer and former ZeniMax employee John Carmack aided Oculus founder Palmer Luckey in developing the Rift virtual reality headset while he was still employed by ZeniMax.
As per the 45-page lawsuit [pdf], ZeniMax says that Carmack signed an employment agreement that ordered the celebrated game developer to disclose to ZeniMax all inventions related to the company's business, and that all copyrightable works developed by Carmack during the time of his employment will be owned by ZeniMax. ZeniMax also says that Luckey signed a non-disclosure agreement with ZeniMax in 2012 to protect the game developer's proprietary rights.
"ZeniMax sent Luckey additional proprietary information on an ongoing basis. Luckey used ZeniMax's VR Technology that he acquired through the FTP site and otherwise to create and promote the modified Rift headset," writes ZeniMax in its lawsuit. "Around the same time, ZeniMax also sent cables and customized sensors to Luckey and disclosed - pursuant to the Non-Disclosure Agreement - additional hardware design improvements regarding optics calibration and sensor mounting. Throughout June 2012, Luckey repeatedly emailed ZeniMax seeking and receiving access to ZeniMax's accumulated proprietary information, trade secrets, and know-how."
In April 2012, Carmack took to online forums to solicit prototypes for a VR headset. Luckey, who was then a student at the University of Southern California and ZeniMax claims "lacked the technical expertise to create a viable display" for the headset, sent Carmack the primitive headset he was working on. Carmack modified the headset "based upon years of prior research in ZeniMax" and demonstrated his development at the Electronic Entertainment Expo gaming trade show in June 2012. The VR headset, which earned rave reviews from gaming experts and journalists, gave Luckey the momentum to establish Oculus VR.
The startup went on to become a Kickstarter blockbuster, raising $2.4 million in its crowdfunding campaign. Shortly afterwards, Oculus raised another $16 million and Carmack, whose contract with ZeniMax expired in July 2013, joined Oculus as CTO. In December last year, Oculus received $75 million in funding from Netscape founder Marc Andreesen. Oculus' string of financial successes culminated in a $2.2 billion acquisition by Facebook.
ZeniMax also claims that Oculus initially offered a 3% stake in the company for $1.2 million, which would have ballooned to $60 million after the Facebook buyout, but ZeniMax refused and offered a counter-proposal. Oculus says ZeniMax's offer was "so far out of the ballpark, we're left wondering if there's any hope."
Last month, Oculus denied trade secret misappropriation allegations and accused ZeniMax of making "ridiculous and absurd claims." Carmack himself took to Twitter to say that none of his work involved patented technology and he did not use any code owned by ZeniMax to develop Rift.
"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," says Oculus in a statement.
While Oculus has not yet released any consumer product into the market, its Rift developer kits are gaining traction in developer circles and the VR headset itself is poised to make a splash not only in gaming but in all forms of media, including TV, film, music and live performances. Following Facebook's acquisition, we can also expect Rift to be able to provide unprecedented social experiences in virtual reality.
