ZeniMax vs. Facebook: They Want $4 Billion for the Code Allegedly Used for the Oculus Rift

Feb 01, 2017 10:50 AM EST | BC Tabotabo

The Oculus Rift headset paved the way for Oculus' success as a VR pioneer. Founder Palmer Luckey was able to make a very successful Kickstarter campaign in 2013 and they were later acquired by Facebook in 2014 for $2 billion in cash and stock. Now, ZeniMax is suing Facebook for $4 billion.

ZeniMax vs. Facebook. In 2014, ZeniMax filed a case against Oculus for stealing its intellectual property. The American media company alleges that Luckey is guilty of breaching the NDA by taking ZeniMax-owned information and disclosing it to Facebook. Luckey contends the NDA is unenforceable mainly because it was signed by Luckey in his personal capacity before Oculus was even founded.

Plaintiff ZeniMax asserts that Oculus is bound by the NDA because Oculus is a mere continuation of Luckey's prior work. Oculus and Facebook are responsible for misappropriating vital information from their company id Software for the development and success of Oculus Rift.

Defendant Carmack is one of the most accomplished and recognized video game programmers and virtual reality engineers in the industry today. He co-founded id Software (the plaintiff), which was later acquired by co-plaintiff ZeniMax. He was the lead programmer behind the following id video games: Wolfenstein 3D, Doom, Commander Keen, Quake, Rage, and their sequels.

In April 2012, while he was still id Software's Technical Director, Carmack discovered on an Internet forum that co-defendant Luckey had developed a prototype virtual reality headset called the "Rift." Carmack was already researching virtual reality at the time. The Technical Director contacted Luckey and started to modify, analyze, and evaluate the Rift prototype through research, tools, and software code owned by Id Software. He was able to modify the Oculus Rift to work with id Software's DOOM 3.

In May 2012, Luckey signed a nondisclosure agreement (NDA) with ZeniMax. By the summer of 2012, Oculus' success went viral when their Kickstarter campaign was able to raise $2.44 million in funding. Meanwhile, ZeniMax and Oculus continued to collaborate and negotiate but never could reach a deal.

The relationship between ZeniMax and Oculus turned sour by early 2013. Carmack's employment contract with id Software also ended in June 2013. Two months later, he joined Oculus as its Chief Technology Officer.

Facebook, under Mark Zuckerberg, now owns Oculus. ZeniMax attorney Sammi asked Zuckerberg, "So your plan for a $2-point-something-billion deal was to begin legal diligence on Friday, and sign the deal on Monday, over a weekend, right?" The Facebook CEO replied in the affirmative.

The case involves a lot of complex facts and issues relation to intellectual property. The jury's verdict could come as early as today. Do you think that the Oculus Rift stole the intellectual property of ZeniMax and Facebook should be held liable? Give your answers in the comments section below.

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