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Zenimax reportedly refused to invest in Carmack's work, but was more than willing to take credit for it

Featuring a host of celebrity investors that include Cal Ripken, Jr, Jerry Bruckheimer, and Robert S. Trump (Donald Trump's brother), ZeniMax Media Inc. is America's largest privately held gaming company.  The two jewels of the ZeniMax crown are Bethesda Software -- known for its Fallout and Elder Scrolls series -- and id Software -- makers of Doom and Quake. id Software was acquired by ZeniMax in 2009.
 
I. ZeniMax and Oculus VR CTO John Carmack's Feud Grows With Theft Accusations
 
id Software's iconic former CEO and cofounder John Carmack, a legend in the world of 3D graphics, announced last August that he was joining Oculus VR as its Chief Technology Officer.  Mr. Carmack at that point had already played a personal role tinkering with duct-taped prototypes of the virtual reality (VR) headset and mentoring its young founder, Palmer Luckey, a student at the University of Southern California Institute for Creative Technologies (USC-ICT).
 
But if Mr. Carmack's decision to formally split his time between id Software and Oculus VR seemed surprising, the real shocker came in November, when Mr. Carmack formally resigned from id Software, the company he built and was intimately tied to for over two decades.

John Carmack
John Carmack shows off an early version of Oculus Rift, held together by duct tape.
[Image Source: Eurogamer] 

In the wake of that decision -- and social networking giant Facebook Inc.'s (FB) decision to purchase Oculus VR for $2B USD -- ZeniMax has come out guns blazing accusing its former top hand of "stealing" the Oculus tech.  In an interview with The Wall Street Journal, which it would later repeat elsewhere, ZeniMax stated:

ZeniMax confirms it recently sent formal notice of its legal rights to Oculus concerning its ownership of key technology used by Oculus to develop and market the Oculus Rift. ZeniMax’s technology may not be licensed, transferred or sold without ZeniMax Media’s approval.

ZeniMax’s intellectual property rights arise by reason of extensive VR research and development works done over a number of years by John Carmack while a ZeniMax employee, and others. ZeniMax provided necessary VR technology and other valuable assistance to Palmer Luckey and other Oculus employees in 2012 and 2013 to make the Oculus Rift a viable VR product, superior to other VR market offerings.

The proprietary technology and know-how Mr. Carmack developed when he was a ZeniMax employee, and used by Oculus, are owned by ZeniMax. Well before the Facebook transaction was announced, Mr. Luckey acknowledged in writing ZeniMax’s legal ownership of this intellectual property. It was further agreed that Mr. Luckey would not disclose this technology to third persons without approval.

Oculus has used and exploited ZeniMax’s technology and intellectual property without authorization, compensation or credit to ZeniMax. ZeniMax and Oculus previously attempted to reach an agreement whereby ZeniMax would be compensated for its intellectual property through equity ownership in Oculus but were unable to reach a satisfactory resolution. ZeniMax believes it is necessary to address these matters now and will take the necessary action to protect its interests.

The commentary isn't terribly surprising as clearly their was an abundance of hurt feelings and misunderstandings in the wake of Mr. Carmack's decision to pick his new company over his old one.  And one can't discount the potential influence of ZeniMax CEO, co-founder, and co-owner Robert A. Altman -- a former lawyer, who once was indicted on eight felony charges for reportedly lying to government officials to try to boost a bank he was working for (the charges were later dropped).
 
II. Facebook and Oculus VR Respond
 
But as formidable as ZeniMax and its ex-lawyer chief may be, it's tussling with a company that's seen its fair share of intellectual property (IP) theft accusations and walked away victorious.
  
Oculus VR

Facebook, which has more money and lawyers than ZeniMax, released a statement along with Oculus VR, commenting on the claims:

It's unfortunate, but when there's this type of transaction, people come out of the woodwork with ridiculous and absurd claims. We intend to vigorously defend Oculus and its investors to the fullest extent.  We are disappointed but not surprised by Zenimax's actions and we will prove that all of its claims are false.

A key reason that John permanently left Zenimax in August of 2013 was that Zenimax prevented John from working on VR, and stopped investing in VR games across the company.

There is not a line of Zenimax code or any of its technology in any Oculus products.  Zenimax did not pursue claims against Oculus for IP or technology, Zenimax has never contributed any IP or technology to Oculus, and only after the Facebook deal was announced has Zenimax now made these claims through its lawyers.

Zenimax canceled VR support for Doom 3 BFG when Oculus refused Zenimax's demands for a non-dilutable equity stake in Oculus.  Zenimax has never identified any 'stolen' code or technology [in Oculus's open source].

A crucial factor in the case may be the U.S.'s recent switch from first to invent (FTI) to first inventor to file (FITF), courtesy of the America Invents Act of 2011.  With that switch the key question becomes who filed for what patents.  If ZeniMax was first, it indeed has Facebook and Oculus in a bind.  But by the sound of it Facebook believes that it filed first to protect Mr. Carmack's VR IP.

Oculus VR

Despite the ugliness of the spat Mr. Carmack seems to have no regrets, relishing his return to a role of tinkerer and developer.  He told Engadget in a recent interview, "In many ways I feel more like me than I have in many years."

Sources: Engadget, WSJ





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