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Oculus refutes claims in Zenimax lawsuit and demands trial by jury
Oculus refutes claims in Zenimax lawsuit and demands trial by jury
June 25, 2014 | By Alex Wawro

Last month Zenimax Media filed suit against Oculus VR over intellectual property rights relating to the company's VR headset and its software, and today Oculus filed a response categorically denying Zenimax's allegations and requesting a trial by jury.

"Zenimax’s Complaint falsely claims ownership in Oculus VR technology in a transparent attempt to take advantage of the Oculus VR sale to Facebook," reads an opening line of the document, which goes on to assert that "there is not a line of Zenimax code or any of its technology in any Oculus VR product."

That's worth noting because Zenimax (and its subsidiary id Software) filed its lawsuit in federal court against Oculus VR founder Palmer Luckey and his company over what it claims to be unlawful exploitation and infringement of its intellectual property, including "trade secrets, copyrighted computer code, and technical know-how relating to virtual reality technology" that was developed by Zenimax.

Oculus goes on to refute pretty much all of Zenimax's claims, pointing out that the company often neglected to take action on any perceived issues until after it learned that Facebook acquired Oculus in March for roughly $2 billion in cash and stock.

For example, Oculus claims to have sent Zenimax a preview of the Oculus Rift source code at the end of 2012, before it ever made the code available to the public.

The company says Zenimax never claimed any portion of the code or, indeed, the Rift technology itself was based upon John Carmack's work while he was a Zenimax employee, despite having access to the code for a year and a half before Facebook bought Oculus.

We've taken the liberty of publishing the full legal response filed by Oculus below, in which Zenimax is portrayed as a company that is "seeking to correct for a massive missed opportunity through the assertion of meritless litigation."

Oculus' Response to Zenimax

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John Paduch
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Oh, boy.. this is getting real ugly, real fast. If Zenimax has enough evidence to show that they at least have a decent chance at winning a jury trial, then OVR will have to settle. Otherwise, they'll be risking a huge PR fiasco and huge legal/financial consequences. Then what will Oculus say, given the above statements?

Speaking of which, Luckey has the audacity to claim in print that he was a "gifted teenager" (which is indicative of a very arrogant, "mommy says I'm special" personality type, high-IQ or not) and pretty much solely responsible for OVR? That rubs me the wrong way, as does the claim that Zenimax only cared after the FB deal, when the timing of the suit has absolutely no relevance to the quality of the evidence in the case. Either Zenimax has compelling evidence, or they don't. Claiming that it's all about "dat FB money" may indeed be accurate, but it's not relevant to the case. It's a bitchy PR move to get the public on his side.

Sigh.. I only see this getting dirtier, as time goes on. We'll just have to wait and see what happens, I guess. If they go to trial, all bets are off, but if OVR agrees to settle, then we'll know that they're at least partially guilty of the charges.

Matt Robb
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"You have to admit that sitting on the (supposed) evidence (source code) and waiting until the entity in question is cash-flush before bringing the lawsuits is disingenuous at best."

At least that's what I wanted to say before I did the unthinkable and read through the preliminary statement of the claim and the answer in the response. Trial by jury really does seem to be the way to go. All of this will hinge on Carmack's testimony but, based on his previous public statements, I would expect Zenimax to lose.

So I guess my self-quote I started with still stands, heh.

Albert Thornton
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"based on his previous public statements, I would expect Zenimax to lose"

Really? Based on his Twitter statement, while working at Zenimax, that he was helping with the code? Or based on the pictures of him helping Luckey while staffing a Zenimax booth at E3?

Carmack comes from the shareware generation. The very real probability here is that he didn't even think about a conflict of interest. There may very well be a bunch of 'evidence' on both sides we're not seeing ... but what we ARE seeing is pretty damning to the Oculus side of the case.

Merc Hoffner
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If they don't argue that he's gifted, then Zenimax can argue that some random ordinary teenager couldn't possibly have innovated this stuff and must have co-opted the work of someone older and smarter. Being modest could literally be detrimental to Oculus's legal case.

Alan Barton
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@"it's all about dat FB money may indeed be accurate, but it's not relevant to the case"

Its totally relevant. If Oculus can show money is Zenimax's real motive, its a powerful chess move against Zenimax.

I'm not a lawyer but we can all see it means Zenimax are playing a very high stakes game here. If they win, they win very big indeed. But if they loose, they will be publicly shown to be attempting to mislead a court in trying to effectively steal control of a very valuable technology that isn't theirs to take. Misleading a court is illegal. If Oculus can show there is no basis to Zenimax's claims, and so show they are doing it for the money, they could get the case thrown out and counter claim massive damages and maybe even be able to push for criminal charges against Zenimax. So Zenimax have got themselves into a very big and very bad fight they really need to win, or they will loose badly.

I have no idea who will win, but whoever wins and looses, its going to be a very interesting high profile court room battle. Its looking like it'll be one hell of a Deathmatch court room battle! They should sell tickets!

Stephen Horn
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@"and maybe even be able to push for criminal charges against Zenimax"

I don't think the stakes are that high. Frankly, claims are made all the time based on nebulous concepts of infringement. In another context, at worst this would be akin to "patent trolling".

Either way, Zenimax has a prima facie claim: They have a former employee who worked for them, with an associated employment contract, and that employee also did work for Oculus VR. That work for OVR may belong to Zenimax. The discovery phase may bring out evidence that refutes this, but that's what the discovery phase is about. Zenimax's worst-case outcome is having to pay lawyer's fees.

OVR's worst-case outcome, however, is that their work is found to belong to Zenimax. I don't know exactly how bad that could be for OVR, but... it would be bad. I think if OVR is lucky, Zenimax only recovers monetary damages for the work, and possibly gains some kind of royalties.

Alan Barton
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@"I don't think the stakes are that high"

This isn't as simple as a patent case and it sounds already very acrimonious on both sides.

If Zenimax are right, and Oculus are wrong, then no problem and Zenimax earn a lot of money (and Facebook looses money they can easily pay).

If however Oculus are right and Zenimax are wrong, then wouldn't that then be showing some kind of Perjury? used in an attempt to not only lie to the court, but also, to use that to steal millions from another company, which would then also be fraud. That's what Oculus saying this is all about the Facebook money is implying. Thats why it is serious for Zenimax, if shown true?

So yes, the stakes could really be that high. Who is right, no idea?, but its definately high stakes.

So Zenimax now really have to win this one, but then they started the fight, so I guess they knew what they were getting themselves into.

Still its going to be interesting seeing who does win this.

Stephen Horn
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But "they only chose to pursue the question once we had deep pockets" isn't defrauding the court, even if Zenimax turns out to be wrong. It's a motive statement, not an accusation of fraud. I'm not a lawyer, but I've seen a number of filings. Trust me, this one is positively tame.

To be in the realm of "defrauding the court", Zenimax would have to be deliberately giving trade secrets to OVR employees and then claiming infringement. This isn't what OVR appears to be saying when it responds with "because ZeniMax never has contributed any intellectual property or technology to Oculus VR."

Even then, it takes an truly herculean effort to be accused of defrauding the court by anyone who actually matters. The only group I've ever heard of have this "honor" is Prenda Law, and they... well... really, it's probably best if you read the epic saga for yourself. Suffice to say that they did a *lot* of lying. To a *lot* of judges.

Alan Barton
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@"herculean effort"

I agree it would be a big effort to prove it, but it could be done and even if it was just used as an implied background chess piece, during any negotiations, any hint of a possible push to show fraud as a result of perjury, is a powerful way to apply pressure. At the very least it would force Zenimax to tread very carefully in how they try to win over Oculus. (It would be good even just as a psychological move, as it would heighten Zenimax's fear of saying the wrong thing in court to try to win, which would temper how hard they can push to win).

As a developer, I don't think morally what Carmack has done is wrong, but legally, I don't know enough of the facts. Contracts are almost always grossly one sided against the employee which is great for the employer but it grossly ignores that everyone in the games industry can't get a job unless they already know how to do that job and to do their job they are using their considerable experience to do the job. And Carmack's decades of experience is legendary. He literally is world class, one of the best in the world and he gained that experience long before Zenimax bought the company Carmack created.

Experience really matters. The process of writing a program is trivial compared with the years of effort to learn how to write the program well, and contracts fail to acknowledge that, because if an employee holds out and doesn't sign, the company will simply get in another programmer who will sign. So its a powerless choice. Sign and earn a living, or don't sign and stave. (Its deeply morally wrong and its a big reason why I think I need to have my own company as I'm frankly tired of earning companies millions where I never get to share in what I earn the ungrateful bosses, even though they couldn't create their company without people with the expertise to make the products they require for sale).

So anyway, it depends on the details of the Carmack's contract and what exactly Carmack provided Oculus, but even then, there is a big element of good faith involved whenever any company talks to another company about a common goal. Its just usually one side doesn't turn around and then try to use that against the other side, but it does show that no communication can be allowed in a company without written consent on both sides agreeing to discuss to work together. But if that was always forced to be in writing before they talk about anything, far fewer companies would talk which would greatly imped progress and the overall economy as a result, because may companies would be afraid to sign up and some wouldn't have the time or the money to sign up.

@"have this "honor" is Prenda Law"
Now you mention them, I think I've heard of Prenda Law back when they were in the news. They really sound like a class act. :)

I'm sure many of them at Prenda Law will go on to have a long successful career in politics. :)

Chris Mills
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Your reasoning about Carmack's experience and value are exactly why I believe a trial by jury is in Oculus' favor. Carmack has a long and distinguished history and aside from the facts of the case (proving the code), I think it will be debated as to where the line is between Zenimax and Carmack's ownership of his expertise.

Paul Tozour
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> Oculus refutes claims in Zenimax lawsuit and demands trial by jury

Bummer. I was really hoping for a trial by combat.

Benjy Davo
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Which Carmack would win as he's a judo expert.

Alan Barton
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They could fight it out in Quake 3. :)

Stream the battle online, they could earn a fortune. ;)