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Some suprising news is emerging from the court case brought by Zenimax against Occulus. They’ve expanded their case so its not just targeted at the arm of Facebook, but they’re also suing the founder of Oculus (Palmer Luckey), their CEO (Brendan Iribe) and former head of ID and former Zenimax employee John Carmack, accusing the latter of being a thief.

At this point you might be thinking what does that have to do with Bethesda? Well, you might remember back at the BE3 conference Fallout 4 VR and Doom VR were announced for the HTC Vive, rather than Oculus. This lawsuit is why - Bethesda is a Zenimax company. But that still make you wonder what Zenimax have to do with the development of the Oculus, and why they’re suing. Well, according to Zenimax’s submission, the short answer is: everything.

This is weighty, so we will be including a summary at the end.

(Note: This narrative is taken from the Zenimax submission to the court. We are making no judgement on its accuracy or the truth of the allegations. We will be reporting Oculus’s reponse when it becomes available)

The story according to Zenimax

The Beforetime

According to Zenimax, they’ve (through Bethesda Softworks and their other companies) been interested in Virtual Reality on and off since the 1990’s, and these early experiments have included optimisations such that Elder Scrolls games would work within VR (it doesn’t specifically say which game, but the timeline would suggest either Arena or Daggerfall). ID similarly had been playing around with VR in the early 90’s before Zenimax purchasing ID.

Zenimax got serious about VR in 2011, experimenting with what they called “off the shelf” headsets, but with problems such as latency (delay beween head movement and the image being updated), and had some demonstratable VR projects in March 2012.

In April 2012, Oculus came to the attention of John Carmack.

Lets Be Friends

In April 2012 Carmack requested a prototype and Palmer Luckey the inventor of the oculus, possibly seeing this as his big break, was more than happy to oblige.

The state of the Oculus at this time is described as embryonic, just a display (the Optics as Carmack would call it). No head mount, head tracking sensors or software. Zenimax contend it wasn’t a viable product, and Luckey didn’t have the skills to make it one.

Carmack took this prototype, and using some of Zenimax’s previous research and know-how improved the field of view, added tracking sensors and improved the latency of the device, and began preparing to demonstrate Doom 3 (BFG edition) at E3 2012. It was Zenimax’s work that took it from just a screen to a head tracking full VR experience, which could run a game. Expecting a lot of interest, a Non Disclosure agreement was signed in order to protect the work Zenimax had done.

Zenimax and ID’s support didn’t just go to technical assistance. They demonstrated the device to the press in their offices, and arranged for private E3 demonstrations to the press within Bethesda’s convention space. The Zenimax modified Rift would win the best hardware/peripheral game critic prize.

Zenimax continued to provide further data and code to oculus after E3 2012; they also sent customized sensors and information on how to use them. This was done without any agreement on how Oculus would compensate Zenimax for this.

Kickstarting and QuakeCon

In the leadup to Quakecon 2012 (August), the newly created Oculus company sought Zenimax’s endorsement in their kickstarter campaign, asked for the Oculus to be included in the keynote speech at Quakecon, and access to the Oculus Doom demo. Zenimax was continuing to improve the Oculus at this time, greatly improving the optics calibration and software from the tracking sensors, and provided these on request to Oculus.

Luckey also requested that Carmack appear in the kickstarter video, he declined this request and stressed to Luckey that Zenimax property couldn’t be shown, including tech demos of Rage. Luckey would later allegedly demonstrate this to potential backers (including co-defendant Brendan Iribe)

Zenimax then went further to decline permission for Doom footage to be included in the kickstarter. Luckey allegedly ignored this, including both footage from Doom 3, and logos and branding throughout the kickstarter without permission (We’ve tried to verify this, but the Wayback machine archive only goes back to 2014; No Doom logos appear on that entry or the current one).

Luckey also promised backers a copy of Doom 3 for backers over the $275 level. There are over 6 thousand backers who should qualify for such a copy, however, no arrangement was ever made with Zenimax for these to be supplied (This promise is still present on the current version of the kickstarter).

A constant theme in Zenimax’s complaint is showing a lack of technical ability on Oculus (and Luckey’s) end. They include this a request from Luckey for help in updating the software on the chips involved in the oculus, and helping select the right quality of cables. But most embarrasingly is an event at Quakecon, where Luckey could not make the Oculus work at all, and required John Carmack to come and make the device work. Luckey admitted publicly during Quakecon that he doesn’t do software at all.

All through this time, Zenimax are constantly requesting that some agreement be made about being paid for their expertese, but these fell on deaf ears.

After QuakeCon

Zenimax eventually relented and allowed Oculus to demonstrate the device with Doom 3, but only if permission was sought and obtained before each use. Oculus apparently broke this agreement, and later informed them of demonstrations at Gamescon, Unite and PAX Prime.

In September, Oculus began to discuss with Zenimax paying for the assistance received. In exchange for a right to use existing code, for more code to be developed, ten thousand copies of Doom 3, Oculus offered Zenimax 2% of Oculus - in three years time. An additional 3% was offered at a price of 1.2 Million.

This put a valuation of the company at $40 million. An Impressive valuation for a company with no product, and only $2.4 Million in revenue (from the kickstarter).

Zenimax turned this offer down, considering it very derisory considering the work they’ve done, but not before Oculus managed to upset them further.

Oculus sent Zenimax an Investor Prospectus, a document designed to help investors decide wither or not to invest in a product. Zenimax and ID were suprised to learn, from the prospectus that they’d endorsed the product, and that both Doom 3 and Skyrim would be made to work with the rift (to be clear, Zenimax say no such agreement existed). The prospectus also included Doom, Id and Zenimax logos without permission.

This allegation could be quite serious. Essentially Zenimax are suggesting that Oculus mislead potential investors about their endorsement, and that Skyrim and Doom would be coming to the device. Misleading Investors can potentially be a criminal offence.

Zenimax did continue negotiations, requesting a larger equity stake, but this was turned down by Oculus. This didn’t signal the end of negotiations, and oculus continued to seek further assistance, and eventually developed the Oculus SDK (software development kit), apparently to Zenimax’s specifications.

In December 2012, Oculus were no longer offering Zenimax a stake for the work completed so far, instead only offering investment opportunities. Another prospectus was sent to Zenimax, much like the original it allegedly contained misleading statements about Zenimax’s involvement and future games coming to the device. They were however still being asked for more technical expertese.

Starting in January 2013, Zenimax allege that Oculus started changing their story, downplaying the support from Zenimax and Carmack, but instead creating a narrative that Luckey had done all the work himself, as a garage inventor.

Is John Carmack a thief?

John Carmack

In the middle of 2013, seeking to shore up what Zenimax allege was a expertese deficit, Oculus began to recruit Zenimax staff, including John Carmack. He downgraded his role in Zenimax to Part time in June 2013 for the next three months. He Joined Oculus in August, and took thousands of Zenimax files with him to Oculus.

He then, whilst working for both companies, returned to Zenimax to take a tool that Zenimax had developed to make head mounted displays, and delivered this to Oculus.

If these allegations are true, its hard to characterise the above as anything less than intellectual property theft. When you work for a company, anything you create typically is owned by the company (unless agreed otherwise).

In Feburary 2014, Carmack recruited five of his former colleges to join him at Zenimax. This was apparently in direct breach of Carmack’s previous employment contract which prohibited him recruiting Zenimax employees for two years after leaving Zenimax.

In March, Facebook purchased Oculus for $2 Billion, and Zenimax took their dispute public after failing to get a positive response from Oculus. In response to media coverage of the dispute, Oculus denied any previous involvement from Zenimax.

The Complaint does go further showing that Zenimax’s work has continued to be used and exploited - including in Samsung’s VR Gear, and does include evidence of emails and other communications to back up their statements.

Summary of the claims

  • Oculus was just an attempt to make a 3D display before John Carmack discovered them
  • Oculus didn’t have the capability to turn this into a VR Headset product
  • Zenimax used their knowhow to essentually bring this to prototype stage where it could be used as a VR headset
  • Oculus used Zenimax’s code and know how, intially with permission (as long as it remained not disclosed), but later without permission
  • When John Carmack left Zenimax/ID, he illegally took Zenimax code and tools with him.
  • John Carmack broke his employment agreement with Zenimax by recruiting Zenimax employees.

Zenimax's complaint can be found here.

We’ll have more when Oculus respond to this version of the complaint.