Monday marked the start of a $2 billion Dallas trial that emerged from a lawsuit by video game startup ZeniMax, alleging that
-owned Oculus VR stole some of its key technology and promoted a fake origin story to hide the truth.
Facebook, which acquired Oculus for $2 billion in 2014, denies the claims, which could lead CEO Mark Zuckerberg to testify in court. In court documents, ZeniMax said Facebook purchased Oculus with “full awareness” that some of its core intellectual property, namely the software and hardware for Oculus’ virtual reality goggles, was stolen from ZeniMax by a “singularly experienced” employee, John Carmack, who left the video game startup to join Oculus in 2013. Facebook and Oculus executives included in the lawsuit deny wrongdoing and say ZeniMax’s story is false. ZeniMax is pursuing $2 billion in damages.
“We’re going to call many live witnesses, Mr. Zuckerberg included,” ZeniMax’s lawyer Tony Sammi said in a Jan. 3 interview, according to Bloomberg. Facebook and ZeniMax did not respond to a request for comment in time for publication.
ZeniMax, which is based in Rockville, Maryland and has designed video games such as Doom and Quake, said Carmack began communicating with Oculus founder Palmer Luckey in 2012, who at the time, was working on a virtual reality headset called Rift. In its lawsuit, ZeniMax called Luckey’s headset “a crude prototype that lacked a head mount, virtual-reality specific software, integrated motion sensors and other critical features and capabilities.” ZeniMax also claimed that throughout 2012, Oculus and Luckey lacked the required expertise to create a “viable virtual reality headset.” The startup said in filings that the technical know-how of Carmack, who allegedly copied thousands of documents from his ZeniMax computer, and other ZeniMax employees, provided hardware components and software that were crucial to Rift’s success.
ZeniMax also accused Luckey of broadly sharing a false story with press that Luckey invented the Rift technology in his parent’s garage. (Forbes reported in a 2015 cover story that Luckey's work on Oculus began in his family's garage. The story notes that Oculus denied claims by ZeniMax alleging that Carmack brought over proprietary information.)
In a December filing, Carmack said his employment agreement at ZeniMax permitted him to be involved with Oculus before he joined Luckey's startup full-time. Carmack also said ZeniMax, which turned down offers to be an early Oculus investor, allowed him to publicly disclose his virtual reality research. Carmack said he tried to push to create a similar headset at ZeniMax but that ZeniMax CEO Robert Altman rejected the idea. ZeniMax first filed for damages against Oculus and Luckey in May 2014. The case is ZeniMax Media Inc. v. Oculus VR Inc., 14-cv-01849, U.S. District Court, Northern District of Texas (Dallas), and the trial could last several weeks.
Oculus has been central to virtual reality efforts at Facebook, which has become a leader in the space, competing with the likes of Alphabet’s
. And virtual reality, one of Zuckerberg’s passions, could become a major revenue stream for Facebook in years to come. Facebook started shipping its $599 Rift headsets in March and started shipping its $199 touch controllers in December. In the fall, Oculus said it will commit an additional $250 million to fund a range of new content, such as games and entertainment, betting that "great software experiences" are the next frontier of VR, an addition to the $250 million Oculus has already pledged to content development. Also in October, Facebook said it is building a standalone, affordable VR headset that isn't tethered to a PC like the current Oculus Rift.