A video game company has filed a federal lawsuit in Northern Texas district court against virtual reality headset maker Oculus. ZeniMax Media is claiming that Oculus misappropriated intellectual property for use in its Rift virtual reality headset.
Facebook recently purchased Oculus for $2 billion.
In its lawsuit, ZeniMax claims that it directed the development of the Rift software and designed its specifications and functionality. The suit alleges that John Carmack and other ZeniMax employees provided Oculus with confidential programming code and technical expertise that transformed the Rift prototype and made it a commercially viable virtual reality headset.
ZeniMax is the parent company of Id Software, which Carmack cofounded.
Allegedly, Carmack first encountered the Rift prototype in April 2012, in a “primitive” form that was “little more than a display panel.” The suit argues that Oculus founder Palmer Luckey had not developed a viable display and did not have the technical expertise to do so. The lawsuit further alleges that Carmack and other ZeniMax employees made improvements to prevent distortions and reduce latency of the display’s reaction to movement.
Additionally, the plaintiff claims that ZeniMax employees worked on the Oculus Rift project under a nondisclosure agreement, but that talks broke down on the terms of a formal working relationship. Allegedly, Oculus offered to sell ZeniMax a three percent stake in the company for $1.2 million, but ZeniMax maintained that it should have a much larger equity stake. According to the lawsuit, an agreement was never reached, and Oculus never provided ZeniMax with any compensation. The lawsuit notes that John Carmack left ZeniMax to join Oculus as Chief Technology Officer in August 2013. Five other ZeniMax employees left for Oculus as well.
ZeniMax is seeking an unspecified amount in damages for misappropriation of trade secrets, breach of contract, copyright infringement, unjust enrichment, unfair competition, trademark infringement and false designation.
Gregory D. Jordan is a business lawyer and business litigation attorney in Austin, TX. To learn more, visit http://www.theaustintriallawyer.com or call 512-419-0684.