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Zenimax v Oculus now heading to jury. Zenimax asking for $4 billion in damages

Par Score

Member
Really hoping Facebook, Oculus, and especially Luckey are left holding the worlds most expensive L after this wraps up.

Carmack's behaviour here is another shining example of incredibly intelligent people doing incredibly dumb stuff.
 

Pif

Banned
Oculus was a flubbed company all the way along.

- Not thinking through the legal ramifications of hiring Carmack and using his Zenimax work.
- Sitting on Crescent Bay and just letting competitors roll out
- Their several appalling presentations/press conferences.
- Not developing motion controllers early on, shipping with Xbox controller (worst controller for VR of the current gen)
- Sudden walled garden and attempt to lock out PC 'hacks'
- Botched launch, insane price, real shipping problems, disgraceful treatment of markets outside Japan

and thats all before Luckey went cuckoo. I'm glad the future of VR is in Valve and Sony's hands, because Oculus screwed the pooch.

I also want to see Oculus burn.
 

Alx

Member
Well, looks like the Oculus acquisition could be a very bad deal for Facebook. I wonder if they can ask Palmer Luckey for some of their money back ? Probably not. That's what happens when you discuss a deal over one week-end. :p
 
Well, looks like the Oculus acquisition could be a very bad deal for Facebook. I wonder if they can ask Palmer Luckey for some of their money back ? Probably not. That's what happens when you discuss a deal over one week-end. :p

I find that shit so insane. I know Zuckerberg has money but c'mon, you need more of a plan that that. Has there even been any particular benefit to either companies from their collaboration at this point?
 

fred

Member
Did you guys actually click on article to read before commenting



That sounds pretty direct and straight foward to me.

Yup. It seems that the majority of people posting here want Oculus to lose 'because Facebook and Palmer Luckey' and haven't paid any attention to the court case at all. The claims of Zenimax have been pretty bizarre tbh.

I'm also surprised that the defence didn't call Mark Bolas to the stand to refute the claims that Palmer didn't have the ability to create a VR HMD.
 

Elandyll

Banned
How much did Zuckerberg pay for Oculus - was it a couple of billion? Got to be regretting that decision if they end up with another bill of $4 billion (ish), and on top of that the Rift headsets don't seem to be the big success many had excepted.



Probably thinking damage to Oculus = benefit to PSVR.
I would think it would (potentially) benefit Vive, and possibly that open source VR solution (Razr?) before PSVR though...
 
I don't feel bad for Luckey or Facebook, but I do feel bad for VR. Zenimax being the one getting the money is also extra shitty.

I think this is the sentiment I'm feeling. One shitty company screws another shitty company, and a burgeoning technology is imperiled. Shame all around.
 

Joni

Member
Could Facebook demand their money back from Luckey and other Oculus executives when they lose this lawsuit considering this would be basically their fraudulent actions?
 

Durante

Member
I really don't see how VR is at all imperiled regardless of the result.

Facebook can pay whatever damages are awarded, and even if they couldn't, if Oculus were to vanish from the face of the planet tomorrow a few games might be canceled but overall it wouldn't be a big deal for VR.
 
Yeah while FB can pay this, it's not exactly chump change.

In the unlikely scenario that Zenimax wins the 4 billion, that's more than half of their operating income for 2015.

I'd be pretty pissed at Oculus if I were them.

They knew this before purchasing Oculus. I believe this was started prior to the purchase so it's not as if Facebook is thinking they were duped.

It's funny to see people rooting for one or the other corp in this instance though.
 

ja30278

Member
I'm not a lawyer, but it seems that there are some distinctions here that people in this thread are missing.

1. Did Carmack violate his employment contract, by 'stealing' work he created while at Zenimax. Lots of software engineers have contracts that stipulate that any work done while employed belongs to the company. I don't agree with this, but it is what it is.

2. Separate from 1. If he _did_ take code, was it used by Oculus to create the Rift, and therefore make money using Zenimax's intellectual property.

To me, it seems that you have to prove 2 in order to justify damages. If you only prove 1, then Carmack may have violated his employment contract, but that doesn't mean that Zenimax is entitled to damages.

As with other threads on this topic, a lot of folks seem to wish ill on Carmack and Palmer based on a difference in politics.
 
I really don't see how VR is at all imperiled regardless of the result.

Facebook can pay whatever damages are awarded, and even if they couldn't, if Oculus were to vanish from the face of the planet tomorrow a few games might be canceled but overall it wouldn't be a big deal for VR.

Except for the people whose tech and games libraries were affected. Whether you like Oculus or not, burning 30% of early VR adopters would make the market slower. Potential buyers would second guess whether they are investing in the future tech or some fad.

No major publishers are making serious investments in VR games (except for platform holders). As far as I know Oculus was investing and granting a lot of money for VR devs, so who would pick up the slack?

VR platforms need each other. Sony's success means that major publishers have the access to the console crowd with VR titles. Vive's success opens the VR market for the biggest platform. Oculus success guarantees further incentives and investments into VR titles.

You can argue that VR can continue without Oculus, but the closure of either PSVR/Vive/OR would affect the entire VR market negatively.
 

AColdDay

Member
Best Case Scenario: Zenimax wins but Palmer Luckey has to pay the damages and then those billions are put into a trust to fund Obsidian making Fallout spinoffs for the foreseeable future.
 

tsab

Member
That has basically been Carmack's defence - he did a whole bunch of R&D on Zenimax's dime, they weren't interested in bringing it to market, so he thought he could up and leave to another company because it was 'his'.

I think it's highly likely Zenimax will win this.
If that's the case (haven't been up to date with this case) I gotta side with Zenimax on this one.I can't see this ending well for Occulus (and or Carmack).


"Whoever wins... We lose"

-Alien v Predator
 
Trump's little brother needs to be paid!
CVwS4JiWIAAHl_z.jpg


Remember when Zenimax's CEO accepted a plea deal when settling a civil suit with the federal reserve which banned him from practising banking for life? Great folks on both sides!

Make Elder Scrolls great again! "We're gonna build a wall to keep all the Dragonborn out..."
 

Stranya

Member
I'm not a lawyer, but it seems that there are some distinctions here that people in this thread are missing.

1. Did Carmack violate his employment contract, by 'stealing' work he created while at Zenimax. Lots of software engineers have contracts that stipulate that any work done while employed belongs to the company. I don't agree with this, but it is what it is.

2. Separate from 1. If he _did_ take code, was it used by Oculus to create the Rift, and therefore make money using Zenimax's intellectual property.

To me, it seems that you have to prove 2 in order to justify damages. If you only prove 1, then Carmack may have violated his employment contract, but that doesn't mean that Zenimax is entitled to damages.

As with other threads on this topic, a lot of folks seem to wish ill on Carmack and Palmer based on a difference in politics.
I am an employment lawyer (UK though, not US), and you are correct to my understanding.

The first issue you highlight is key. What were the terms of his employment with Zenimax, and what were the terms (if any) of the work he did for Oculus while still employed at the former. Based on my experience with such contracts, it's overwhelmingly likely that his Zenimax contract expressly provided that all IP developed by him while in its employ belonged to Zenimax.

Next question is whether or not any terms (whether express or implied) of Carmack's work for Oculus modified that position in any way. I strongly suspect that such terms did not expressly state that any VR work belonged to Oculus, because, if that were true, (1) the case would never have got this far; and (2) Carmack and Oculus would not need to rely on the frankly shaky argument that Oculus owned the IP because Zenimax had no plans to commercially exploit it. In UK law, this argument would laughed out of court, but it is possible the potion is different in the US (though I suspect not).

It will be crucial whether or not there were any oral representations made by anyone with sufficient authority at Zenimax to Carmack and/or Oculus about the ownership of any VR IP developed during the cross-over period. Although, as above, I suspect there is no written evidence, it is possible that a statement may have been made about this. E.g. Carmack asks a Zenimax director (or whoever) whether VR IP is his, and the director says "Sure, that's fine". A hypothetical statement such as this would be arguably sufficient to alter the terms of any express IP clauses in the Zenimax contract. Whether or not that happened is unknown to us, but I mention it as an example of what seems like a clear contractual situation can, when all relevant circumstances are considered carefully, become more complex.

Your second point is also key, and is basically the principle of causation and loss. Damages for breach of contract, generally speaking, can be recovered only where there is a loss attributable to the breach in question. If Oculus did not use the IP alleged to have been stolen (and haven't sold it etc) then Zenimax have suffered no loss - unless Zenimax can prove that their commercial plans suffered adversely as a result of not having the IP. I don't know how punitive damages work in the US, but I would be surprised if you could recover those with no loss.

Again, I'm a UK lawyer so very happy to be corrected on any US law points!

Interesting case. My overall gut feeling, without having seen the evidence (lol), is that, provided Zenimax can show that Oculus used/benefitted from the IP, they will have a good chance, given that it is extremely likely that his contract would have said that Zenimax owned IP created while in its employ.
 

nampad

Member
I don't know if it's good or not if Zenimax wins.

Pro:
-Some people over at Oculus seem to be assholes.
-The walled garden approach of Oculus sucks.

Contra:
-Competition in the PC VR market is good, I don't think the other headsets can really compete with Valve/HTC.
-Oculus is financing content, even if it is exclusive, it means more VR content.
 

Wallach

Member
I don't think Zenimax is going to get paid anything of consequence, honestly. Feels like they would have been better settling earlier.
 
I am an employment lawyer (UK though, not US), and you are correct to my understanding.

The first issue you highlight is key. What were the terms of his employment with Zenimax, and what were the terms (if any) of the work he did for Oculus while still employed at the former. Based on my experience with such contracts, it's overwhelmingly likely that his Zenimax contract expressly provided that all IP developed by him while in its employ belonged to Zenimax.
Well, it depends on the company and whether the content was developed on company time. I'm a game developer in the US who also writes my own non-competing games at home, and of the 5 companies I've worked for, only two of them had statements in the employment contract that would affect work done outside of the office (and I negotiated that statement out of the second one when hired).

Also, some states in the US have laws affecting this - California for example has a law on the books that generally prohibits employers, on public policy grounds, from making claims to IP generated by employees working on their own time and using their own resources. However, that law doesn't apply if the IP is in the employer's line of business or anticipated line of business, and in that case the question comes to whether Virtual Reality hardware would be considered in Zenimax's anticipated line of business. From reading this thread it seems that at least part of Oculus' defense is that no, Zenimax had no plans on ever going into VR.
 

Stranya

Member
Well, it depends on the company and whether the content was developed on company time. I'm a game developer in the US who also writes my own non-competing games at home, and of the 5 companies I've worked for, only two of them had statements in the employment contract that would affect work done outside of the office (and I negotiated that statement out of the second one when hired).

Also, some states in the US have laws affecting this - California for example has a law on the books that generally prohibits employers, on public policy grounds, from making claims to IP generated by employees working on their own time and using their own resources. However, that law doesn't apply if the IP is in the employer's line of business or anticipated line of business, and in that case the question comes to whether Virtual Reality hardware would be considered in Zenimax's anticipated line of business. From reading this thread it seems that at least part of Oculus' defense is that no, Zenimax had no plans on ever going into VR.
Thanks for the info!
 
I don't think you understand.
It's all about Carmack.

Under his contract with Zenimax, Everything he was developping during his employment time was theirs.

People in that kind of position don't stop being employees when they're not on site, or outside of the 9-5 hours.

And then, "They were not gonna use it anyway" is a terrible defense...

This doesnt matter if Oculus didnt use any of his ideas.. They can keep what he worked on but they arent entitled to things Oculus was already doing.
 
How long till we find out who wins?

Depends how long the jury takes to deliberate. If they come back with a verdict quickly, it'll likely be in Oculus' favor. If they take a while, it's probably because they found in favor of Zenimax and are trying to determine the exact amount of damages.

They've been deliberating for over a day now, but the trial was pretty long, and thus deliberations will likely be long, so we likely won't know anything until next week (unless the jury half-asses it and wants to get done with it ASAP).
 

pkScary

Member
Guys: it doesn't have to be written in your employment contract that anything you create during work is owned by your employer. The employer has claim to your work if you created something during work hours or used work equipment. Any patent attorney will tell you that regardless of your employment contract, be sure to keep your individual work separate from your employer from the beginning in order to prevent this type of situation from happening.
 

pkScary

Member
How though? Oculus losing does absolutely nothing for PSVR. That's like saying if Sony ended PSVR it would somehow be a benefit to GearVR.

in fact, if Oculus loses, PSVR is hurt, as any damage to the VR ecosystem at this stage is detrimental all players involved. VR is not yet at the point where it is a zero sum game (where competitors can only achieve sales by cannibalizing each other's business).
 

Mega

Banned
Oculus was a flubbed company all the way along.

- Not thinking through the legal ramifications of hiring Carmack and using his Zenimax work.
- Sitting on Crescent Bay and just letting competitors roll out
- Their several appalling presentations/press conferences.
- Not developing motion controllers early on, shipping with Xbox controller (worst controller for VR of the current gen)
- Sudden walled garden and attempt to lock out PC 'hacks'
- Botched launch, insane price, real shipping problems, disgraceful treatment of markets outside America

and thats all before Luckey went cuckoo. I'm glad the future of VR is in Valve and Sony's hands, because Oculus screwed the pooch.

Agree with all this. No one needs or wants Oculus now with better options overall.
 
I only have 4 thoughts on this:

1 - I hope the VR industry dont suffer and die
2 - Hope Carmack (i believe he don´t even give it a thought) dont suffer from this
3 - Valve hires Cramack! (not that anything there needs fixing actually) to help Joe and the others geniuses involved in the SteamVR and Vive
4 - That the money from the case is invested in a better Fallout and TES.
 

pkScary

Member
Guys: if you want VR to have a bright future, Oculus should win this case. Even though many of your criticisms against Oculus are valid, HTC/Valve need a strong competitor nipping at their heels in order to drive innovation forward.

What would happen to SteamVR without Oculus? Look no further than Intel's lack of innovation, stagnating performance, and chronic delays ever since AMD has stopped mounting strong competition. Competition is inherently beneficial for consumers. Even if you hate Oculus and/or Palmer Luckey, for whatever reason, you should be rooting for them here - for your own benefit.
 

fred

Member
I only have 4 thoughts on this:

1 - I hope the VR industry dont suffer and die
2 - Hope Carmack (i believe he don´t even give it a thought) dont suffer from this
3 - Valve hires Cramack! (not that anything there needs fixing actually) to help Joe and the others geniuses involved in the SteamVR and Vive
4 - That the money from the case is invested in a better Fallout and TES.

1) Even if Oculus lose and Facebook have to fork out the entire $4bn (they may lose but there's a good chance that they'll win anyway imo, and it's VERY doubtful that they'll have to fork out the maximum amount of cash in this cash grab, again, imo) it won't affect the running of Oculus in the slightest. $4bn isn't a great deal of money for Facebook (which in itself is a bit frightening tbh) and Zenimax haven't demanded that Oculus stop selling the Rift or that Oculus stop producing content for the Rift or that Oculus stop selling Oculus Rift content for the Rift. Like I've said, it's a blatant cash grab.

2) This won't affect Carmack in any way. The man is a legend in the industry and won't have any problem getting a job ANYWHERE he wants.

3) I doubt that Carmack will leave Oculus after this, even if Zenimax win the case

4) Unfortunately a good chunk of whatever settlement they get should they win will go to their lawyers plus the upper management of Zenimax. You'll see some going towards development for various projects but don't expect them put put too much towards that because, well, lawyers and upper management (who also happen to be lawyers I think..? I could be wrong but I'm sure I saw someone on this thread mentioning that).



What I'm not sure about is what happens if Zenimax loses this case and Oculus win..? Do the Oculus lawyers put in a counter claim for costs, compensation and damages..? No idea how these things work. If they do then that means that, in theory, Oculus can counter-claim $4bn, can't they..?

$4bn is what Zuckerberg probably has down the back of his sofa, but how much cash reserves does Zenimax have..?

As much as I LOVE the Elder Scrolls and Fallout franchises I hope that Zenimax lose this case, and lose a good chunk of change in the process. The Zenimax upper management had the chance to invest in this early on in terms of both time and money and they didn't bother. And now they're sore about it. They don't deserve a damned thing from Oculus, particularly considering the disrespect they showed Oculus during that now infamous meeting where they called the Oculus upper management staff 'kids' and demanded a ridiculous 15% stake.
 
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