ZeniMax Threatens To Stop Oculus Rift's Sales

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ZeniMax Threatens To Stop Oculus Rift's Sales
February 4, 2017

ZeniMax Media says it will consider "seeking an injunction to restrain Oculus and Facebook from their ongoing use of computer code that the jury found infringed ZeniMax's copyrights" following a $500 million verdict against Oculus and its executives in a recent federal civil suit.

 

The threat comes in a statement provided to Ars late yesterday, in which ZeniMax cites what it calls "uncontested" evidence of "the theft by John Carmack of Rage source code and thousands of electronic files on a USB storage device which contained ZeniMax VR technology."

 

Further in the statement, ZeniMax reiterated its argument that Carmack's work at ZeniMax represented a "breakthrough" in VR technology and that Oculus' Palmer Luckey "could not code the software that was the key to solving the issues of VR" on his own. ZeniMax also argues in its statement that Oculus "in writing acknowledged getting critical source code from ZeniMax" and that Oculus programmers "admitted cutting and pasting ZeniMax code into the Oculus SDK."

 

But Joshua Rich, a partner at IP law firm McDonnell Boehnen Hulbert & Berghoff LLP who's been following the case closely, tells Ars that "given the jury verdict, ZeniMax doesn't seem [to be] in the best position" to obtain an injunction to stop Oculus headset sales or force a settlement.

 

While the jury determined that Oculus broke an NDA regarding information shared by ZeniMax and made inappropriate use of certain pieces of copyrighted code and trademarked logos, it rejected the much stronger claim that Oculus had stolen "trade secrets" from ZeniMax. Rich isn't involved with either party in the case, but he sees this result as a kind of "split the baby" decision that puts out "a lot of smoke without any clear underlying fire."

 

"Had they prevailed on the trade secrets claim, [ZeniMax] would have been in an extremely strong position for an injunction," Rich said. "Here, I think it's a relatively weak argument."

 

The best ZeniMax can really hope for, according to Rich, is to force Oculus to replace any underlying code that is "overly similar" to the code Oculus CEO Palmer Luckey received under NDA. This would probably require using a new programming team in a "clean room" environment, with no access to or knowledge of the code Carmack created.

 

"While that may not be the easiest job for Oculus to do, it's certainly easier than being completely pulled off the market, which requires you to start the process over again," Rich said. It's also very different from the position Oculus would be in under a trade secrets violation, where the company would be "prohibited from having any access to the information at all, not just specific expression."

 

Despite ZeniMax's maximal claims in its press release, Rich notes that the jury did not find Carmack actually used any of the code he had downloaded from ZeniMax at Oculus. Additionally, the jury did not find him personally liable for destroying evidence or other damages in the case. If anything, Rich said, the copyright damages that were awarded to ZeniMax could be considered a little high and could come down on appeal.

 

"While we regret we had to litigate in order to vindicate our rights, it was necessary to take a stand against companies that engage in illegal activity in their desire to get control of new, valuable technology," ZeniMax writes. "We will consider what further steps we need to take to ensure there will be no ongoing use of our misappropriated technology..."

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