It's All Fun And Virtual Reality Until Oculus Gets Bought For $2 Billion -- Then ZeniMax Wants Its Cut

from the fun-of-employment-agreements dept

Fri, May 2nd 2014 3:35pm — Mike Masnick

It's always funny to see the greedy folks reveal themselves after a company sells out for many millions or billions of dollars. The latest is ZeniMax, the owners of Id Software, and the former employer of John Carmack. Carmack, of course, is the famous video gaming guru who left ZeniMax last year to go full time at Oculus. Prior to that, Carmack had tried to work at both companies, but after ZeniMax no longer wanted him working on virtual reality, Carmack reasonably decided to go full time at Oculus. While not exactly common, it's also not unheard of for "rockstar" tech folks to work at and/or run multiple companies at the same time -- think Steve Jobs at Pixar/Apple and Jack Dorsey at Twitter/Square. Usually there aren't any real "ownership" issues to deal with, but it appears that once Facebook ponied up $2 billion for Oculus, ZeniMax suddenly decided that Carmack was using its proprietary technology to make the Oculus Rift work. Of course, if that were true, you would have thought that ZeniMax would have raised the issue long ago, rather than waiting until many months after they knew what Carmack was working on at Oculus. This just stinks of a company that did nothing, now looking to cash in on a big deal it had nothing at all to do with.

Carmack, in response to this has noted that no work he did has been patented, and while ZeniMax may own his code, they can't claim to own the concept of virtual reality. This may not come down to patents (or copyright). It may come down to the terms of Carmack's employment agreement. As lots of developers know, it's not uncommon for some companies to have ridiculously overbroad employment agreements that try to claim the rights to basically any concept you ever thought about while you work for them.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: deals, john carmack, oculus rift, ownership, virtual reality
Companies: facebook, id software, oculus, zenimax

21 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

AricTheRed (profile), 2 May 2014 @ 3:44pm

So there is this guy I used to know...
A prior acquaintance of mine was one of the founders of Transworld magazine, and when he left the mag after AOL Time Warner bought it, (He worked for them for quite a while after the acquisition) they tried to lay claim to every photograph he ever took while he worked for the magazine. Family photos, birthday parties, sunsets, his large format fine art photos, EVERYTHING.

He levied the greatest insult I'd ever heard against the bearer of the questionable overreach.

"You guys are sooo LAME!"

It was all in the delivery.
[ link to this | view in thread ]
Anonymous Coward, 2 May 2014 @ 3:47pm

looking for a settlement
I'm sure their plan here is to end up in court, and go for a settlement that earns some cash.

In either case, it's a sign of desperation, and I think we'll see them disappear in a few years.
[ link to this | view in thread ]
Anonymous Anonymous Coward, 2 May 2014 @ 3:58pm

Discovery
Sounds to me like this is about discovery. In order to prove the position layed out in the CNet article, they are gonna need to see some code. Might they be looking for what ever it is they missed, and Carmack found?
[ link to this | view in thread ]
Anonymous Coward, 2 May 2014 @ 3:58pm

and this is in California no less
Non-compete agreements don't hold up too well in California
[ link to this | view in thread ]
Anonymous Coward, 2 May 2014 @ 4:01pm

What I think is particularly egregious...
... is that they claim to have ownership of his knowhow - I.E., they're saying "hey, you work for us, so we own everything you've ever learned ever while working for us. Doesn't that seem just absolutely insane?

Here's hoping that, should this thing go to court, Carmack uses some of that $2b to knock out this catch-all employment contracts once and for all.
[ link to this | view in thread ]
Anonymous Coward, 2 May 2014 @ 4:05pm

John Carmack, tried to get ZeniMax to work on VR game projects with Oculus VR, before leaving ZeniMax. ZeniMax apparently had to interest in VR, probably viewing it as a 'gimmick'.

Now they see VR taking off big time, obviously kicking themselves in the ass for not taking Carmack's advice, and decide to sue him out of greed and spite.

I was really excited about Oculus Rift. Really, really excited. Then Palmer Lucky sold-out his company to Facebook. After that, I don't want to support Oculus VR anymore.

I'd be lying if I said that I don't think Oculus Rift will be the best VR headset device on the market, but I can't support Facebook in good conscience.

Besides, now that Mark Zuckerberg has control of Oculus' future. It's only a matter of time before he takes the company in a completely different direction from it's original Kickstarter mission. Which used to be about a hardcore VR gaming experience.
[ link to this | view in thread ]
Tom Landry (profile), 2 May 2014 @ 4:20pm

Re:
Carmack made a statement about why the FB buyout wasn't deserving of the negative hysteria. While he has a vested interest in the deal, Carmack tends to be honest to a fault about this kind of stuff (corporate actions and involvements in projects he's attached to) so I wouldn't totally write off the Occulus VR completely.
[ link to this | view in thread ]
Anonymous Anonymous Coward, 2 May 2014 @ 4:39pm

Re: Re:
The issue for me is not Occulus, it is Facebook. I have their URL blocked in my HOST file, both linux and Windows. That is how serious I am about disliking Facebook. Other social media sites just get banned via NoScript. That is how much I hate social media. Some websites that ask for a Facebook login lose me. Any website that requires a Facebook login loses me period (I have seen a few brick and mortar businesses where if you want to do business with them online you can only find them on Facebook, they loose me at both locations). I made the mistake of joining one or two (like LinkedIn), early on. Now I cannot get rid of them, and they generate a lot of spam.

Opt in, not opt out.
[ link to this | view in thread ]
Anonymous Coward, 2 May 2014 @ 4:43pm

Re:
Considering that for me occulus VR is now as dead as it can possibly be and considering my eternal hate for facebook, I hope Zenimax can squeeze enough money out of this monstrosity that they will eternally regret ever touching occulus rift.

seriously, fuck facebook!
[ link to this | view in thread ]
Bri (profile), 2 May 2014 @ 5:06pm

When I saw this on another site I wondered when you guys would pick it up. It really is unfortunate for the people at ZeniMax who are not involved with this because I feel like this will give the company a bad rep. I've been in contact with a lot of the people who work at ZeniMax for the TESO alpha and beta sessions, and they genuinely wanted to make good products focused on what the customers want and will enjoy. This just makes the company sound like another big bad trying to crush the little guys who are trying to give the public what they want. Shame on you, ZeniMax legal department!
[ link to this | view in thread ]
That One Guy (profile), 2 May 2014 @ 5:34pm

Re:
It that's true, and it really is a case of lawyers slipping the leash(one of these days you'd think companies would realize that you need to keep your lawyers on a short leash, as they can destroy a company's reputation overnight if left unchecked), then I'd say they need to a) call off the hounds, and b) make a nice public statement about how they're more interested in seeing the burgeoning technology grow, this was all a mistake, and the demands have been retracted, otherwise, true or not, they are going to have that 'big bad trying to crush the little guys' image, and it's likely to stay.
[ link to this | view in thread ]
Anonymous Coward, 2 May 2014 @ 5:43pm

Re: Re:
they are taking on *facebook*. There is no goodwill left for occulus VR.
[ link to this | view in thread ]
David, 2 May 2014 @ 8:27pm

Some do think they own your thoughts
"As lots of developers know, it's not uncommon for some companies to have ridiculously overbroad employment agreements that try to claim the rights to basically any concept you ever thought about while you work for them."

Google "Evan Brown Alcatel".
[ link to this | view in thread ]
Robert, 2 May 2014 @ 10:29pm

Re:
I doubt they see VR kicking off big time. All their lawyers see to 2 billion dollars up for grabs and how many hundreds of thousands of dollars they can spend in order to pick up millions of dollars, not of future revenue but that buy out price.
Nothing more and nothing less.
[ link to this | view in thread ]
Megahurtz, 3 May 2014 @ 6:16am

An important tidbit that was left out of the writeup here is that this dispute has apparently been going on since 2012. Oculus offered Zenimax some sort of ownership equity to settle things, but Zenimax apparently didn't find that sufficient. Zenimax also claim that they have something signed by Palmer Luckey acknowledging that Oculus infringed on some Zenimax tech with the Oculus, although this may just be the NDA that was drafted between them and not some sort of admission of guilt, as I initially thought.

This is all covered in the cnet article linked, but I thought it should be mentioned in the story here as it adds more depth than just having this being Zenimax seeing the Facebook buyout dollar signs and running to find the nearest lawyer. I think Mike is at least partially off base with the following quote:

"but it appears that once Facebook ponied up $2 billion for Oculus, ZeniMax suddenly decided that Carmack was using its proprietary technology to make the Oculus Rift work. Of course, if that were true, you would have thought that ZeniMax would have raised the issue long ago, rather than waiting until many months after they knew what Carmack was working on at Oculus. This just stinks of a company that did nothing, now looking to cash in on a big deal it had nothing at all to do with. "
[ link to this | view in thread ]
John Fenderson (profile), 3 May 2014 @ 1:49pm

Re: Re:
He did, but his statement didn't address my chief issue, which is much the same as Anonymous Anonymous Coward: I don't want to have any relationship with Facebook, including providing them profit through their ownership of OR.
[ link to this | view in thread ]
JoeCool (profile), 4 May 2014 @ 10:58am

Employee contracts
Employee contracts that say everything you touch belongs to the company are part of ENTRY LEVEL contracts offered to new programmers/engineers who haven't run into this before. Any programmer/engineer worth their salt has this clause removed at the first contract renegotiation, or they move on to another company. That's what I did, and I'm certainly no Carmack. There's not a chance in hell Carmack had a contract with such a clause in it.
[ link to this | view in thread ]
John Fenderson (profile), 5 May 2014 @ 8:27am

Re: Employee contracts
This. Every employment contract that has been put before me in my career has included language to the effect of "the company owns everything you do during your employment, regardless of whether your do it on company time or using company equipment."

I accepted the terms the first time, but each time after that I objected to them and they were removed. In one case (a computer game company, not surprisingly), they wouldn't remove the terms but instead allowed me to attach a list of specific types of software that were excluded from them.
[ link to this | view in thread ]
Anonymous Coward, 5 May 2014 @ 10:18am

Re: Re:
If you're friends with HIM you can't be friends with ME

- Gradeschooler
[ link to this | view in thread ]
John Fenderson (profile), 5 May 2014 @ 10:46am

Re: Re: Re:
Oh, please. This isn't about friendship, this is about not supporting companies that you disagree with. I don't support Facebook because I disagree with their corporate policies. Since Facebook owns OR, it becomes impossible to support OR without supporting Facebook as a side-effect. Therefore I can't support OR.

There's nothing grade school about it.
[ link to this | view in thread ]
Pragmatic, 6 May 2014 @ 9:05am

Re: Re: Re:
Using shaming to enforce using Facebook? Are you really that desperate, Zuck?
[ link to this | view in thread ]