$500 Million Awarded To ZeniMax In Lawsuit Over The Oculus Rift [UPDATE]

ZeniMax had been seeking far more.

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Now Playing: GS News Update: $500 Million Awarded To ZeniMax In Lawsuit Over The Oculus Rift

Update: ZeniMax has provided GameSpot with a comment on the outcome of the case in which it suggests it could try to inhibit or block sales of the Oculus Rift. You'll find more details at the bottom of this post along with a comment from Oculus.

ZeniMax Media has been awarded $500 million in its lawsuit against Oculus, which alleged that virtual reality technology it owns was stolen and used to develop the Oculus Rift.

ZeniMax, the parent company of video game developers such as Fallout maker Bethesda Softworks, had been seeking $2 billion in damages and $4 billion in punitive damages.

No Caption Provided

The trial began in January and saw high-profile appearances from the likes of Facebook founder Mark Zuckerberg. Following several days of deliberations, a jury today found Oculus liable of copyright and trademark infringement, as well as having breached a ZeniMax non-disclosure agreement. It was cleared on claims of trade secret theft and unfair competition.

Facebook was found not liable, while Oculus is responsible for $250 million of the half-billion owed to ZeniMax. The two companies weren't the only defendants; Oculus executives were also named and have been found liable. Former Oculus CEO Brendan Iribe (who recently stepped down for a different role) owes $150 million for trademark infringement, while founder Palmer Luckey owes $50 million.

A key issue in the case was whether work done by John Carmack--a former employee of ZeniMax-owned id Software--while at id enabled the creation of the Oculus Rift. ZeniMax, as you'd suspect, believes it did and argued that code used to power the Oculus features indications it stems from ZeniMax work.

According to Law360, Carmack and others claimed none of the code he worked on at ZeniMax was used in the version of the Rift that existed when Facebook bought Oculus. Carmack did admit to having copied emails (and source code) from his time at ZeniMax but claimed he wrote new code while at Oculus. ZeniMax also alleged that Palmer demoed VR games created by Carmack in the early days of Oculus's existence, and that these helped make it possible for the company to be founded.

The case dates back to 2014, when ZeniMax first filed suit. Last year, it added Carmack and Iribe to the list of defendants with more specific allegations. Oculus has consistently stated the case "has no merit."

Presumably there will be appeals to come, so this likely isn't the end of the matter.

In a statement shared with GameSpot, Oculus called attention to the areas in which it was found not liable. "The heart of this case was about whether Oculus stole ZeniMax's trade secrets, and the jury found decisively in our favor," a spokesperson said. "We're obviously disappointed by a few other aspects of today's verdict, but we are undeterred. Oculus products are built with Oculus technology. Our commitment to the long-term success of VR remains the same, and the entire team will continue the work they've done since day one--developing VR technology that will transform the way people interact and communicate. We look forward to filing our appeal and eventually putting this litigation behind us."

In its statement, ZeniMax said it was "pleased" with the outcome and that it could now seek an injunction to prevent continued use of code it owns.

"We will consider what further steps we need to take to ensure there will be no ongoing use of our misappropriated technology, including by seeking an injunction to restrain Oculus and Facebook from their ongoing use of computer code that the jury found infringed ZeniMax's copyrights," it said.

It also added the following, which we've broken up into list form for readability:

"The liability of Defendants was established by uncontradicted evidence presented by ZeniMax, including

  • (i) the breakthrough in VR technology occurred in March 2012 at id Software through the research efforts of our former employee John Carmack (work that ZeniMax owns) before we ever had contact with the other defendants
  • (ii) we shared this VR technology with the defendants under a non-disclosure agreement that expressly stated all the technology was owned by ZeniMax
  • (iii) the four founders of Oculus had no expertise or even backgrounds in VR--other than Palmer Luckey who could not code the software that was the key to solving the issues of VR
  • (iv) there was a documented stream of computer code and other technical assistance flowing from ZeniMax to Oculus over the next 6 months
  • (v) Oculus in writing acknowledged getting critical source code from ZeniMax
  • (vi) Carmack intentionally destroyed data on his computer after he got notice of this litigation and right after he researched on Google how to wipe a hard drive--and data on other Oculus computers and USB storage devices were similarly deleted (as determined by a court-appointed, independent expert in computer forensics)
  • (vii) when he quit id Software, Carmack admitted he secretly downloaded and stole over 10,000 documents from ZeniMax on a USB storage device, as well as the entire source code to Rage and the id tech 5 engine--which Carmack uploaded to his Oculus computer
  • (viii) Carmack filed an affidavit which the court's expert said was false in denying the destruction of evidence
  • (ix) Facebook's lawyers made representations to the court about those same Oculus computers which the court's expert said were inaccurate. Oculus' response in this case that it didn't use any code or other assistance it received from ZeniMax was not credible, and is contradicted by the testimony of Oculus programmers (who admitted cutting and pasting ZeniMax code into the Oculus SDK), as well as by expert testimony."

This story has been updated to note John Carmack was not found liable for any damages.

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Michael-Ibbett

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Edited By Michael-Ibbett

The HBO show about this is funnier

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choda_boy

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"(vii) when he quit id Software, Carmack admitted he secretly downloaded and stole over 10,000 documents from ZeniMax on a USB storage device, as well as the entire source code to Rage and the id tech 5 engine--which Carmack uploaded to his Oculus computer"

If true, he should be facing many years in prison. Others have been convicted for doing far less.

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guitarist1980

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Not surprising, I hope Palmer lucky has 50 million dollars hanging around lol... I mean there tech hasn't even taken off yet there is no way it has been very profitable at this point in time.

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tetrapod

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I recommend you guys go on his official FB page and read his explanation of what happened before making all sorts of crazy 'theories'.

'The Zenimax vs Oculus trial is over. I disagreed with their characterization, misdirection, and selective omissions. I never tried to hide or wipe any evidence, and all of my data is accounted for, contrary to some stories being spread.

Being sued sucks. For the most part, the process went as I expected.

The exception was the plaintiff’s expert that said Oculus’s implementations of the techniques at issue were “non-literally copied” from the source code I wrote while at Id Software.

This is just not true. The authors at Oculus never had access to the Id C++ VR code, only a tiny bit of plaintext shader code from the demo. I was genuinely interested in hearing how the paid expert would spin a web of code DNA between completely unrelated codebases.

Early on in his testimony, I wanted to stand up say “Sir! As a man of (computer) science, I challenge you to defend the efficacy of your methodology with data, including false positive and negative rates.” After he had said he was “Absolutely certain there was non-literal copying” in several cases, I just wanted to shout “You lie!”. By the end, after seven cases of “absolutely certain”, I was wondering if gangsters had kidnapped his grandchildren and were holding them for ransom.

If he had said “this supports a determination of”, or dozens of other possible phrases, then it would have fit in with everything else, but I am offended that a distinguished academic would say that his ad-hoc textual analysis makes him “absolutely certain” of anything. That isn’t the language of scientific inquiry.

The notion of non-literal copying is probably delicious to many lawyers, since a sufficient application of abstraction and filtering can show that just about everything is related. There are certainly some cases where it is true, such as when you translate a book into another language, but copyright explicitly does not apply to concepts or algorithms, so you can’t abstract very far from literal copying before comparing. As with many legal questions, there isn’t a bright clear line where you need to stop.

The analogy that the expert gave to the jury was that if someone wrote a book that was basically Harry Potter with the names changed, it would still be copyright infringement. I agree; that is the literary equivalent of changing the variable names when you copy source code. However, if you abstract Harry Potter up a notch or two, you get Campbell’s Hero’s Journey, which also maps well onto Star Wars and hundreds of other stories. These are not copyright infringement.

There are objective measures of code similarity that can be quoted, like the edit distance between abstract syntax trees, but here the expert hand identified the abstract steps that the code fragments were performing, made slides that nobody in the courtroom could actually read, filled with colored boxes outlining the purportedly analogous code in each case. In some cases, the abstractions he came up with were longer than the actual code they were supposed to be abstracting.

It was ridiculous. Even without being able to read the code on the slides, you could tell the steps varied widely in operation count, were often split up and in different order, and just looked different.

The following week, our side’s code expert basically just took the same slides their expert produced (the judge had to order them to be turned over) and blew each of them up across several slides so you could actually read them. I had hoped that would have demolished the credibility of the testimony, but I guess I overestimated the impact.

Notably, I wasn’t allowed to read the full expert report, only listen to him in trial, and even his expert testimony in trial is under seal, rather than in the public record. This is surely intentional -- if the code examples were released publicly, the internet would have viciously mocked the analysis. I still have a level of morbid curiosity about the several hundred-page report.

The expert witness circuit is surely tempting for many academics, since a distinguished expert can get paid $600+ an hour to prepare a weighty report that supports a lawyer’s case. I don’t have any issue with that, but testifying in court as an expert should be as much a part of your permanent public record as the journal papers you publish. In many cases, the consequences are significant. There should be a danger to your reputation if you are imprudent.'

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alaskancrab

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Edited By alaskancrab

What will be funny is when Facebook sues Luckey and Iribe!!! That will be the ultimate conclusion to all of this.

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Punisher2Twenty

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That's nice. If Zenimax gets that injunction stopping sale and support of the rift, they can buy back my rift,the touch and all the games I purchased for it. otherwise, Class action lawsuit time.

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yoda101280

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250 million for the Facebook half of it? Has Occulus even made 250 million since Facebook bought them out?

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BeantownSean

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Edited By BeantownSean

If you can't build it, steal it.

HTC Vive is looking really good at this point; I wouldn't support Oculus on principle alone.

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lionheartssj1

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lionheartssj1  Online

@beantownsean: I was off the Oculus train once Facebook got involved. I wouldn't trust them with a takeout order...probably sell it to their advertisers.

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DARREN636

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V.r.

it's a fad

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guitarist1980

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Edited By guitarist1980

@DARREN636: As of right now. I do think in the future when the tech becomes cheaper and better over all it might have a chance at commercial success. Right now its a total gimmick.

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dogpigfish

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Edited By dogpigfish

They now need to come to a royalty agreement and not impact the user community. It's unfair to adopters and will slow development. This is a great case study for employment in general and why not to steal when you leave, but these developers will no doubt continue with little regard.

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BeantownSean

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Edited By BeantownSean

@dogpigfish:

Though I doubt many saw this coming, early adoption is always risky.

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KimCheeWarriorX

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Edited By KimCheeWarriorX

last post about this and its about the future of vr without oculus. i know this doesnt necessary mean the end of oculus, but with all the bad publicity and payoffs, its getting off to a bad start. vr just seems like another tacky fad like kinect that will only last for a short time. from what ive seen in action, its not worth wearing a headset and shelling out the cash for a pc good enough to run it at decent performance. not saying vr will never go big, i just think its still too early.

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Atzenkiller

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Good to finally get some facts. What seems strange now though is that Zenimax is trying to get Oculus to stop production instead of just taking a percentage of all their profits. Why? I still haven't heard anything about a VR product so why try to get rid of a company that isn't even a competitor to them when they could make money from it instead? Without even lifting a finger.

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CyberEarth

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Edited By CyberEarth

@Atzenkiller: Why? Because Oculus / VR in general don't make profits. Why take a fraction of 0?

Better off to try and force a cease of production, which will result in a settlement. No company can afford to simply cease production.

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ArabrockermanX

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Seems Carmack wasn't used to no longer being his own boss... When id Software sold, Zenimax took ownership of all of its IPs(game engines etc).

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Vojtass

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Luky Luckey is not so luckey.

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Kadin_Kai

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I'm sure Facebook/Occulus can afford to pay this off. But i do partly feel sorry for John Carmack. He probably created a lot of the stuff he stole, so it would be hard for him to let go, but he should have just left it just to be safe.

What is Lukckey doing these days? Hasn't Hugo Barra taken his job?

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streamline

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@kadin_kai: Carmack should've known better. Even if he didn't use it or he created something new for Occulus, it sounds like he was a big nail in the coffin in this case. I feel worse for FB, even though I don't like the company's privacy practices.

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game4metoo

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Luckey is bad luck

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luert

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well thanks for the info, I must say carmack really had this coming, I'm no fan of zenimax but copyrights ought to be protected when it comes to it

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ASnakeNeverDies

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John Carmack had to go online to find out how to wipe a hard drive? There might be more to it, of course, but when you put it like that, it's just insane.

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lynxonicus

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Edited By lynxonicus

Well done zenimax, you've taken from a man that made you millions for years on end, realistically gaming didn't even come to a forefront beyond pixelated trash until carmack co created doom.

Yes rage flopped, but hey you as the publisher probably begged for it. I see you are a bit salty that you don't have that genius alongside you anymore, obviously you guys weren't trusting enough of his creativity. I remember prior to even getting my dev kit 1, watching carmack with cardboard VR he'd built at home, "used zenimax resources", what the fucking coding/engines he bloody partially invented himself and technically owns a portion of?

Take from palmer, i mean he's smart enough to cash in, and achieve this with wealth. but don't target a man so important to the gaming community, who has spent his life revolutionising and assisting us to where we are at now!

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aj87

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@lynxonicus: You look like a fanboy as much as it can be. The dude "intentionally destroyed data on his computer after he got notice of this litigation and right after he researched on Google how to wipe a hard drive--and data on other Oculus computers and USB storage devices were similarly deleted" and "admitted he secretly downloaded and stole over 10,000 documents from ZeniMax on a USB storage device, as well as the entire source code to Rage and the id tech 5 engine". If that doesnt scream GUILTY all over the place for you, nothing will.

Now, just because he did a great job towards the gaming community, he should just get away with? This is your only argument: "dude is a genius and improved games, the company is just salty (Really? "Salty"?) cause they dont have him anymore and came up with this ridiculous lawsuit."

Well sir, the fact that a jury decided in their favor says everything.

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lonewolf1044

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@lynxonicus: So you condone another company stealing and using that stolen data to boost their own company and against companies seeking monetary damages when the company in question is sued. I admire Carmack but he is not above the law and therefore must pay for what he done regardless of what he done for whomever. What he accomplished or revolutionized means squat in this case because he knew he stolen the data and that does not make him look any better than a thief for which he is.

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Tr4newreck

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oh pishposh you two respondents... this is not the morale tragedy of the century.... companies steal all the time, from each other, the govt, and especially from consumers. Most people cannot afford to fight every legal transgression that comes their way.

this is a fight over potential profits and corporate espionage essentially... not over starving orphans, keep it in perspective will ya and lose the hyperbolic justice talk

law and order exists only when you can afford it... what carmack did was wrong, but its not the greatest injustice in the world!

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bigcrusha

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Edited By bigcrusha

@tr4newreck: Literally NOBODY is saying that it is... Everyone with brains knows that companies steal from each other daily. The game of corporate law is to not get caught and not sign anything that's legally binding without covering your own ass. Corporations have the right to defend their own assets

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Tr4newreck

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@bigcrusha: literally!?...lol its being implied, the morale condemnation is clear and present, no more splitting hairs pls

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bigcrusha

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@tr4newreck: Nobody is splitting hairs or calling condemnation. The only implications they made is that "if you get caught red handed, don't expect empathy, you reap what you sew."

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lostn

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Bethesda Softworks, had been seeking $2 billion in damages and $4 billion in punitive damages.

Greedy bastards. They wanted 6 billion? I'm glad they only got half a billion. Not saying they didn't have a case, but they are opportunists if they want to shut down all sales in addition. Their 'contribution' to the Oculus tech might have amounted to less than 1% of the work. If Carmack borrowed some resources and didn't return them, and the programming work was done while he was employed by Zenimax, I just can't see how they figure their own share is worth 6 billion. The company itself was purchased by Facebook for only 2 billion. They want more than the net worth of the company as compensation for stolen resources?

Be glad you're getting anything at all Zenimax.

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ArabrockermanX

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@lostn: Not really, you start high because you know you won't get it... A general rule is to start high, but not so high that you'll piss off the judge and/or jury.

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lostn

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@ArabrockermanX: That's only true when you haggle directly with the other party. When a court decides what you get, inflating it does nothing for you except make you look bad.

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aj87

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@lostn: The fact that you say Bethesda, and not Zenimax, says that you have some grudge against Bethesda and how partial your opinion is. Also, if their contribution was not even 1%, as you say, I dont think he would have "destroyed data on his computer after he got notice of this litigation and right after he researched on Google how to wipe a hard drive--and data on other Oculus computers and USB storage devices were similarly deleted" and "Carmack admitted he secretly downloaded and stole over 10,000 documents from ZeniMax on a USB storage device, as well as the entire source code to Rage and the id tech 5 engine".

Thats seems some pretty desperate moves for only "less than 1% of the work". Fanboy much?

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lostn

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@aj87: The fact that you say Bethesda, and not Zenimax, says that you have some grudge against Bethesda and how partial your opinion is.

If you hadn't noticed, I was merely quoting the article. The article said Bethesda not me. I have no grudge against them.

Also, if their contribution was not even 1%, as you say, I dont think he would have "destroyed data on his computer

I don't think you understand the sheer amount of code that goes into a game or product. Yes he stole resources and code. In the grand scheme of Oculus that could would have represented a very tiny proportion of the code actually used. There is just no way a majority or even large percentage of the work for the entire development of Rift could have been done while Carmack was at Zenimax. He'd left there for a few years to join Oculus full time before the thing launched. But Zenimax thinks if there was something stolen from them, they are due more than the entire net worth of the Oculus. How does that compute?

Thats seems some pretty desperate moves for only "less than 1% of the work". Fanboy much?

I'm not a fanboy of anything. I don't even own a Rift nor do I intend to get one. Oculus and Carmack were found guilty of theft (though most of the other charges against them were dismissed). That is why he tried to destroy evidence. But the amount he stole in proportion to the amount created at Oculus is what I'm interested in. That's where the estimated 1% is relevant.

You on the other hand sound like a fanboy of Zenimax, or rather Bethesda, since Zenimax is only the parent company. Your favorite games are actually made at Bethesda.

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lonewolf1044

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@lostn: You can't even access how is worth anyone being you know nothing about what transpired and you have no inside sorces. Carmack got caught point blank and regardless on how much they wanted they have every right.

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lostn

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@lonewolf1044: It's a reasonable estimate. I think you're underestimating the amount of work needed to actually make a VR device. Carmack is just one guy. Yes he stole resources. But you can't seriously tell me all of the work that went into Rift was owned by Zenimax while nothing was actually done at Oculus.

What would you guess is the percentage of the final product that belonged to Zenimax? A massive amount of work was done by a team of people (not just Carmack) at Oculus to make it a finished product. Whatever he stole could not have made up for a significant proportion of the work Oculus did. But Zenimax is alleging that the product would have not been possible to make at all had it not been for whatever Carmack stole years ago.

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RamstainAU

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@lostn: Not exactly greedy, that's part and parcel of how haggling works... The one getting money starts high, other goes low, and you settle in the middle somewhere. Litigation is the same - it is very rare for a company to be awarded what they sued for originally.

In the case of IP, if you have an idea, and even a working skeleton for it, but then it's stolen by someone and they build on that foundation into something huge, how much of that would have happened without the skeleton? Even if they eventually changed the skeleton, the fact is that everything you have was based around that foundation, and without it you could still be at the starting line.

Also nice cutting of your quote in the first place. It is not Bethesda Softworks that is seeking damages at all, rather it is the owner - Zenimax, and your horrible quotation misrepresents this.

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lostn

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Edited By lostn

@RamstainAU: Also nice cutting of your quote in the first place. It is not Bethesda Softworks that is seeking damages at all,

I didn't think it made a huge difference to meaning of the text. I don't care who the entity is. Carmack was employed at Bethesda, which in turn is owned by Zenimax. He wasn't employed directly by Zenimax. When you quote articles in a comment section, you have limited space and don't want to quote large chunks of the article people have already read. You only want to quote enough that they know what you're referring to. I don't think it changes anything whether I quoted Bethesda or Zenimax. It's still the same guy who stole from his employer, the same amount stolen, and he is still worked directly for Bethesda.

In the case of IP, if you have an idea, and even a working skeleton for it, but then it's stolen by someone and they build on that foundation into something huge, how much of that would have happened without the skeleton? Even if they eventually changed the skeleton, the fact is that everything you have was based around that foundation, and without it you could still be at the starting line.

Carmack is a smart guy, and he himself developed most of what was created at Bethesda (and by extension Zenimax), including the engine. What he stole was used to save time at his new company. I have no doubt whatsoever that he could have built it all from scratch without any of Zenimax's resources. But he was looking to get things off the ground quicker. You can't say they could not have made the product without whatever he stole and that Zenimax are the only ones capable of creating that code. You need to remember that Carmack himself was the one who created the stuff he stole, including the Rage engine. The work was his, only it legally belonged to Zenimax.

Even if they eventually changed the skeleton, the fact is that everything you have was based around that foundation, and without it you could still be at the starting line.

I highly doubt this at all. They have smart people at Oculus, including Carmack. This isn't a question of whether Carmack has any talent. He likely created the stuff he took with him. He has quite a history with game engines. It's a legality issue. The work he reused was created when he was employed at Bethesda and legally belonging to Bethesda.

It's similar to how Naughty Dog created Crash Bandicoot but it is owned by Activision. Sony (parent company of ND) or ND can't make a Crash game without licensing it. Or how Kojima created the Fox engine but it's owned by Konami and he can't legally use it in his new game. Had he stolen the engine and made a new game with it, Konami would sue him. But you can't tell me that without the engine he stole he is incapable of making games or engines that games will use. He can make a new engine just as he made the Fox engine, but it would take longer. Or he could use someone else's engine which is what he ended up doing.

That is what Oculus had to have done. There is no way, just no way that the Oculus team was incapable of getting off the ground without Zenimax. Whatever that skeleton is would have been a very small part of the whole, and they could have created a new skeleton instead had they forseen this litigation years ago. If anything Bethesda would not be where they're at without Carmack's work.

It is not Bethesda Softworks that is seeking damages at all, rather it is the owner - Zenimax, and your horrible quotation misrepresents this.

I shortened the quote but did not mention 'Softworks' at all. I did this because the relevant part is not the entity but what they want. Zenimax owns Bethesda. I didn't quote that part because I just assumed everyone knew this and I didn't need to quote the whole thing, but the most important part, that the plaintiff is seeking 6 billion from a company worth 2 billion is what I quoted. Carmack worked at Bethesda, not the parent company. The parent company is the legal entity that handles all litigation. Whether Carmack worked at Bethesda or directly at Zenimax does not change the meaning of what I quoted at all. Because the "who" is not the important part I'm interested in quoting, but what rather what they were after.

This comment is already very long. It would be even longer if I didn't shorten the quotes.

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RamstainAU

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@lostn: If he took no code, but built an identical solution at Oculus to what he had built at Zenimax, it is still corporate espionage and/or IP theft.

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lostn

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@RamstainAU: Hmm. I don't know how the law works exactly, but can you actually patent a 'solution'? I mean somebody making a wheel is going to make something that looks like any other wheel, because a wheel is a wheel. There's only so many ways you can make that.

I can understand the code being owned by Zenimax, but if he uses a similar idea but rewrites the code entirely, and he is guilty of theft for doing that, something is very wrong. There are not infinite ways of doing the same thing. This will mean that someone could independently and accidentally come up with a solution that matches Zenimax's solution and be sued for theft. This is very concerning.

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Faye_Tallity

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Thanks for the BIG, FAT donation genius!!! Now maybe we can make better games, & re-release Oblivion 4 with NO bugs!

Ha...I know. Never in a million lol

Hopefully their future games, will have less bugs, right?!

Ha...I know....never in a million.... : (

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RamstainAU

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@Faye_Tallity: Bethesda makes those games, Zenimax publishes them. You really need to understand where this money is... (Hint, it's not with the developer that makes the games).

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The1stFishBone

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@RamstainAU: Where exactly do you think Bethesda gets their money?

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wtf_666

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VR/Facemasks are dead.

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Bond_Villain

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oooh not good!!!

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deactivated-589386581aa8b

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I guess Zenimax shareholders will have something positive to celebrate in the short term.

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petek480

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I doubt Oculus has even came close to selling $500m worth of its headsets.