Facebook Inc. bet early on virtual reality, buying Oculus VR 2 1/2 years ago to get its groundbreaking headset. Now it’s fighting claims that the Oculus Rift was built with stolen technology and promoted with a false origin story about a young entrepreneur tinkering in his parents’ garage.
What started as a falling out between tech geeks has become a messy $2 billion dispute that may drag Facebook co-founder Mark Zuckerberg onto the witness stand in a Dallas courtroom. The social media giant is accused of completing its acquisition of Oculus in 2014 with “full awareness” that the “holy grail” know-how behind one of Silicon Valley’s most promising consumer devices was misappropriated from another company.
ZeniMax Media Inc. is trying to show that it did the heavy lifting to develop the software and hardware for the virtual reality goggles, alleging a star employee recruited by Oculus purloined its intellectual property. Facebook and the Oculus executives named in the lawsuit deny wrongdoing and say it’s ZeniMax that’s spinning revisionist history.
If ZeniMax is successful in a trial that began Monday with jury selection, it would rewrite the story of how Facebook emerged at the forefront of the virtual reality boom, with Microsoft Corp., Sony Corp., Alphabet Inc.’s Google and others all competing for a piece of a market that’s forecast to exceed $84 billion in sales in 2020.
ZeniMax, a Rockville, Maryland-based maker of interactive software and games, traces the roots of the fight to 2012. That’s when John Carmack, one of its employees and the designer of blockbuster games such as Doom and Quake, began corresponding with Oculus founder Palmer Luckey.
Then a college-age video game enthusiast living in Southern California, Luckey was working on a “primitive virtual reality headset” that he named the Rift. At the time, it was “a crude prototype that lacked a head mount, virtual-reality specific software, integrated motion sensors and other critical features and capabilities needed to create a viable product,” according to ZeniMax’s lawsuit.
ZeniMax contends Carmack was responsible for the breakthroughs that transformed the Rift into a “powerful immersive virtual reality experience.” But after Carmack and Luckey agreed to use the Rift to showcase a specially configured version of Doom 3 at a Los Angeles convention in 2012, relations between the startups quickly soured, according to ZeniMax.
Instead of discussing how Oculus would compensate ZeniMax, Luckey and Oculus’s then-Chief Executive Officer Brendan Iribe allegedly became “increasingly evasive and uncooperative.” Next, they hired Carmack, who is accused of copying thousands of documents from his computer at ZeniMax.