Zenimax, Oculus in legal dispute, and John Carmack's caught in the middle

Facebook's $2 billion acquisition of Oculus VR has led to a fight over rights to virtual reality technology -- and game programming legend John Carmack is in the middle of the dispute. In legal letters obtained by the Wall Street Journal, Zenimax Media -- parent to Elder Scrolls and Fallout developer Bethesda Softworks -- is claiming it owns key technology behind the Oculus Rift VR headset, which was the impetus behind the $2 billion acquisition deal. Caught up in the dispute is Carmack. He was working with Oculus on VR technology while still employed at id Software -- which is owned by Zenimax, leading to Zenimax's claims of rights ownership. Carmack left id Software for Oculus last year, and had been working with Oculus in the months prior as chief technology officer. An Oculus rep told Gamasutra, "It's unfortunate, but when there's this type of transaction, people come out of the woodwork with ridiculous and absurd claims. We intend to vigorously defend Oculus and its investors to the fullest extent." Zenimax reps said in a statement (see full statement below), "Zenimax believes it is necessary to address these matters now and will take the necessary action to protect its interests." The company is seeking compensation, though there's no official word yet on whether court proceedings will ensue. Zenimax claims that without Carmack's help, Oculus wouldn't be the successful startup it is today. In a letter from April, Zenimax told Oculus and Facebook lawyers, "It was only through the concerted efforts of Mr. Carmack, using technology developed over many years at, and owned by, Zenimax, that Mr. [Palmer] Luckey [Oculus founder] was able to transform his garage-based pipe dream into a working reality." Oculus has been hiring top VR talent from other companies, namely Valve Software. Earlier this year, Carmack explained why he ended up leaving id Software, a company he co-founded, after working on the side with Oculus in the months prior: "When it became clear that I wasn't going to have the opportunity to do any work on VR while at id Software, I decided to not renew my contract." We're seeking further comment from the companies involved in the dispute. Update #1: Zenimax provided Gamasutra with its statement regarding the dispute. Here it is, in full:

ZeniMax confirms it recently sent formal notice of its legal rights to Oculus concerning its ownership of key technology used by Oculus to develop and market the Oculus Rift. ZeniMax’s technology may not be licensed, transferred or sold without ZeniMax Media’s approval. ZeniMax’s intellectual property rights arise by reason of extensive VR research and development works done over a number of years by John Carmack while a ZeniMax employee, and others. ZeniMax provided necessary VR technology and other valuable assistance to Palmer Luckey and other Oculus employees in 2012 and 2013 to make the Oculus Rift a viable VR product, superior to other VR market offerings. The proprietary technology and know-how Mr. Carmack developed when he was a ZeniMax employee, and used by Oculus, are owned by ZeniMax. Well before the Facebook transaction was announced, Mr. Luckey acknowledged in writing ZeniMax’s legal ownership of this intellectual property. It was further agreed that Mr. Luckey would not disclose this technology to third persons without approval. Oculus has used and exploited ZeniMax’s technology and intellectual property without authorization, compensation or credit to ZeniMax. ZeniMax and Oculus previously attempted to reach an agreement whereby ZeniMax would be compensated for its intellectual property through equity ownership in Oculus but were unable to reach a satisfactory resolution. ZeniMax believes it is necessary to address these matters now and will take the necessary action to protect its interests.

Update #2: Re/code claims to have obtained a copy of a non-disclosure agreement between representatives of id and Oculus VR that would seem to govern their partnership to work on VR, including Zenimax's rights to the work Carmack was doing while he was still at id. The agreement was signed in May of 2012, roughly a month before the first Oculus Rift prototype was showcased at E3, and includes language like "[Oculus VR] shall not acquire hereunder any right whatsoever to any proprietary information." The agreement further stipulates that the term "proprietary information" encompasses things like prototypes and research data.