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posted: 5/10/2014 8:12 AM

Oculus, Facebook might face legal challenge

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  • Oculus weathered fan backlash after the virtual-reality hardware firm announced in March that it was being sold to Facebook for $2 billion. But now, it's facing a much bigger problem: a possible legal challenge from one of the country's largest video game companies.

      Oculus weathered fan backlash after the virtual-reality hardware firm announced in March that it was being sold to Facebook for $2 billion. But now, it's facing a much bigger problem: a possible legal challenge from one of the country's largest video game companies.
    Invision

 
By Hayley Tsukayama, The Washington Post

WASHINGTON -- Oculus weathered fan backlash after the virtual-reality hardware firm announced in March that it was being sold to Facebook for $2 billion. But now, it's facing a much bigger problem: a possible legal challenge from one of the country's largest video game companies.

ZeniMax is attempting to stop the deal, arguing that it owns some of the technology used in Oculus's preproduction virtual-reality goggles known as the Oculus Rift. ZeniMax "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," the Rockville, Maryland company said in a statement to The Washington Post. The move is necessary, the company said, "to protect its interests."

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The average gamer probably knows ZeniMax best as the parent company of Bethesda Game Studios, the team responsible for mega hits such as The Elder Scrolls games and Dishonored. But several other game developers fall under its umbrella -- including Id Software, a studio co-founded by John Carmack, chief technology officer at Oculus and a legendary game programmer.

According to ZeniMax, Carmack worked extensively on virtual-reality research and development projects when he was employed by the Maryland company, including some technology used in a version of the goggles in 2012 and 2013. When Carmack left ZeniMax, the statement said, Oculus co-founder Palmer Luckey acknowledged in writing that ZeniMax owned the intellectual property for the work Carmack did there during those years.

"The proprietary technology and know-how Mr. Carmack developed when he was a ZeniMax employee, and used by Oculus, are owned by ZeniMax," the statement said. ZeniMax also said that Luckey agreed not to disclose the technology to third parties without their approval.

ZeniMax said it attempted -- and failed -- to strike a deal with Oculus before the Facebook acquisition was announced. One proposal discussed, it said, would have given ZeniMax an ownership stake in Oculus.

Oculus isn't going down without a fight, saying in a statement to The Washington Post that ZeniMax is wrong. "It's unfortunate, but when there's this type of transaction, people come out of the woodwork with ridiculous and absurd claims," Oculus said. "We intend to vigorously defend Oculus and its investors to the fullest extent."

Facebook did not return a call seeking comment.

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