Oculus lawsuit testimony details ZeniMax’s negotiations with VR company

As talks about a potential partnership between Oculus and ZeniMax broke down in 2012, things began to get nasty and ZeniMax became threatening, Oculus co-founder Brendan Iribe testified in a Dallas courtroom today.

At one point, Iribe said under oath, Bethesda Softworks’ president called the Oculus team “kids” and threatened to stop then-id Software CTO John Carmack from working on anything else VR related if Oculus didn’t sign a partnership deal.

The counter-proposal on the table at the in-person November 2012 meeting would have given ZeniMax 15 percent equity interest in Oculus.

The day’s testimony in the $2 billion lawsuit over who developed the tech behind the Oculus Rift VR headset opened with Oculus’ attorney working to establish Iribe’s technical prowess and background.

They delved into his early interest in video games and computers and how he eventually went on to study electrical engineering in college. In school, he met Oculus chief software architect Michael Antonov and they bonded over their shared interest in programming before dropping out to form their own company.

This company eventually went on to become Scaleform, the business that was later acquired by Autodesk in 2011 for over $36 million.

This focus on software was used to set up Iribe’s desire to hire singular talent for Oculus such as Jack McCauley, part of the original team that created the first Guitar Hero controller; robotics and computer vision expert Steve LeValle; and an engineer who built the company’s custom sensor tech.

flicker_Official GDC

Establishing that Oculus had such a dedicated engineering focus was used by Oculus’ attorney to try and show that Carmack only acted in an advisory role for Oculus. The defense also showed emails that rebuked Carmack’s advice or demonstrated instances where Carmack himself said that Oculus code and implementation was superior to his own solutions. Through all this, Iribe and Oculus attorneys were adamant that no ZeniMax code was involved, as the new sensor built by Oculus would be incompatible with anything Carmack originally shared under NDA early in 2012.

The defense also tried to use emailed exchanges between Iribe and then-id Software president Todd Hollenshead and current creative director Tim Willits, to further establish the idea that no one at ZeniMax provided opposition about their use of the Rage or Doom 3 BFG Edition software. This is also after sharing with them Iribe’s entire PAX schedule of press demonstrations and Willits’ hands-on demonstration in late 2012.

These email threads culminated in a late September 2012 proposal from Iribe to Hollenshead that offered 2 percent equity for allowing Carmack to engage in a technical advisor role and an additional offer for investor equity at either a seed round or Series A financing.

But ZeniMax balked at the offer, instead proposing that it get 15 percent nondilutable equity in Oculus, which is unheard of according to Iribe.

This led to an in-person meeting at Bethesda between Iribe, Antonov and Bethesda Softworks president Vlatko Andonov, who Iribe said is known for his “colorful” personality. They failed to reach an agreement. Iribe described Andonov as condescending and said at one point the Bethesda president told the trio of Oculus founders, “You guys are just kids, you should be working with us.” Iribe went on to say that the representative said that if Oculus didn’t sign “they wouldn't let [Carmack] work on anything VR-related."

In cross-examination, ZeniMax’ attorney made it clear that the company felt that the 15 percent equity stake would have been representative of the contributions Carmack made to Rift. His work on the Rift, ZeniMax argued, included technical assistance and head and neck modeling.

The attorney then delved into what ZeniMax was calling the “id Five,” five employees that were working at id Software and left to join Oculus. An email presented in court from Carmack listed ex-id employees as well as then-current ones that “wouldn’t surprise” Carmack if they left.

A series of other emails presented in court showed an exchange between Oculus co-founder Nate Mitchell and Iribe which talked about reaching out to some of those still at id. That led to the id Five flying out to Oculus for a meeting. But Iribe disputed the attorney’s take on the visit, saying it was an innocuous visit that turned into a job interview once they told him how unhappy they had become at id Software following ZeniMax’s takeover. They also said they were contemplating their own company, Iribe said.

Oculus/Facebook

The plaintiffs also showed a WhatsApp transcript between Iribe and Zuckerberg the night before Zuckerberg’s deposition last January. “We need to sync before your depo,” said Iribe’s text, a message that ZeniMax believes was an attempt to collude on their stories.

ZeniMax ended their cross examination with a quote from a white paper at Oculus that included the following in its acknowledgements section:

“We want to thank John Carmack, creator of Heaven and Earth (and Doom, of course).”

It is a fairly prominent proclamation, the ZeniMax team supposed, that Carmack’s contributions were indeed a key component to the Rift’s success.

In the afternoon, ZeniMax brought in David Dobkin, a computer science professor from Princeton University. He testified about dissecting the ZeniMax and Oculus codebases (terabytes of code, he said) to determine if any of the components included copied trade secrets.

He told the court room that he was able to identify seven core components in both codebases that exhibited telltale fingerprints of being copied. He said the evidence was in how both included aberration correction, time warping, and drift correction.

Dobkin, whose shaky voice but deliberate word choice was an odd blend of rehearsed and nervous, produced several diagrams showing blocks of code that he identified as evidence of one or the other kind of copying.

In cross-examination, Oculus attorneys tried to tear down each of Dobkin’s points based on the notion that determining non-literal copying is subjective.

Because there were no instances of literal copying from ZeniMax code sources to Oculus code, the assertion was that Dobkin’s findings were open to interpretation regardless of his expert status. As Oculus lawyers went down each of the seven of Dobkin’s core components, they presented statements from Dobkin’s 2016 deposition that he was not an expert at that time of his report in any of the particular fields required, such as chromatic aberration and gravity orientation. They also presented quotes from another subject expert Michael Gleicher’s deposition that these problems were well-known prior to 2012, as were the software solutions to the problems.

Gleicher himself then took the stand and was run through the same credential exhibition. He has been in virtual reality for 20 years and computer graphics for 30 years, having earned a bachelors of science in electrical engineering and computer science from Duke University as well as a masters and doctorate in computer science from Carnegie Mellon. Gleicher, in fact, created the first VR class at the University of Wisconsin-Madison, the same college that he teaches computer science at now.

A key difference in what Dobkin and Gleicher contributed to this trial is that Gleicher only analyzed the ZeniMax codebase, but his expertise in VR technology offers up some new and unique arguments. Gleicher, for instance, broke down the concept of “immersive VR” as equal parts software and hardware, and the hardware further has the constituent parts of displays, sensors, lenses, and ergonomics.

Flickr: Official GDC

Gleicher produced a graphic that showed a Venn diagram of what makes just the head-mounted display and what makes up an actual VR experience. The HMD side contained displays, lenses, and ergonomics while the other side was only sensors. This provided the base of the ZeniMax argument that since the original prototype sent to Carmack by Luckey did not include a sensor, it was not a true VR experience. Since Carmack provided the Hillcrest sensor himself, he was the one who completed the immersiveness qualifications.

Gleicher also prescribed three points to the software half of the equation. The software should produce good-looking visuals that are believable, move correctly with the sensor data and offer low latency or attempt to reduce the perception of latency. Since the only software available to show for a large portion of 2012 was ZeniMax’s VR testbed and Doom 3 BFG Edition, ZeniMax proposes they were the sole contributors to this half of that VR experience.

Oculus opened up its cross-examination by pushing Gleicher to confirm that simply having software and sensors won’t result in a full VR experience either. This gave the impression that what Luckey created was just as vital as ZeniMax’s contributions, if not more.

Tomorrow will see the conclusion of Gleicher’s testimony.

The federal trial is expected to run as long as another two weeks.

Much of yesterday was taken up by the testimony of Oculus’ other founder Palmer Luckey, his first public appearance since it came to light in September that he had been secretly spending money on funding an unofficial Donald Trump group that “shitposts” anti-Hillary Clinton memes and images.

That day in court seemed to be centered around proving whether Luckey was capable of creating the Oculus Rift on his own, without the help of Carmack.

On Tuesday, Facebook founder Mark Zuckerberg was grilled about his company’s seemingly rushed acquisition of Oculus for $2 billion. And last week, Carmack was questioned about his decision to copy some code from id Software computers before leaving the company to work at Facebook with Luckey.

Rockville, Maryland-based ZeniMax sued Oculus in May 2014, alleging that the VR startup misappropriated trade secrets in the development of the Oculus Rift headset. The lawsuit was filed weeks after ZeniMax publicly accused Carmack of providing technology to Oculus. Oculus has said it will disprove those claims.

According to ZeniMax’s complaint, Oculus co-founder and Rift inventor Palmer Luckey — along with a half a dozen ex-ZeniMax employees who are now working at Oculus — are building the Rift based on years and millions of dollars’ worth of ZeniMax’s research and copyrighted code.

Oculus, which is now owned by Facebook, denies the allegations, saying the lawsuit came to a head after Facebook purchased the company and as a “chance for a quick payout.”

The trial kick off was bookended by twin salvos of accusatory statements from ZeniMax and Oculus.

The history of Luckey, the Oculus Rift, Carmack and ZeniMax-owned id Software, is a complicated and entwined one. You can read more about it in our previous coverage of the ongoing suit.

Update: We’ve updated the story with the conclusion of Iribe’s testimony.

Update 2: We’ve updated the story with the conclusion of the day’s testimony.