ZeniMax Media filed suit against Oculus VR today, accusing the virtual reality headset manufacturer and its founder, Palmer Luckey, of misappropriating trade secrets. The Oculus Rift is being constructed on trade secrets that Oculus VR’s founder and half a dozen of ZeniMax’s former employees now working at Oculus improperly possess, ZeniMax alleges. The company also argues that Oculus is wrongfully benefiting from years and millions of dollars’ worth of ZeniMax research and, rather than agree to a business arrangement in which ZeniMax would receive 2 percent equity stake in the company, Oculus began poaching its employees.

According to the suit

“The lawsuit filed by ZeniMax has no merit whatsoever,” a representative from Oculus told Polygon today. “As we have previously said, ZeniMax did not contribute to any Oculus technology. Oculus will defend these claims vigorously.”

According to a copy of the filing obtained by Polygon, ZeniMax claims that Oculus has “wrongfully taken. ZeniMax intellectual property and commercially exploited it for their own gain.” ZeniMax includes copyrighted computer code, trade secrets, and “technical know-how” relating to VR technology as part of that intellectual property. The company filed suit today, according to a press release, because “efforts by ZeniMax to resolve this matter amicably have been unsuccessful.”

In the suit, ZeniMax officials say that the company has for many years invested “tens of millions of dollars” in research and development into, among other things, virtual reality and immersive technologies. Carmack, according to the suit, also conducted research to address technological issues associated with virtual reality.

After Oculus VR’s “refusal to enter into serious negotiation with ZeniMax,” ZeniMax directed Carmack to stop providing “proprietary information or other technological assistance” to the company until an arrangement could be made. Rather than do so, ZeniMax argues, Oculus began recruiting ZeniMax employees like Carmack, who joined Oculus as its Chief Technology Officer last year.

The suit also traces through ZeniMax’s history with virtual reality experimentation, which started, according to the filing, back in the 1990s. ZeniMax developed prototype software for its major video game franchises, including The Elder Scrolls, designed to optimize the game in a VR display device, according to the suit. And in 2011, ZeniMax even experimented with off-the-shelf headsets.

ZeniMax’s complaint ends

  • Common law misappropriation of trade secrets, which encompasses both the use of those secrets and Oculus’ hiring of ZeniMax employees.
  • Copyright infringement against all defendants, pertaining to Oculus VR’s use of Doom 3: BFG Edition without permission.
  • Breach of contract against all defendants, encompassing Luckey’s use and disclosure of proprietary information under a nondisclosure agreement (NDA).
  • Unfair competition against Oculus, because Oculus VR breached the terms of the NDA, took ZeniMax’s intellectually property and used it for its own gain without obtaining a license to use the technology or information, thereby depriving ZeniMax of the opportunity to realize gains from its technology.
  • Unjust enrichment against all defendants, who “refuse to compensate ZeniMax” for its contributions and also gained access to confidential information by hiring ZeniMax employees.
  • Trademark infringement, for Oculus VR’s use of trademarked materials, including Doom, Rage and Skyrim.
  • False designation against all defendants, because Oculus VR’s products are “likely” to imply the mistaken belief that they come from or are authorized by ZeniMax.