Oculus VR Founder Accused of Fraud

[Steven Bogos]

Oculus VR Founder Accused of Fraud

Hawaii-based company Total Recall Technologies is claiming Luckey stole technology developed while under contract for his prototype Rift.

Whenever a company comes out with a cool new tech thing, it will inevitably be followed by a just as vunerable [http://www.escapistmagazine.com/news/view/112917-Nintendo-Sued-Over-Wii-Motion-Controls] to said lawsuits. The latest one come from Hawaii-based company Total Recall Technologies, and is accusing Oculus VR founder Palmer Luckey of breach of contract, and fraud.

Total Recall Technologies claims it hired Luckey in 2011 to create a "prototype head mounted display" after signing a contract and nondisclosure agreement. It is accusing Luckey of using feedback, and information obtained during his stint at the company to develop his prototype Oculus Rift unit, which he took to Kickstarter in 2012.

According to legal publication The Recorder [http://www.therecorder.com/id=1202727195533/Suit-Accuses-Oculus-Founder-of-Double-Crossing-Early-Backers?slreturn=20150425213809] (warning: paywall), Total Recall is seeking claims of breach of the duty of good faith and fair dealing against Luckey, along with conversion and constructive fraud against both Luckey and Oculus VR.

Despite first being announced nearly four years ago, the consumer version [http://www.escapistmagazine.com/news/view/140707-Oculus-Rift-Consumer-Edition-VR-Arrives-In-2016] of the Rift will only be arriving in 2016 (provided, of course, the company doesn't lose too many lawsuits).

Source: IGN [http://www.therecorder.com/id=1202727195533/Suit-Accuses-Oculus-Founder-of-Double-Crossing-Early-Backers?slreturn=20150425213809]

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[Daemascus]

And just now they make these accusations? Not say, during the Kickstarter?

 

[Steven Bogos]

And just now they make these accusations? Not say, during the Kickstarter?

During the Kickstarter they were a two-bit start up with no money. Now, Facebook has bought them for a billion fucking dollars. That's the reason right there.

 

[Hairless Mammoth]

Total Recall Technologies? That name is just making me imagine the fake head disguise Arnie wore in the movie being used as VR headsets.

It'll be pretty juicy to see if this company has the proof, money and legal chutzpah to go against Facebook's army of lawyers. Maybe they have a good case and either the money to last litigation or can reach a settlement. I'll be paying attention for the next year or two to see how this goes.

And just now they make these accusations? Not say, during the Kickstarter?

During the Kickstarter they were a two-bit start up with no money. Now, Facebook has bought them for a billion fucking dollars. That's the reason right there.

Yeah, it seems like a tech company would at least have someone keeping tabs on the immediate ventures of a former employee with an NDA. They might have waited through the Kickstarter and first dev kits to see a big juicy prize in the form of a huge buyout. Then they spent the past year building up a legal case.

 

[Baresark]

Considering Oculus has been major news on tech sites for years now, this feels like a desperate attempt to try and get some money for nothing. Should be interesting. But it's things like this that could ruin the dream of VR.

 

[Silentpony_v1legacy]

*GASP*
tech firms stealing from one another?! Violating the obviously sacred trust of two indie companies?!
Oh....say it ain't so!!
Are you telling me E3 is also political?!
Oh fuck off!!

 

[McGuinty1]

And just now they make these accusations? Not say, during the Kickstarter?

During the Kickstarter they were a two-bit start up with no money. Now, Facebook has bought them for a billion fucking dollars. That's the reason right there.

TWO billion fucking dollars.

*GASP*
tech firms stealing from one another?! Violating the obviously sacred trust of two indie companies?!
Oh....say it ain't so!!
Are you telling me E3 is also political?!
Oh fuck off!!

RIP Mr. Williams

 

[MiskWisk]

And just now they make these accusations? Not say, during the Kickstarter?

During the Kickstarter they were a two-bit start up with no money. Now, Facebook has bought them for a billion fucking dollars. That's the reason right there.

Well, despite my utter lack of faith and respect for Facebook, I really hope they use some of that money burning a hole in their pants to absolutely crush this lawsuit.

 

[Lightknight]

Shit, this is the second legitimate claim against Luckey.

http://ia601507.us.archive.org/3/items/gov.uscourts.cand.287721/gov.uscourts.cand.287721.1.0.pdf

Non-paywall PDF to the legal document. I got it from http://www.theregister.co.uk/2015/05/23/total_recall_technologies_sues_facebook_oculus/

They hired him to make a navigable, three-dimensional VR environment having ultra-wide field of view...

11. On May 27, 2011, Igra and Seidl filed a patent application, entitled
"System and method for creating a navigable, three-dimensional virtual reality
environment having ultra-wide field of view." That application later issued as
United States Patent No. 9,007,430.
12. In 2011, Seidl and Luckey continued their discussions with Seidl
requesting that Luckey build a prototype to Seidl's specifications with parts paid for
by the Partnership. Seidl explained to Luckey that with the Partnership?s initial
payment to Luckey, he expected exclusive rights to the design. Luckey agreed.
13. At all relevant times, the information provided to Luckey by TRT was
confidential, and TRT expected the information to remain confidential.
14. On August 1, 2011, Luckey executed a written "Nondisclosure,
exclusivity and payments agreement" contract with Seidl on behalf of the
Partnership. Two witnesses also executed the agreement on behalf of Luckey at
Luckey's direction: Tom Allan and Jeff Bacon.
15. Pursuant to the terms of the parties' contract, Luckey agreed, among
other things, to maintain information received from Seidl in the strictest confidence
and not to use confidential information received from Seidl for his own benefit.
17. Throughout the latter half of 2011 and into 2012, Seidl provided
confidential feedback and information to Luckey in order to improve the design of
the head mounted display.
18. Without informing the Partnership, on information and belief, Luckey
took the information he learned from the Partnership, as well as the prototype that
he built for the TRT using design features and other confidential information and
materials supplied by the Partnership, and passed it off to others as his own.
19. For instance, without informing the Partnership, in 2012 during the
term of the parties? agreement, Luckey pursued a Kickstarter campaign to promote a
highly immersive, wide field of view, stereoscopic headmounted display at an
affordable price ? a device that Luckey named the Oculus Rift.
20. On June 12, 2012, Luckey formed Oculus LLC.

ZeniMax also had a well established reason to sue.

It is a crying shame that no one evaluated ZeniMax's claims from their perspective. Had a news agency actually torn through the details of that case it would have shed a heck of a lot of light on Luckey and Carmack's questionable behaviors. I mean, Carmack literally took components of headsets he was developing for Bethesda and added them to Luckey's prototype and ZeniMax submitted documentation of him saying that in a public interview. So that first prototype that made the journalism community gasp in shock? Mostly ZeniMax tech. Even if they have since evolved they own a tremendous debt to ZeniMax regardless of how anyone feels about he company.

So this creates a new timeline of events that most likely means Facebook will lose a lot more money in lawsuits as well as Luckey seeing potential jail time unless they settle out of court.

Timeline:

1. Luckey develops a VR headset for Total Recall Technologies (TRT) and gives them a prototype.
2. Luckey keeps a prototype for himself and starts passing it off as his own, even sending it to John Carmack under the guise that Luckey is a VR enthusiast and this is his own model (it's possible that he did this while working with TRT to get help on the project he was a part of).
3. Carmack, who is working at ZeniMax, has six prototypes in his office for just this sort of thing and adds company property to Luckey's prototype. (In so doing, Carmack commits the same fraud that Luckey did with TRT except Carmack also acquired a non-disclosure from Luckey on ZeniMax's behalf which exonerates Carmack personally from the action and shifts the damage back on Luckey).

This is really bad. This really needs to have a fully fleshed out investigative story built around it.

 

[Lightknight]

And just now they make these accusations? Not say, during the Kickstarter?

During the Kickstarter they were a two-bit start up with no money. Now, Facebook has bought them for a billion fucking dollars. That's the reason right there.

Well, despite my utter lack of faith and respect for Facebook, I really hope they use some of that money burning a hole in their pants to absolutely crush this lawsuit.

Luckey produced a prototype VR headset with an ultra-wide field of view (one of Luckey's hallmark claims in the Kickstarter) for this company in August of 2011 and was under a nondisclosure that prevented him from revealing the information or using it for his own personal benefit. Both of which terms he broke when he sent an additional prototype to Carmack and then built a business around it.

If all of the documentation checks out, and they cited real documents and multiple witnesses, then Luckey may be going to jail even if Facebook settles the financial claims out of court.

 

[fix-the-spade]

It'll be pretty juicy to see if this company has the proof, money and legal chutzpah to go against Facebook's army of lawyers.

Next week: Total Recall ind aquired in hostile take over by Facebook.
Week after: Total Recall ind to close, all staff laid off, Zuckerberg unavailable for comment.

 

[Remus]

*GASP*
tech firms stealing from one another?! Violating the obviously sacred trust of two indie companies?!
Oh....say it ain't so!!
Are you telling me E3 is also political?!
Oh fuck off!!

This is my lawyer. I like to consider it more "financial companion".
If you only have one product, and I like to call it my "cash cow", use your patents well. Always sue the subsidiary, don't sue the company that made the purchase.

So now I have to watch Robin on Broadway again. Thanks for that.

 

[LordLundar]

So now I have to watch Robin on Broadway again. Thanks for that.

Personally, I would take pride in that statement.

 

[CrystalShadow]

Well, that... Sucks.

Not because I especially care what Luckey may or may not have done, but that this could collapse the entire VR scene before it's even gotten off the ground properly.

Whether they had the right to or not, Oculus largely open-sourced the rift design.
And now there's derivatives made by other companies.

There's no telling what sony's headset is based on, but I would be rather surprised if Valve's headset didn't borrow elements from the rift design.
And then there's the FOVE, which, while it has a different exterior design, and adds eye tracking, quite clearly shares basic functional elements of it's display, lens and tracking mechanisms with the rift headset.
(even possibly using the exact same screen, given they claim to be working with Samsung on things)

An NDA breach, or worse, patent violation in the very foundation of the rift would have knock-on effects that could destroy several other headsets, and possibly take out the first real possibly viable attempt at VR right here and now.
Poof. Just like that. Gone.
Because of lawyers, and lawsuits... >_>

 

[Lightknight]

Well, that... Sucks.

Not because I especially care what Luckey may or may not have done, but that this could collapse the entire VR scene before it's even gotten off the ground properly.

Not really, in the excitement over the product they've spawned a number of competitors. Some that are already quite comparable.

 

[CrystalShadow]

Well, that... Sucks.

Not because I especially care what Luckey may or may not have done, but that this could collapse the entire VR scene before it's even gotten off the ground properly.

Not really, in the excitement over the product they've spawned a number of competitors. Some that are already quite comparable.

Yeah, but you conveniently left out the part where I explained that many of them copied oculus's core design.
If it comes to a patent case, these derivative designs would be screwed over just as much as oculus itself would be...

 

[Silentpony_v1legacy]

SNIP

This is my lawyer. I like to consider it more "financial companion".
If you only have one product, and I like to call it my "cash cow", use your patents well. Always sue the subsidiary, don't sue the company that made the purchase.

So now I have to watch Robin on Broadway again. Thanks for that.

Serious props for making me spill coffee on my shirt from laughing. Very well done. Have an adorable baby griffon!

Spoiler

 

[Pyrian]

Software patents: Proving themselves a bad idea one lawsuit at a time.

 

[flying_whimsy]

Because of lawyers, and lawsuits... >_>

Wouldn't it be more accurate to say it was because two people stole the technology to make the rift in the first place?

I want VR to be a thing, I really do, but not like this. This is the second time that the oculus has been at the center of fraud and theft allegations, and it looks like those allegations are true.

Good thing Facebook has the money to bat this away, I'd be worried otherwise.

 

[CrystalShadow]

Because of lawyers, and lawsuits... >_>

Wouldn't it be more accurate to say it was because two people stole the technology to make the rift in the first place?

I want VR to be a thing, I really do, but not like this. This is the second time that the oculus has been at the center of fraud and theft allegations, and it looks like those allegations are true.

Good thing Facebook has the money to bat this away, I'd be worried otherwise.

It would. The heart of the problem appears to be that oculus released something based on stolen tech.
But, because of what they then did with it afterwards, patent lawsuits would cause far more widespread damage than the direct repercussions for oculus of having stolen that tech ever could...