# Professionalism/Zenimax v. Oculus VR

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## Background

In 2009, Palmer Luckey began experimenting with virtual reality headsets, and created a prototype in 2010 which eventually became the basis for the Oculus Rift. In 2012, John Carmack, a game developer whom Luckey looked up to and an employee of Zenimax Media, asked for a prototype of the headset and demonstrated it at the Electronic Entertainment Expo. The two worked together to start the company known as Oculus VR, and soon appointed Carmack as CTO and Brendan Iribe as CEO. After a very successful Kickstarter campaign in August 2012, raising over $2 million, Oculus VR proceeded to raise funding through venture capitalists. In March of 2014, Facebook acquired Oculus VR for $3 billion.

## Zenimax v. Oculus VR

Shortly after the acquisition, Zenimax began disputes with Oculus VR, claiming intellectual property rights, saying that Carmack’s work on the Oculus Rift uses technology developed by Zenimax through years of research and development. On May 21, 2014, Zenimax filed a lawsuit against Oculus VR and Palmer Luckey. The jury trial started on January 9, 2017 and on February 2, 2017, the jury concluded that Oculus did not misappropriate trade secrets, but awarded Zenimax $2 billion in compensation and $4 billion in punitive damages from a violation of non-disclosure agreements, copyright infringement, and false designation by Oculus, Luckey, and Iribe.

## Business Ethics

Business ethics are those professional ethics that govern the conduct of an individual or organizational outside the realm of fiduciary responsibility, that is those responsibilities other than making a profit. Governments use laws and regulations to enforce good business practices, but laws are not the same as ethics. Since laws have legal repercussions and ethics often don’t (although noncompliance with business ethics can have legal repercussions). Laws are issued by the government. Organizations issue a written “code of ethics” that is relevant to conduct of individuals and entire organization and applies to all aspects of business conduct.
Corporate social responsibility the primary issue that business ethics is concerned with since in the U.S. and in most countries corporate entities are legally treated as persons. Milton Friedman, an economist, stated that corporate executives' "responsibility... generally will be to make as much money as possible while conforming to their basic rules of the society, both those embodied in law and those embodied in ethical custom". Friedman also said, "the only entities who can have responsibilities are individuals … A business cannot have responsibilities.
When the code of ethics is broken, there are ethical issues that arise. Types of ethical issues include those involving the rights or duties between a company and employees/suppliers/customers/shareholders, and those between different companies. A type issue involved in the case is that between ZeniMax and its former employees (John Carmack and 5 others). These former employees who used to work for id Software has been accused of stealing intellectual property from the company. This research along with collaboration between John Carmack and Palmer Luckey became the foundation of Oculus VR. Tech heavy industries like those of Silicon Valley are known to be targets of industrial espionage . In this case Oculus has used information from ZeniMax to become popular enough to be recognized and acquired by Facebook. Facebook has also been implicated in the lawsuit from ZeniMax as acquiring Oculus with full knowledge of that espionage.

## Association for Computing Machinery (ACM) Code of Ethics

Programming ethics is concerned with the conduct of software developers and their use of intellectual property. It is concerned with the conduct surrounding IP even when it not protected by copyright law, patent etc. Honor confidentiality is also required of a programmer who must keep secret any information from his/her employer that arises while working on a project. Programming ethics also prohibits the use of software that knowingly or unknowingly obtained in an illegal or unethical way.
In this case the relevant code of ethics is that from ACM, the association of computing machinery, because software in involved with the IP used by Oculus purportedly stolen from ZeniMax. The commitment of this ethical conduct is expected of ACM members which include: voting members, associate members, and student members. The ACM code of ethics and professional conduct consists of 24 imperatives that are organized into 4 sections. These sections include: (1) general moral imperatives, (2) specific professional responsibilities, (3) organizational leadership imperatives, and (4) code compliance. The following are examples of the ACM code of ethics sections applied to the case of Zenimax v. Occulus VR:
1.6 Give proper credit for intellectual property. ZeniMax’s CEO Robert Altman refused to explore the gaming application of VR as proposed by John Carmack. According to Carmack’s filing: “Altman decided not to pursue the opportunity to make ZeniMax a player on the ground floor of the VR hardware revolution,” Although Altman decided not support Carmack's proposal, the IP that Carmack took over to Oculus violated the nondisclosure agreement between software developers and the companies they work for.
2.8 Access computing and communication resources only when authorized to do so. In the case, Palmer Luckey collaborated with Carmack in April 2012 using ZeniMax resources to improve Rift headset. This collaboration violates this imperative of the ACM code because Carmack used resources from id Solutions to perform this development on the Rift.
3.1 Articulate social responsibilities of members of an organizational unit and encourage full acceptance of those responsibilities. Once the case between ZeniMax and Oculus VR was underway, Zuckerburg was asked to testify. “We are highly confident that Oculus products are built on Oculus technology. The idea that Oculus products are based on someone else’s technology is just wrong," Zuckerberg said in sworn testimony during the trial. Whether Zuckerburg was telling the truth or not, employees of Facebook and Oculus will accept his statement as precident for social responsibilities that they should hold.

## Copyright Law and Coding

US Copyright protection extends to all “works of authorship”, which includes plays, novels, musical compositions, and computer programs. A copyright gives exclusive rights to the owner to create and distribute (i.e. copy) the work for a set period of time. Notably, a copyright protects the expression of a particular idea, not the idea itself. In contrast, a patent protects intellectual property (the idea) such as a novel invention or solution. According to the US Copyright Office, “a ‘computer program’ is a set of statements or instructions to be used directly or indirectly in a computer in order to bring about a certain result. Copyright protection extends to all the copyrightable expression embodied in the computer program. Copyright protection is not available for ideas, program logic, algorithms, systems, methods, concepts, or layouts.” As this case illustrates, however, it is often difficult in practice to distinguish between an idea or function and the particular set of instructions used to express it. One possible reason for the legal ambiguity surrounding coding and copyright protection is that copyrights were not originally intended to deal with computer code. Instead, they were devised to protect the rights of printers and publishers to have exclusive “copy rights” to particular works that they were producing and selling. Because the legality of the situation is so murky, we assert that it becomes even more important to understand the professional codes of conduct.

## Generalizations

One way to understand how to behave professionally in the world of coding is to examine the professional norms of another related field, one that is also governed by copyright law: fiction writing. In fact, one of the key players in the case did just that. In a Facebook post commenting on the court proceedings, Oculus CTO Carmack said “The analogy that the expert gave to the jury was that if someone wrote a book that was basically Harry Potter with the names changed, it would still be copyright infringement. I agree; that is the literary equivalent of changing the variable names when you copy source code. However, if you abstract Harry Potter up a notch or two, you get Campbell’s Hero’s Journey, which also maps well onto Star Wars and hundreds of other stories. These are not copyright infringement.”
Borrowing heavily from the work of one’s contemporaries and predecessors alike is a persistent theme of fiction writing. This is exemplified through the well know quotation “good writers borrow, great writers steal outright”, which, tellingly, has been attributed in various forms to a variety of writers and other artists. In fact, there are many people who argue that there are only a fixed number of basic storylines, and all works of fiction – from plays to novels to films – are a variant of one of these fundamental plots. While the number of story forms varies (journalist and author Christopher Booker argues that there are 7 basic plots, while a computational study at the University of Vermont concluded that stories were dominated by six major emotional arcs, which could be mathematically analyzed and visualized), the basic concept is the same. Despite this, there are no calls for all writing to cease. We do not tell authors that it’s not worth it, everything has been done before. Instead, we as a society recognize that each individual can add value to a story through their unique interpretations.
Based on this analysis, we assert that, to be a professional in creative and collaborative fields, you can absolutely build off the work of others, but you have to give credit where credit is due, and make sure that you are adding value, eventually to benefit the collective good.

## Future Directions

At the time of this writing, the legal and political disputes between Oculus, Facebook and Zenimax are ongoing. Future work could detail these proceedings, and use the evolution of this case to examine how ethical and professional norms change with the advent of new technologies. Of particular interest would be how professional norms and societal expectations co-evolve with emerging technologies and new business models. Additionally, as we’ve noted in this chapter the law has not yet caught up with technology like coding and virtual reality. Future expansions of this chapter could further explore the history of software copyright and how it has shaped the current legal and social environment.

## References

* ↑ Friedman, M. (2007). The Social Responsibility of Business Is to Increase Its Profits. In P. D. D. h c W. C. Zimmerli, D. M. Holzinger, & K. Richter (Eds.), Corporate Ethics and Corporate Governance (pp. 173–178). Springer Berlin Heidelberg. Retrieved from http://link.springer.com/chapter/10.1007/978-3-540-70818-6_14
* ↑ Heath, A. (n.d.). Mark Zuckerberg will testify in a $2 billion lawsuit that claims the VR startup he bought was based on stolen tech. Retrieved May 9, 2017, from http://www.businessinsider.com/mark-zuckerberg-palmer-luckey-to-testify-in-2-billion-zenimax-lawsuit-against-oculus-vr-2017-1
* ↑ ACM Code of Ethics and Professional Conduct. (n.d.). Retrieved May 9, 2017, from http://www.acm.org/about-acm/acm-code-of-ethics-and-professional-conduct
* ↑ Facebook’s VR Foray Derided as “Fanciful Story.” (2017, January 9). Bloomberg.com. Retrieved from https://www.bloomberg.com/news/articles/2017-01-09/facebook-s-virtual-reality-foray-challenged-as-fanciful-story
* ↑ Gilbert, B. (n.d.). Facebook just lost a $500 million lawsuit — here’s what’s going on. Retrieved May 9, 2017, from http://www.businessinsider.com/facebook-zenimax-oculus-vr-lawsuit-explained-2017-2
* ↑ The Internet Writing Journal. (1997). “Basic Copyright Concepts For Writers.” Retrieved from: http://www.writerswrite.com/journal/sep97/basic-copyright-concepts-for-writers-9973
* ↑ World Intellectual Propery Organization. (2017). “Patents.” Retrieved from: http://www.wipo.int/patents/en/
* ↑ United States Copyright Office. (2012). “Copyright Registration for Computer Programs.” Retrieved from: https://www.copyright.gov/circs/circ61.pdf
* ↑ Takahashi, Dean. (2017). “Oculus’ John Carmack vents about $500 million ZeniMax jury verdict.” Retrieved from: https://venturebeat.com/2017/02/02/oculus-john-carmack-vents-about-500-million-zenimax-jury-verdict/
* ↑ Kakutani, Michiko. (2005). “The Plot Thins, or Are No Stories New?” Retrieved from: http://www.nytimes.com/2005/04/15/books/the-plot-thins-or-are-no-stories-new.html?_r=0
* ↑ Reagan et al. (1997). “The emotional arcs of stories are dominated by six basic shapes.” Retrieved from: https://arxiv.org/pdf/1606.07772v2.pdf