John Carmack Fires Back At Zenimax, Sues For $22 Million

John Carmack, co-founder of id Software and one of the key designers involved in the Oculus Rift, is taking his former employer Zenimax to court for "more than $US22.5 ($30) million", reports Dallas News.

Carmack claims the money dates back to Zenimax's purchase of id Software in 2009 — it constitutes the remainder of Carmack's share of that deal as one of id's three co-founders — and that they are refusing to pay it because of "sour grapes" related to the ongoing legal disputes between Carmack's current employers Oculus and Zenimax.

Here's a summary of Carmack's complaints from the suit, which basically claim that his legal representatives wrote to Zenimax last month requesting that a number of shares in the company, which he received as part of the purchase, be converted into cash:

TO THE HONORABLE COURT:

Defendant ZeniMax Media Inc. will soon be obligated to pay Plaintiff John Carmack more than $US45 ($60) million in cash under the terms of the Asset Purchase Agreement and a Convertible Promissory Note by which ZeniMax bought the assets of id Software, Inc. in 2009.Mr. Carmack's right to receive that money ripens no later than June 23, 2017, the eighthanniversary of id Software's sale to ZeniMax. It is the final payment due to Mr. Carmack for the sale of id Software, the world-famous video game studio he founded and led for more than 20 years.

But ZeniMax clearly doesn't want to pay. And while Mr. Carmack awaits ZeniMax's seemingly inevitable refusal to honour its obligation to pay the remainder of the purchase price, ZeniMax is already in breach of the Asset Purchase Agreement and Convertible Promissory Note. Pursuant to those contracts, Mr. Carmack has the absolute right "to convert all or any portion of the Unpaid Principal Balance solely into shares of ZeniMax's CommonStock . . . ." All of those shares are subject to a $US45 ($60) per share put option that will mature no later than June 23, 2017.

In the suit, Carmack's lawyers argue that there are "sour grapes" in play:

When ZeniMax bought id Software in 2009, it agreed to pay a total of $US150 ($200) million for that purchase. Now that the final instalment of that bill is coming due, ZeniMax is simply refusing to pay. But sour grapes is not an affirmative defence to breach of contract. This Court should enter judgment against ZeniMax for all the money that it agreed to pay Mr. Carmack for the sale of his former company.

And reading between the lines here, it looks like Carmack's lawyers are claiming that, after asking Zenimax for a resolution, were told "nuts".

On March 2, 2017, ZeniMax's general counsel responded to Mr. Carmack's conversion notice and sale offer. By that letter, ZeniMax made it clear that the company would not voluntarily comply on a timely basis with the conversion notice. The content and tone of the letter also made it clear that ZeniMax was unlikely to comply with its obligations under the shareholders' agreement by either buying the offered shares or notifying the other shareholders of their right to purchase them.

You can read the entirety of the suit here.


Comments

    If i understand the Zenimax v Oculus case, it's pretty much Carmacks fault the whole lawsuit happened, it seems that he stole Zenimax's property when he moved to becomes Oculus' CTO.

    That's my understanding anyway.

      As I understood it Zenimax's court win against Oculus was complete crap, based off an utterly wrong "expert" interpretation of the way software development actually works.

      It's not that he stole from Zenimax, rather that they claim Occulus uses non-literal copies of code he wrote while working as Zenimax.
      There's a problem with that though. Carmack and his team wrote the Oculus Rift code from scratch, as he says they did, there are only so many ways to write the code to make it function. People tend to have a particular style/method when they code, so you will often find similarities between programs they've written, cos they tend to do code certain functions in a particular way no matter what the program is.
      What Zenimax is essentially claiming, is that he copied the code, and just changed the names of the variables. (Kind of like taking a story like Star Wars, and renaming the characters, while leaving everything else the same)
      But it doesn't end there. Personally, I don't think Carmack is at fault from what I've read and with what I have experienced with coding myself, but there were actually other people who worked at Occulus, who admitted they copied/pasted stuff directly from the Zenimax SDK and put it in to their work. That's the main reason why Zenimax was awarded the copyright claim.
      I think trying to pin non-literal copying on Carmack is a crock of shit though. He would always write code for certain functions using a particular method that he knows works out of habit. It's like the way novel authors have a particular style. Some you can tell who's written it because they tend to use similar arrangements of words, or have a particular way they describe things. Trying to say that it's "copying" is a crock.

        Either that or this court case could throw into dispute that Zenimax has full ownship of id Software .... if they hadn't made the final payment. Does that mean that Carmack simply borrowed from himself?

          haha yeah I was thinking the same thing. If they don't pay him out, technically he should still own a part of the company ;)
          I think it's gonna be an interesting one to watch. Hard to say which way it'll go really.

        Non-literal copying isn't a crock at all. I'm a long-time software developer and it's something we always have to be careful of. The law requires more than simply that they accomplish the same task, but that the way they accomplish it shows clear heritage.

        Developing processes to successfully solve problems is 90% of the work involved in software development. Processes are where the money goes when a company invests in development and processes are the property they company owns when it's done. The literal code is just a particular expression of those processes.

        To use your novel example for comparison, you can write a story about a child who discovers he's a wizard, joins a prestigious academy of magic and foils the evil plans of the bad guy who killed his parents if you want with no legal problems, but if you include the same plot twists and narrative elements as Harry Potter then it doesn't matter how different your choice of literal words were, you non-literally copied someone else's work and you've broken the law. That level of similarity is what the law requires, and what was evidently demonstrated during the case.

        In another article on this I quoted Bob Zeidman, a well-known software intellectual property expert, who said in relation to this case: "nonliteral infringement is a long-standing and universally accepted result of copyright law and a legitimate reason for finding software copyright infringement".

          I get your point, but I didn't really mean that the premise of non-literal copying is a crock, more so the fact they're trying to pin it on him. I mean, there's only so many ways that some functions can be written, and it shouldn't be surprising to find that 2 different things written by the same person would have similarities. If it was someone else who wrote one of them, sure.
          In a very simplified example for instance, there's only so many ways you can write a x b x c = d. ;)

            Fair enough. Having been in a similar position before I think this is something Carmack should have been conscious of, though. It's a pain sometimes to have to find a different process to solve the same problem but it's necessary, otherwise you're basically copying the process from one company into the next and if it's a valuable process it's bad ground under the law.

              Really what it comes down to is that Carmack should probably not have been writing that code again at all. It's no different to the cleanroom approach big proprietary software companies use to try and avoid their products being 'infected' with eg. GPL (and conversely how emulators like Wine avoid being accused of stealing Windows libraries). One person looks at the code and describes how it solves a problem to another, who then implements it.

    All the text describing Carmack's claim is completely absent any reason given by Zenimax, and seems to imply they just said "no, kthxbye". It seems pretty unlikely that's the case, Zenimax isn't going to just outright violate contract terms without a reason, even a flimsy one.

    Perhaps Zenimax is holding the money as part payment of the amount Carmack was ordered to pay them in the first place. Who knows at this point. We'll need to see more info on this in time.

      Hey, Your doing it wrong! You have to hate Bethesda or Facebook, No level headed thoughts are allowed, Thats the way this works, Hmm, Crap, Who's side am i on? Evil corp i mean Facebook or the bad custodians of the beloved Fallout Ip.

      I did the last one, your turn to be the voice of logic for this one. Good luck with that :P

      But yeah, very one-sided article so far. Hopefully we'll find out more when Zenimax inevitably replies. Will be interesting to see the next chapter of the saga unfold.

    Wait, so he's owed $45 million in Zenimax stock? Or $22 mil? I'm confused.

    Contract law is riveting stuff.

    Though I did find it interesting that Yankee pleadings are far more conversational in tone than Aussie ones.

    Zenimax sound like a bunch of d&*kheads.

      We've only heard Carmack's side so far, I think it's a little early to judge on this case.

    He's suing them because they haven't done something they are not contractually obliged to have done until June 23, 2017? Sounds like a winner of a case to me.

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