"Ozma vs. Salem" is a battle that occurred in the ancient past. It was shown in "The Lost Fable".
After their eldest daughter shows them that she is able to use magic, Ozma tells Salem the mission given to him by the God of Light, only for Salem to respond that there's no longer any point to redeeming Humanity. Instead, they should replace them with their own magical line. This prompts Ozma to attempt to sneak their daughters out of the castle, only for Salem to catch them, starting their battle.
The battle begins with Salem sending forth an energy beam, Ozma in turn counters with his own beam from his Staff. The colliding beams results in a bright light. The rest of their battle is not known, with only static images of them being seen. However, the intensity of their fight, as well as the multitude of magical attacks being thrown, causes massive damage to the structures. As the tower of the castle collapses, the Grimm look towards it, sensing the negative emotions.
The insuring battle ends with the castle being destroyed. As Ozma crawls away with a major wound, a pile of ash behind him glows, before reforming into Salem. Salem flips him on his back, condemning him for choosing his promise to the Gods over their family, and burns him alive, thus beginning the centuries-long feud between the two. It is implied that their children were killed in the battle.