Earlier today Epic Games VP Mark Rein sent a note to several news outlets, stating the Unreal Engine 3 creator is the subject of a lawsuit from licensee Silicon Knights regarding Unreal Engine 3 and Xbox 360 title Too Human.
Rein's statement, reads as follows: "This morning we were served with a lawsuit by Silicon Knights. We believe the claims against us are unfounded and without merit and we intend to fully defend against them."
"We'd love to tell you more about it but unfortunately our lawyers want us to save our comments for the courthouse so we're going to do our best to comply with their wishes."
He concludes: "In that vein we'd appreciate if our friends in the industry and media would refrain from asking us about the suit because we're only going to say "no comment". We just wanted to share the news directly before the rumor mill starts churning."
Later on, a copy of the lawsuit found its way to the internet. The lawsuit was filed in North Carolina district court and demands a jury trial on the grounds of breach of contract regarding Unreal Engine 3 licensing.
In their Lawsuit, Silicon Knights alleged that "Rather than provide support to Silicon Knights and Epic’s other many licensees of the Engine, Epic intentionally and wrongfully has used the fees from those licenses to launch its own game to widespread commercial success while simultaneously sabotaging efforts by Silicon Knights and others to develop their own video games".
Silicon Knights claims that Epic has failed to meet their deadline to deliver Xbox 360 versions of the Unreal Engine 3 code by more than 8 months. "That delivery date is significant, since compliance by Epic would have given Silicon Knights time to prepare an appropriate demonstration version of its Microsoft Xbox 360 game, Too Human, for the very important industry trade show, E3, two months later in May, 2006". Gears of War was nominated Best Game in E3 2006, while Too Human was criticized for technical problems and generally unpolished appearance. Silicon Knights claim that this was because Epic had kept the best version of Unreal Engine 3 for themselves to use in Gears of War only.
This has forced Silicon Knights and other UE3 licensees, the allegations continue, " to embark on the time and resource intensive task of writing its own game engine, the very task it had hoped to avoid be entering the Agreement with Epic".
In conclusion, Silicon Knights is legally suing Epic for Fraud/Fraudulent Inducement, Negligent Misrepresentation, Intentional Interference with Contractual Relations, Intentional Interference With Prospective Economic Advantage, Breach of Warranty, offences under the North Carolina Unfair and Deceptive Trade Practices Act, Common Law Unfair Competition, Unjust Enrichment, Rescission or Reformation of Alleged Contract, and Breach of Contract, as well as Declaratory Relief.
Silicon Knights then ask for the following to be ruled:
1 - The Agreement between Epic and Silicon Knights for a license to the Engine is null and void.
2 - Silicon Knights owes no obligations to Epic under any purported agreement by Silicon Knights to license the Engine.
3 - Silicon Knights is not required to use the Engine in developing any current or future games.
4 - Silicon Knights may alter the Engine without restriction.
5 - Silicon Knights is under no obligation to disclose or share any alterations Silicon Knights makes or causes to be made to the Engine with anyone, including Epic.
6 - Silicon Knights owes no monetary or other obligations to Epic and/or any of its business partners associated with the agreement to license the Engine.
7 - The game engine developed by Silicon Knights is totally independent of the Unreal Engine 3 and therefore is the sole property of Silicon Knights, or, alternatively, the game engine developed by Silicon Knights constitutes an "Enhancement" under the terms of the Agreement, and therefore is the sole property of Silicon Knights under the terms of that Agreement.
8 - Silicon Knights owes no obligations, financial or otherwise, to Epic in connection with and/or related to the Silicon Knights Engine.
