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Silicon Knights' Lawsuit Against Epic Gets Trial

By - Source: Kotaku | B 20 comments

The legal dispute between Silicon Knights and Epic Games is going before a jury.

The battle between developers Silicon Knights (SK) and Epic Games is about to reach epic proportions, as the legal dispute between the two parties over SK's Too Human game and the state of Epic's licensed Unreal Engine 3 (UE3) back in 2007 will finally be appearing before a jury thanks to a recent court order.

Previously Ontario-based Silicon Knights alleged that Epic Games, based in Raleigh, North Carolina, violated the UE3 licensing agreement by failing to provide a working game engine. Initially development on Too Human began on incomplete versions of UE3 in May 2005 with a promised stable version to arrive no later than six months after the Xbox 360 SDK was finalized. But in May 2006, two months after the deadline, SK still didn't receive what it considered as a working copy.

So rather than lose funding from Microsoft due to UE3-based delays, SK moved forward and created its own engine for Too Human. The developer then filed a lawsuit against Epic in 2007, accusing Epic of fraud, negligent misrepresentation, unfair competition, breach of contract, and breach of warranty.

In court papers uncovered this week, SK claims that Epic was "sabotaging" Unreal Engine 3 licensees by withholding an improved version of the engine while using the licensing income to fund its Gears of War franchise. The papers even reveal emails stating that-- rather than providing a team to focus on getting the engine up to working order and another separately working on the Gears of War and Unreal Tournament 3 projects-- all Epic programmers were to primarily focus on the games instead, ignoring its legal obligations to licensees.

"Epic's witnesses confirmed that at the time the License Agreement was in place, it never had any employees dedicated solely to servicing licensees and that, instead, every programmer on the engine team also had licensee support as a job function," court documents state. "This is, of course, in contrast to the alleged representations by Epic that its programmers would be divided between those dedicated to engine development and support, and those dedicated to development of Epic's own games. Indeed, SK cites to internal emails from Epic's officers instructing programmers that ‘Gears [of War] comes first, so if you have any Gears tasks, drop work in the main branch and finish Gears tasks' and that ‘Right now, we are very much in will this help Gears ship faster? If not, punt mode.'"

Although a federal court sided with Silicon Knights and has given a green light for a jury trial, the court dismissed some of the developer's claims, stating that "genuine issues of material fact exist" in regards to allegations of intentional interference, unjust enrichment and other accusations.

The problem for Epic is that SK may not be the only party involved in the jury trial. Disney's Buena Vista Games filed similar claims against the Gears of War developer back in 2006. The court documents state that Disney's certified letter "demonstrated that other [Unreal Engine] licensees expressed many of the very same frustrations that [Silicon Knights] did about representations made by Epic that were unfulfilled and perceived to be misleading."

"Evidence regarding the basic nature of the parties' businesses and the relationship between them establishes that Epic had a possible motive to deceive SK into entering into the License Agreement in order to fund the development costs of its own games and delay the work of SK and other competing licensees on their video games," the court states. "There is also Epic's admission in its counterclaim that it developed the [Unreal Engine 3] in conjunction with the development of its own game as part of its ‘synergistic model' and not separately as it had led SK to believe."

This is going to get nasty.

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  • 1 Hide
    wishmaster12 , March 31, 2011 11:00 PM
    Thats bad, very bad
  • 2 Hide
    happyballz , March 31, 2011 11:01 PM
    Don't really care if Epic gets disbanded (unlikely) or has to pay major settlements because of their schemes as they sold their souls right after the success of the original Unreal/Unreal Tournament.

    I swear every company that goes corporate ends up being a POS or involved in some kind of a nasty scheme.
  • 2 Hide
    restatement3dofted , March 31, 2011 11:02 PM
    Whoops. Probably should have had those conversations in person rather than by email, Epic.
  • 0 Hide
    jevon , April 1, 2011 12:43 AM
    Epic's in trouble on this one, as they should be. They did it to themselves, now they have to face the consequences!
  • 0 Hide
    FloKid , April 1, 2011 12:59 AM
    Maybe Epic knows how to use their engine better eh? : )
  • 0 Hide
    K3vBot6000 , April 1, 2011 1:07 AM
    Putting another company in that situation is wrong and I hope there is some kind of retribution.
  • 2 Hide
    alidan , April 1, 2011 5:37 AM
    FloKidMaybe Epic knows how to use their engine better eh? : )


    no boubt thats true. however, they gave out code for a non finalized vesion so people could work on games up till the code was finalized and have very little trouble moving to the finalized code specs. they failed to do that for long enough that SK had to make their own engine. and they have proof that epic made developers stop working on code for others to focus on gears.

    i hope that epic has to pay sk so much that they can make too human 2 as i like the game, and if the engine was fixed could be great, or at least great fun.
  • 0 Hide
    pocketdrummer , April 1, 2011 6:45 AM
    Unreal engines are great and all, but the recent trend of not supporting Anti-aliasing is unnerving. I'm pretty sure it has a lot to do with developers whoring out to console gamers...

    Either way, I can't wait until Valve finally works on (or finishes) the Source 2 Engine. I'm sure it will be amazing (especially since it will support all the latest goodies and work properly on PC... with raw mouse input, etc).
  • 5 Hide
    pocketdrummer , April 1, 2011 6:46 AM
    Oh, and...

    Epic FAIL!

    (c'mon, how did nobody say this already)
  • 0 Hide
    silverblue , April 1, 2011 12:02 PM
    pocketdrummerUnreal engines are great and all, but the recent trend of not supporting Anti-aliasing is unnerving. I'm pretty sure it has a lot to do with developers whoring out to console gamers...


    What's that got to do with anything? In any case, while console games have never been big users of anti-aliasing, it has been used for a good number of years.
  • 0 Hide
    nao1120 , April 1, 2011 12:33 PM
    Release another eternal darkness already!(good job on the lawsuit though)
  • 1 Hide
    rhino13 , April 1, 2011 12:55 PM
    I really do believe SK on this.
    Epic worked hard on Gears, they were able to do this because they had so much funding from SK on others who were paying them to deliver an engine; which they did not deliver.

    I mean lets face it: Epic doesn't have a huge incentitive to help a Gears competitor reach market at the same time.

    On the bright side Too Human now isn't based on the Unreal engine, and the further we move from that the better!
  • -1 Hide
    WyomingKnott , April 1, 2011 2:00 PM
    pocketdrummerOh, and...Epic FAIL!(c'mon, how did nobody say this already)

    Since +1/-1 is broken, here's a plus-one.
  • 0 Hide
    mchuf , April 1, 2011 3:25 PM
    Epic deserves to pay big time for screwing their customers. But honestly, the problems with Too Human have nothing to do with what engine it used. The game was bad and SK didn't deserve to make any money on that pos.
  • 0 Hide
    back_by_demand , April 1, 2011 3:30 PM
    WyomingKnottSince +1/-1 is broken, here's a plus-one.

    Google handed Tom's a legal threat for using "+1" when it's going to be the next big thing.

    I think Tom's should respond by replacing the +1 with "Like"
  • 0 Hide
    Aragorn , April 1, 2011 3:47 PM
    I don't understand all of these claims about +1/-1 being broken. I can use the buttons in IE 9 & 8 as well as Firefox 3.6 & 4
  • 0 Hide
    IncinX , April 1, 2011 3:59 PM
    Actually, if anyone has a chance, you should pickup TooHuman used or for cheap it is a really good game. It is unfortunate that it was a tad buggy because of problems like this.
  • 0 Hide
    eddieroolz , April 1, 2011 7:55 PM
    I feel sorry for SK. Epic really screwed them over.
  • 0 Hide
    WyomingKnott , April 2, 2011 1:34 AM
    Quote:
    I don't understand all of these claims about +1/-1 being broken. I can use the buttons in IE 9 & 8 as well as Firefox 3.6 & 4

    Almost checked my versions before I realized that you were April Fooling me.
  • 0 Hide
    WyomingKnott , April 2, 2011 1:35 AM
    Quote:
    Google handed Tom's a legal threat for using "+1" when it's going to be the next big thing.

    I think Tom's should respond by replacing the +1 with "Like"

    Did Google really? I'm glad my kid is in tenth grade now. Back in early math, she would have been sued every day. 4 + 1 = ?