We previously reported Silicon Knight’s lawsuit against Epic which basically alleged that Epic was committing industry sabotage. Well, Epic recently responded to Silicon Knight’s complaint with a big, fat motion to dismiss and a bigger, fatter countersuit alleging that SK infringed its copyrights and breached its contract with Epic. The countersuit claims that Silicon Knights created a new Too Human engine based on the Unreal Engine 3, thereby producing an unlawful, derivative work, and that SK also breached its contract agreement by using this new engine in both Too Human and an upcoming game co-developed with Sega.

Epic is requesting actual damages in excess of $650,000, unspecified punitive damages, attorney fees, injunctive relief, and an order to destroy all code or games that infringe Epic’s copyrights.

If the injunctive relief is granted, SK’s ill-fated Too Human could be postponed for years while litigation continues. Hope nobody was planning on getting their hands on Too Human anytime in the near future… or ever, if Epic gets their way.

[UPDATE] GameDaily received a press release from Epic and is currently combing through the lengthy legal documents.  It looks like Epic is making far more claims that initially reported by Gamespot.  Keep an eye out on both GameDaily and Laws of Play as the case develops.

For more info, see: ugh, Gamespot

Silicon Knights, creators of Eternal Darkness: Sanity’s Requiem, recently filed suit against Epic Games claiming that Epic misrepresented the abilities of their money-printing Unreal Engine 3 when selling the license agreement for the engine to Silicon Knights. Silicon Knights claims that Epic provided developers with a dumbed-down version of the Unreal Engine 3 while advertising its abilities using a more complete version of the engine featured in Epic’s million-selling game Gears of War. The lawsuit further cites fraud, intentional interference with contractual relations, misrepresentation, intentional interference with prospective economic advantage, breach of warranty, and a violation of North Carolina’s unfair and deceptive trade practices act as causes of action.

Silicon Knights is seeking damages equivalent to revenue lost as a result of the considerable delay in developing its video game, Too Human.

In response to the suit, Epic’s Vice President, Mark Rein, sent out a press release saying that, “[Epic's executives] believe the claims against [them] are unfounded and without merit and [they] intend to fully defend against them.”

The lawsuit is being handled by Chris Holland of Krieg, Keller, Sloan, Reilley & Roman, LLP in San Francisco, California.

If the allegations are true, Epic could have a serious problem on their hands. With the immense popularity of the Unreal Engine 3, Epic could be looking at a potentially large class action lawsuit if some of the other 100+ Unreal Engine 3 licensees step forward to support Silicon Knights. Stay tuned to Laws of Play!

[Update] – Gamasutra has gotten their hands on the actual complaint and posted a summary of the main allegations:

The suit initially alleges 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.”

It goes on to detail a number of specific alleged breaches of contract, particularly related to the delivery of Xbox 360 versions of the Unreal Engine 3 code. Epic’s licensing document stated that a functional version of the engine would be available within 6 months of development kits being available.

Silicon Knights claims: “The final development kit for the Xbox 360 was released in early September, 2005, such that Epic was obligated to release the functional Engine for that platform no later than March, 2006.”

The suit continues: “However, that deadline came and went without Epic providing Silicon Knights with a functional version of the Engine. Indeed, it was not until much later (November, 2006, far too late for time and cost-sensitive projects like SK’s videogames) that Epic ever provided anything resembling working Xbox 360 code to its licensees. Even at that belated date, though, Epic did not provide any guidance to licensees in how to implement the code it finally released.”

For more info, see: Kotaku
Gamasutra