The gears of litigation are churning for Epic Games, creator of hit game franchise Unreal Tournament and Gears of War.
After being sued by Canadian game developer Silicon Knights on July 19 over its Unreal Engine 3 technology, which Silicon Knights claims did not work as promised and has caused the delay of Microsoft’s Too Human for Xbox 360; Epic has filed a counterclaim in the U.S. District Court for the Eastern District of North Carolina.
According to the new suit, Epic claims that Silicon Knights decided to misappropriate Epic’s licensed technology. The local game maker also says Silicon Knights’ lawsuit lacks factual or legal merit. Epic is seeking injunctive relief, as well as compensatory damages in an amount to be proven at trial, but in any event in excess of $650,000.
Mark Rein, vice president of Epic Games, issued a statement that said the company has done nothing wrong. He added that Epic continues to be committed to fully defending against Silicon Knights’ allegations.
According to the lawsuit, Epic said the “plain language of Silicon Knights’ complaint makes clear that Silicon Knights wants to take Epic’s Licensed Technology, pay nothing for it, and use it any way it pleases.”
Epic is suing Silicon Knights for “copyright infringement, breach of contract, misappropriation of trade secrets, and for the imposition of a constructive trust, results from Silicon Knights’ wrongful conduct, which is continuing.” Epic is seeking “injunctive relief, compensatory and punitive damages, the destruction of infringing goods, including infringing computer code, and attorney’s fees and costs."
The lawsuit also reveals that Epic sold its Unreal Engine 3 to Silicon Knights at a “substantial discount” because thE game developer promised it would use Epic’s technology for all PC, PlayStation 3 and Xbox 360 games.
One of the main points of Silicon Knights’ lawsuit is that Epic delivered an engine that was not complete and not usable, which resulted in the delay of its Too Human game because they had to abandon Epic’s engine altogether and start the game over from scratch. The counterclaim by Epic states that “Silicon Knights knew when it committed to the licensing agreement that Unreal Engine 3 may not meet its requirements and may not be modified to meet them.”
Epic’s counterclaim also accuses Silicon Knights of copyright infringement and unauthorized use of Epic’s licensed technology of Unreal Engine 3 for its competing Silicon Knights Engine, which was in active development as early as May 2006.
Epic’s Unreal Engine 3 is currently the most popular licensed game engines in the world. Companies such as Electronic Arts, Activision, Midway, THQ, Sony Online Entertainment, Chair Entertainment, BioWare, and Gearbox Software are using the technology for games. Other companies, including Virtual Heroes in Research Triangle Park, are using the Unreal Engine 3 for Serious Games, such as the U.S. Army’s America’s Army game.
Unreal Engine 3 powers the best-selling Gears of War game, which is currently the best-selling franchise for Microsoft’s Xbox 360. Unreal Engine 3 also powers Midway Games’ upcoming Unreal Tournament 3, which Epic is creating for PS3 and PC this year and Xbox 360 next year.
Silicon Knights is the only licensee that has publicly complained about Epic’s technology and sued the company for it. Silicon Knights is standing by its lawsuit and its attorney, Christopher Holland of Krieg, Keller, Sloan, Reilley & Roman said that Epic’s counterclaim has no merit and that Silicon Knights has suffered damages in the millions of dollars as a result of Epic.
This lawsuit will have no impact on the upcoming Epic releases, Gears of War for Microsoft PC, Unreal Tournament 3 for PS3 and PC or Silicon Knights’ Too Human for Xbox 360 (although that delayed game has not received an actual release date).