Three weeks ago, Silicon Knights filed a lawsuit against Epic claiming that Epic didn't provide latest Unreal Engine 3 builds to its licensees, but rather used it to develop their own Gears of War. Today, Epic filed a counterclaim saying that "Silicon Knights wants to take Epic's licensed technology [UE3], pay nothing for it, and use it any way it pleases".
Epic's counterclaim accuses Silicon Knights of copyright infringement, breach of contract, misappropriation of trade secrets and "the imposition of a constructive trust" and seeks "injunctive relief, compensatory and punitive damages, the destruction of infringing goods, including infringing computer code and attorney's fees and costs" , which should be decided by court but not less than $650,000.
According to Epic, in August 2004 Silicon Knights signed an "evaluation agreement" and had full access to Unreal Engine 3 technology as well as Unreal Developers' Network support for 9 full months. During those 9 months, Silicon Knights accessed Unreal Engine documentation 2109 times before they decided to sign the official commercial licensing agreement in May 2005.
Moreover, Epic -allegedly- gave Silicon Knights a "substantial discount" on the license, as the firm promised Epic to use UE3 exclusively on all of its games for Xbox 360, PS3 and PC.
" The actual language of the License agreement says nothing about delivery of a "fully operational version" of the Unreal Engine 3 within six months of release of the Xbox 2. Nor does it say anything about a "commercially viable" version,"Epic's counterclaim states. "Rather, the warranty was significantly narrower and specified only that Epic would be able to "demonstrate" that its Unreal Engine 3 will operate on the Xbox 2 in the time specified. ... This did also not require that the Unreal Engine be free of glitches or compatible with SK's intended uses, or guarantee that glitches, defects or bugs in the system could be corrected."
Epic didn't forget to list various UE3-based games, both released and upcoming, that have received critical acclaim from various news outlets such as Irrational Games' BioShock, Bioware's Mass Effect, Webzen's Huxley, Ubisoft's Rainbow Six Vegas, Midway's Stranglehold and Naked Sky's Roboblitz.
