Epic Games: We will be vindicated in court

Epic Games has returned fire on a string of extraordinary accusations issued by Canadian studio Silicon Knights.

Both companies are at advanced stages of a bitter legal row regarding an Unreal Engine licence.

Epic Games said it “remains confident that it will be fully vindicated at trial”.

The full statement, issued to Develop, can be found below.

Earlier, Silicon Knights president Denis Dyack said he is looking forward to his day in court, where he can “shine the light publicly on Epic’s conduct”.

The Canadian studio alleges that Epic Games caused it to “experience considerable losses” by not initially supplying a full Unreal Engine for the Too Human project. It wants a proportion of profits made by Epic’s flagship title, Gears Of War, as compensation. More details can be found here.

On March 24th, a district court found that the matter needs to be put to a jury – something that Dyack suggested went in his favour and validated the credibility of his claims.

“It allows us to have our day in court,” he said.

Yet Epic claims that the move to put the issue before a jury is a matter of legal procedure, and not necessarily a vindication of allegations against the Unreal Engine firm.

Epic said: “The court was not permitted to judge the credibility of witnesses or evidence, or otherwise take into account Epic’s opposing evidence, and therefore merely acknowledged that, under the rules of civil procedure, it had to allow a jury to consider both sides’ evidence on the remaining claims.

“Allowing those claims to move forward to a jury is not a ruling on their merits. The court simply concluded that the disputed evidence should be heard and resolved by the jury.”

The court entered judgment in favour of Epic on several occasions, Epic claimed.

“[The court] rejected Silicon Knights’ claims that it could cancel its license agreement, that Epic interfered with its contractual relationships with publishers, and that Epic has acted unjustly under the license,” Epic said.

“The court did not rule on the merits of Silicon Knights’ remaining claims.”

Countersuit

Epic went on to allege that the court has already rejected a previous Silicon Knights’ motion to summarily dismiss Epic’s claims against it.

The unreal Engine vendor is thought to be counter-suing Silicon Knights to the tune of at least $650,000 – this is on the arguement that Silicon Knights had used the Unreal Engine as it pleased without any cost.

Silicon Knights licensed the Unreal Engine for the Xbox 360 Too Human project. It had modified the technology and rechristened it the Silicon Knights Engine. The question of whom the engine belongs to is thought to be central to the legal dispute.

Last week the district court had “upheld Epic’s right to present all of its claims to a jury, including claims that Silicon Knights breached its license agreement, stole Epic’s technology and infringed Epic’s copyrights”, Epic said.

Frosty relationship

In May 2005 Silicon Knights announced it would be exclusively using Epic’s Unreal Engine 3 for next-gen projects.

Too Human had been in development across multiple platforms for over six years before the studio went in full production on an Xbox 360 edition of the game.

It is believed that at the outset of the 360 project, work was carried out on incomplete versions of the Unreal Engine. Silicon Knights said it would be promised functional version of the engine no later than six months after the Xbox 360’s development kits were complete.

The dispute appeared to have turned bitter in May 2006 – allegedly two months after Epic’s final deadline for handing over a complete engine. That month, Silicon Knights presented Too Human to various journalists at E3, and the title drew in a largely negative response.

Dyack blamed Epic. He said that many aspects of the Unreal Engine were not functional.

The Too Human project, however, was exclusively locked to the Unreal Engine. Dyack elected to rewriting portions of the engine’s code so it would behave and deliver results in ways that Silicon Knights was more familiar with and expected.

The modifications were apparently transformative enough that it was renamed the Silicon Knights Engine.

In July the next year Silicon Knights sued Epic Games due to the "inadequacies" of the incomplete engine. In August, Epic Games counter-sued Silicon Knights, claiming that it was using its engine as it pleased without any cost.

Epic Games’ statement in full

“On March 24, 2011, the federal court in the lawsuit between Silicon Knights and Epic Games completed its ruling on the parties’ summary judgment motions to dismiss each other’s claims without a trial.

“The court entered judgment in favour of Epic on several claims, rejecting Silicon Knights’ claims that it could cancel its license agreement, that Epic interfered with its contractual relationships with publishers, and that Epic has acted unjustly under the license.

“The court did not rule on the merits of Silicon Knights’ remaining claims. The court was not permitted to judge the credibility of witnesses or evidence, or otherwise take into account Epic’s opposing evidence, and therefore merely acknowledged that, under the rules of civil procedure, it had to allow a jury to consider both sides’ evidence on the remaining claims.

“Allowing those claims to move forward to a jury is not a ruling on their merits. The court simply concluded that the disputed evidence should be heard and resolved by the jury.

“In addition, the court had previously rejected Silicon Knights’ motion to summarily dismiss Epic’s claims against it and upheld Epic’s right to present all of its claims to a jury, including claims that Silicon Knights breached its license agreement, stole Epic’s technology and infringed Epic’s copyrights.

“Epic remains confident that it will be fully vindicated at trial.”