Canadian-based Silicon Knights developed action RPG Too Human using Epic’s Unreal Engine 3 after buying the rights from them in 2005. Unfortunately, the game received poor reviews and was not as successful as other games that have used Epic’s Unreal Engine, such as the Batman: Arkham series and the King’s Quest reboot. This sparked an ugly legal battle between the companies.
In 2007, Silicon Knights took Epic Games to court, claiming that Epic had breached their contract by using royalties from third parties developing on the Unreal 3 engine to improve their games -- and was doing so to the detriment of those third parties.
Silicon Knights’ main bugbear was Epic’s successful Gears of War, which they saw as a direct competitor to Too Human. They believed that the refinements Epic did to the Unreal engine to make Gears of War were, in effect, an upgrade -- which Silicon Knights had the rights to use. Epic argued that these enhancements were “game specific” and did not require being shared. Silicon Knights also claimed that they had to start the game from scratch without using the Unreal Engine, as their version of the development toolkit was rendered unusable.
Epic Games then countersued, claiming that in developing their own engine, Silicon Knights had blatantly copied Epic’s Unreal Engine code. The jury completely brought Silicon Knights down, and they were ordered to destroy the engine built for Too Human and pay $4.45 million in damages.
This shows how careful a games company should be if they’re considering court action – it’s all too easy for the case to be turned on its head!