Epic Games Wins Lawsuit With Silicon Knights [UPDATED]

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Posted by patrickklepek (5534 posts) -

UPDATE: In addition to simply "winning" the lawsuit, Epic Games has been awarded damages totaling $4.45 million.

One has to wonder where that $4.45 million will actually come from, and if Silicon Knights ever envisioned a scenario where they would suddenly owe money.

"We are delighted with the jury's verdict," said Epic Games general counsel Jay Andrews in a statement.

I'm also able to share some BREAKING NEWS, courtesy of $2.30 that I just spent searching for court documents related to the case. Because the court charges you regardless of whether you find anything interesting, I'm sharing them with you now.

On May 29 and May 30, the court spent $251.24 in lunches for jurors--$99.23 on May 29 and $152.01 on May 30.

Scandalous.

--

Too Human, intended as a trilogy of games, never made it past the first game.

Silicon Knights filed a lawsuit against Epic Games in 2007 over a dispute with Unreal Engine 3 and the development of Too Human, and according to Epic Games CEO Mark Rein, Epic Games won.

"Case over,” said Rein on Twitter. “Jury finds for Epic on all counts.”

The Too Human developer was arguing breach of contract, which reportedly impacted the game’s development and Silicon Knights’ ability to properly deliver the game.

"Rather than provide support to Silicon Knights and Epic’s other many licensees of the Engine,” read the original lawsuit filing, “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."

In essence, Silicon Knights was upset Epic Games was spending its time perfecting its own games (and thus, its own engine) rather than spending all its time helping out those who licensed its engine.

The problems prompted Silicon Knights to begin developing its own multi-platform engine.

“Epic’s actions and the consequent increasing delay and cost of development of Silicon Knights’ own game," argued the studio, "caused by the unworkable Engine forced Silicon Knights in May of 2006 to embark on the time and resource intensive task of writing its own game engine, the very task it had hoped to avoid be entering the Agreement with Epic."

The latest game released by Silicon Knights was the poorly received X-Men: Destiny.

Online
#1 Posted by patrickklepek (5534 posts) -

UPDATE: In addition to simply "winning" the lawsuit, Epic Games has been awarded damages totaling $4.45 million.

One has to wonder where that $4.45 million will actually come from, and if Silicon Knights ever envisioned a scenario where they would suddenly owe money.

"We are delighted with the jury's verdict," said Epic Games general counsel Jay Andrews in a statement.

I'm also able to share some BREAKING NEWS, courtesy of $2.30 that I just spent searching for court documents related to the case. Because the court charges you regardless of whether you find anything interesting, I'm sharing them with you now.

On May 29 and May 30, the court spent $251.24 in lunches for jurors--$99.23 on May 29 and $152.01 on May 30.

Scandalous.

--

Too Human, intended as a trilogy of games, never made it past the first game.

Silicon Knights filed a lawsuit against Epic Games in 2007 over a dispute with Unreal Engine 3 and the development of Too Human, and according to Epic Games CEO Mark Rein, Epic Games won.

"Case over,” said Rein on Twitter. “Jury finds for Epic on all counts.”

The Too Human developer was arguing breach of contract, which reportedly impacted the game’s development and Silicon Knights’ ability to properly deliver the game.

"Rather than provide support to Silicon Knights and Epic’s other many licensees of the Engine,” read the original lawsuit filing, “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."

In essence, Silicon Knights was upset Epic Games was spending its time perfecting its own games (and thus, its own engine) rather than spending all its time helping out those who licensed its engine.

The problems prompted Silicon Knights to begin developing its own multi-platform engine.

“Epic’s actions and the consequent increasing delay and cost of development of Silicon Knights’ own game," argued the studio, "caused by the unworkable Engine forced Silicon Knights in May of 2006 to embark on the time and resource intensive task of writing its own game engine, the very task it had hoped to avoid be entering the Agreement with Epic."

The latest game released by Silicon Knights was the poorly received X-Men: Destiny.

Online
#2 Edited by PXAbstraction (343 posts) -

Kind of not surprised but this definitely can't help Silicon Knights which are already hurting. Given that they're the only ones that actually sued Epic though, it seems they were largely alone in their claims toward them. And since their claims only ended up being worth $1 each, I don't think they had the best lawyers either.

#3 Posted by tsigo (102 posts) -

I'm no lawyer, but my arguments for Epic would have consisted of listing out every game using the Unreal engine that released successfully, and then maybe calling SK a bunch of whiners.

#4 Posted by Sweep (8922 posts) -

Denis Dyack can't seem to catch a break, huh?

Moderator
#5 Posted by MildMolasses (3224 posts) -

This never made sense. As others have pointed out, there are a ton of games that use UE3 without complaints from their developers. And if anything, the work that Epic does with it's own games only serves as an advertising tool for others to see what can be done with their product. They are for the most part at this point in the business of creating and licensing game engines

#6 Posted by JeanLuc (3590 posts) -

I can't claim to know the full story but I have to side with Epic here. They put out the engine for use and then started making a game with it, None of that I find very bad. Just because Silicon Knights couldn't figure out the engine isn't a reason to sue. Just don't use Epic's engines anymore if you have a problem with it.

#7 Posted by ArbitraryWater (11909 posts) -

Well, this is pretty much the nail in the coffin for Silicon Knights, as if X-Men Destiny wasn't already. Oh well. It's not like a studio that released a mind-blowing 2 (two) games last decade should have stayed afloat as long as it did.

#8 Edited by onan (1286 posts) -

In an alternate reality where Silicon Knights won this case, Crayola must be quaking in their boots at the door this is opening wide for parents to sue them for the shitty drawings their kids made.

#9 Posted by iAmJohn (6128 posts) -

Oh man, Denis Dyack is fuuuuuuuuuuuuucked.

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#10 Posted by boylie (305 posts) -

Looks like SK won't be getting that dollar after all

#11 Posted by brownsfantb (398 posts) -

Really just seemed like SK were upset their game tanked while Epic's sold millions. If this was such a problem, wouldn't other devs have come forward too?

#12 Posted by whatisdelicious (1227 posts) -

I don't know. That "in essence" paragraph was maybe a little biased, as was the implication of tacking on "the poorly received X-Men Origins." I'd be interested in hearing why the jury ruled in Epic Games' favor, not a tweet by Mark Rein and then a skewed recount of the basis for the case. It never felt to me like Silicon Knights was expecting Epic to spend "all its time" on its licensees. It just felt like they expected a base level of service.

SK: "Hey, that engine you guys built that we're paying to license isn't working so well and it's really stunting development of our game."

EG: "Yeahhhh... See, we're kind of busy right now... Gears of War and all... So..."

That's the picture I have in my mind of all this, so I'd really like to hear how the case actually went.

#13 Edited by fox01313 (5080 posts) -

SK just needs to put out another Kain/Soul Reaver game to put it back on putting out better games again (or just doing an updated/HD version of Eternal Darkness for other systems).

#14 Posted by patrickklepek (5534 posts) -

@whatisdelicious said:

I don't know. That "in essence" paragraph was maybe a little biased, as was the implication of tacking on "the poorly received X-Men Origins." I'd be interested in hearing why the jury ruled in Epic Games' favor, not a tweet by Mark Rein and then a skewed recount of the basis for the case. It never felt to me like Silicon Knights was expecting Epic to spend "all its time" on its licensees. It just felt like they expected a base level of service.

SK: "Hey, that engine you guys built that we're paying to license isn't working so well and it's really stunting development of our game."

EG: "Yeahhhh... See, we're kind of busy right now... Gears of War and all... So..."

That's the picture I have in my mind of all this, so I'd really like to hear how the case actually went.

Same. I'll see what I can dig up on it, but Epic Games, at least in public, has always been pretty clear that their engines are never optimized until they ship a game. Perhaps it was different in private.

Online
#15 Posted by ZombiePie (5708 posts) -

Unreal has problems but it's hardly "unworkable" as Silicon Knights characterized in their lawsuit. That said Silicon Knights deserves a comeback of any sort, because I really want to play Eternal Darkness 2. 

Moderator
#16 Edited by stalefishies (335 posts) -

I don't think it's possible for me to read or hear the words 'Too Human' any more without adding a 'motherfucker' at the end. 

#17 Posted by whatisdelicious (1227 posts) -

@patrickklepek: That's pretty interesting to hear. Seems almost like a waste to license their engine until they've shipped their first game, and casts SK's complaints in a completely new light. If that's true, they probably should've expected this. But I'm unfamiliar with how public cases like this are; is it public record? Or does it just depend on how much SK or EG are willing to say about it?

#18 Posted by Paindamnation (807 posts) -

Too Human was a piece of shit.

#19 Posted by TheBrainninja (191 posts) -

@Sweep: Well, he is, after all, "Owned by GAF."

#20 Posted by fustacluck (95 posts) -

@fox01313 said:

SK just needs to put out another Kain/Soul Reaver game to put it back on putting out better games again.

I'd rather Crystal Dynamics found a team proven competent in dealing with modern games, rather than a team more experienced in litigation in this generation and struggling to create games that, at best, belong in the last.

#21 Posted by Godak (166 posts) -

Does anyone know if any pertinent details from the contract itself have been released to the public? Silicon Knights were, of course, attempting to make it out that Epic had done them a disservice, and the court decreed that it was not so. However, just out of curiosity, I would like to see tidbits of information from the actual legal document. I am not well-versed in the intricacies of these types of binding contracts, so I don't even know if it would be legal for any excerpts to be made public.

So, yeah, is there anything floating around on the interwebz?

#22 Posted by Ravenlight (8040 posts) -

@Sweep said:

Denis Dyack can't seem to catch a break, huh?

More like Denis Cryack. ZING!

#23 Posted by MrKlorox (11209 posts) -
@Godak: I don't see anything yet, but you can probably bet that if something did make it out that it would appear on Gamepolitics.com. They occasionally post transcripts or excerpts from court cases such as the occasional SCOTUS hearing. This seems like something they would be paying attention to.
#24 Posted by allworkandlowpay (874 posts) -

@JeanLuc said:

I can't claim to know the full story but I have to side with Epic here. They put out the engine for use and then started making a game with it, None of that I find very bad. Just because Silicon Knights couldn't figure out the engine isn't a reason to sue. Just don't use Epic's engines anymore if you have a problem with it.

I think, and I'm not positive on this so don't quote me, Silicon's Knights claim was that Epic was holding back an integral update to the engine that resolved many of the early issues with the engine, while quietly using that updated engine to make their own game first. Silicon Knights was claiming that they did this with the intent to make other Unreal engine games look inferior to Epics own game.

According to Silicon Knights at least, there was part of the contract of usage for the engine that stated there would be timely and non-preferential release of any updates to the engine as made available. Epic allegedly breached that contract, which Silicon Knights claims led to their failure of the project.

They are probably right, partially, about Epic's misuse of their engine improvements. The problem is proving it. Silicon Knights failed to do so, the case was practically shut month ago.

#25 Posted by alternate (2715 posts) -

Your Honour, I am a lawyer ... and that looks fucked up. Defense Rests.

#26 Posted by PiltdownMan (76 posts) -

I just want Eternal Darkness 2.

#27 Posted by Chris2KLee (2337 posts) -

I imagine an appeal is probably in the process, but this does not bode well for Silicon Knights. They've been in rough waters for awhile now, and the cost of this court case and it's loss might just be the thing that sinks them.

#28 Posted by TadThuggish (908 posts) -

Ten bucks says Denis Dyack is challening NeoGAF board members to real-life fights, at this very moment.

#29 Edited by Brackynews (4094 posts) -

So that seemed pretty fast and straightforward.

@tsigo: Whaddya talkin about? That's exactly the kind of dick move Matlock is known for. ;)

@Godak: Once the court dockets are made public, I expect you can locate them here: gamepolitics.com/category/court-cases Lots of contracts get unsealed, it just depends on the context. Even if the full contract is not included, there's a possibility someone could make a successful freedom of information request for all case documents.

#30 Edited by GalacticPunt (1076 posts) -

This is a decidedly non-gansta end to the tale. If Dyack wants to bring that shit, let's bring that shit!

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#31 Posted by Brodehouse (10072 posts) -

@allworkandlowpay said:

@JeanLuc said:

I can't claim to know the full story but I have to side with Epic here. They put out the engine for use and then started making a game with it, None of that I find very bad. Just because Silicon Knights couldn't figure out the engine isn't a reason to sue. Just don't use Epic's engines anymore if you have a problem with it.

I think, and I'm not positive on this so don't quote me, Silicon's Knights claim was that Epic was holding back an integral update to the engine that resolved many of the early issues with the engine, while quietly using that updated engine to make their own game first. Silicon Knights was claiming that they did this with the intent to make other Unreal engine games look inferior to Epics own game.

According to Silicon Knights at least, there was part of the contract of usage for the engine that stated there would be timely and non-preferential release of any updates to the engine as made available. Epic allegedly breached that contract, which Silicon Knights claims led to their failure of the project.

They are probably right, partially, about Epic's misuse of their engine improvements. The problem is proving it. Silicon Knights failed to do so, the case was practically shut month ago.

Exactly. I don't think that Dyack wouldn't have a case, but he clearly needs better evidence.

#32 Posted by BonOrbitz (2212 posts) -

@PiltdownMan said:

I just want Eternal Darkness 2.

I do too, but how do we know that SK would make a good Eternal Darkness 2? A lot has changed in 10 years...

#33 Posted by fox01313 (5080 posts) -

@fustacluck: Need more coffee, somehow got the games done by Silicon Knights mixed with Crystal Dynamics. Agreed with you on Crystal Dynamics getting a good team together for today's games though wondering about how well the new Tomb Raider game will go once it's out.

#34 Posted by biospank (660 posts) -
@Sweep said:

Denis Dyack can't seem to catch a break, huh?

Nope and it sucks because he and his team made good games. 
I miss eternal darkness tbh.
#35 Edited by PHARAOH (128 posts) -

@PXAbstraction:

Well the makers of too human is right how can you sell a product thats not finished. Epic sells unreal tech that they havent finished yet. what are the developers to do? They shouldnt be able to sell their product if its not done yet. The better question is why the hell is epic selling a unfinished product in the first place. Thats what really pissed denis off. Hes trying to make a game and they are selling him broken crap thats not finished and broken. And given the Xbox 360 crazy certification methods and making developers use directx. He really couldnt make his game because epic left him out to dry for so long.

I do believe the first masseffect isnt a true unreal game. The developer had to add its own tech into the unreal engine to fix some of the short commings. That kind of defeats the purpose of buying a engine.

#36 Posted by Norusdog (347 posts) -

so that's what it comes down too? you make a shitty game now-a-days so you blame and sue the creators of the engine you used? dumbshits.

#37 Posted by vinsanityv22 (1064 posts) -

I'm not surprised - TONS of studios licensed Unreal 3 this generation, and yet Silicon Knights were the only ones to have problems and complain about it. I was pretty sure Epic was in the right here, when no one else complains. But man, SK...this CANNOT be good for them.

They should've gone running back to Nintendo and make a sequel to Eternal Darkness after Too Human. Make a game guaranteed to sell, get back on stable ground. They have to be in a shaky place now, after Too Human, X-Men and now this. Ugh.

#38 Posted by GERALTITUDE (3428 posts) -

Patrick you da man but sometimes you make go aaaarrggh!!

Silcon Knights was NOT, "In essence [...] upset Epic Games was spending its time perfecting its own games (and thus, its own engine) rather than spending all its time helping out those who licensed its engine." As you quoted just previous to this statement the issue was in "intentionally and wrongfully using the fees".

When you license an engine you pay fees (often recurring) for support, "patches," etc. Sounds like SK were in the wrong here but this is actually such a huge problem in IT everywhere. Companies DO want to license their engines, they DO NOT want their licensees to be as successful as they are. Which is fine! But it creates lots and lots and lots of gray area to be abused.

#39 Posted by notBowen (23 posts) -

I liked this game dammit. Dual pistols that shot glass.

Just play it exclusively co-op and it cuts out all the horrible story. Techno-Viking Diablo.

#40 Posted by DukeOfStress (4 posts) -

@onan: If that were the case, crayola would also be making bucket-loads of cash as each kid using crayola crayons has to pay a licensing fee just to make a picture :)

#41 Posted by Krakn3Dfx (2498 posts) -

I'm disappointed that this wasn't a prolonged case, and that it wasn't televised. I want to see Dyack get on the stand and talk.

About anything. That guy is super entertaining. It's like anytime they interview Charles Manson, I can't look away.

#42 Posted by Suigyoken (188 posts) -

I'd hate to see what the court fees would do to Silicon Knights, them already being in the red from you know, releasing crap.

#43 Posted by MacEG (256 posts) -

@GERALTITUDE said:

Companies DO want to license their engines, they DO NOT want their licensees to be as successful as they are. Which is fine! But it creates lots and lots and lots of gray area to be abused.

That doesn't make much sense. The more successful a company is that uses Unreal (read: $), the more money Epic makes from the residuals.

http://udk.com/licensing

#44 Posted by Getz (3098 posts) -

I'd like to know if Epic actively went about sabotaging their development, or if Dyack is just pissed that they didn't want to help him make their game. 'Cause really, Epic's not beholden to any other Unreal Engine games so why would Silicon Knights be any different?

#45 Posted by Helios1337 (326 posts) -

@tsigo said:

I'm no lawyer, but my arguments for Epic would have consisted of listing out every game using the Unreal engine that released successfully, and then maybe calling SK a bunch of whiners.

I was thinking the same thing, every other game this generation is running that engine and we haven't heard any other horror stories about it.

#46 Posted by MonkeyKing1969 (2894 posts) -

@Sweep said:

Denis Dyack can't seem to catch a break, huh?

I think most people think Denis makes his own problems.. Most industry people seem to roll their eyes when they talk about him. He is the quintessential "Who the hell needs a baby when this bath water is so dirty" type of guy. Oh, people like when he talks because you see the train wreck twisting down the track behind him, but he really adds little to any discussion of gaming or the industry.

#47 Posted by CornBREDX (5610 posts) -

Despite them making one game worth knowing about, I kind of don't like these guys. They seem to blame other people for their failures a lot.

Bite the bullet and take responsibility for your losses.

#48 Posted by onan (1286 posts) -

@DukeOfStress said:

@onan: If that were the case, crayola would also be making bucket-loads of cash as each kid using crayola crayons has to pay a licensing fee just to make a picture :)

And Fisher Price would make a killing on the buckets.

#49 Posted by Shimmy (184 posts) -

@TadThuggish said:

Ten bucks says Denis Dyack is challening NeoGAF board members to real-life fights, at this very moment.

I don't want to take the bet, I just hope that this is happening.

#50 Posted by allworkandlowpay (874 posts) -

@MacEG said:

@GERALTITUDE said:

Companies DO want to license their engines, they DO NOT want their licensees to be as successful as they are. Which is fine! But it creates lots and lots and lots of gray area to be abused.

That doesn't make much sense. The more successful a company is that uses Unreal (read: $), the more money Epic makes from the residuals.

http://udk.com/licensing

It makes sense if you consider what Epic's game is really: a marketing platform. While it is in the best interest of Epic to support the companies already utilizing their product to make the most of of out; it is equally as importance to maximize conversion of new developers. You want your flagship to look bigger and better than everything else. You even want it to stand out from the sea of other games using the same product. You want it to scream: "THIS IS WHAT YOU CAN DO WITH ALL THIS POWER."

The desire to get more converts could lead to some less than honorable activities. Activities like withholding vital performance upgrades to give your showcase the edge.

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