Epic Games has informed Next-Gen that Too Human developer Silicon Knights is suing the Gears of War developer for fraud, breach of contract and other claims.
Epic VP Mark Rein sent an e-mail to various press outlets today which stated, "This morning we were served with a lawsuit by Silicon Knights. We believe the claims against us are unfounded and without merit and we intend to fully defend against them."
Silicon Knights, which is currently developing the anticipated Xbox 360 title Too Human, is licensing Epic's Unreal Engine 3 for development of that title.
"We'd love to tell you more about it but unfortunately our lawyers want us to save our comments for the courthouse so we're going to do our best to comply with their wishes," Rein added. "In that vein we'd appreciate if our friends in the industry and media would refrain from asking us about the suit because we're only going to say 'no comment.' We just wanted to share the news directly before the rumor mill starts churning."
Back in the summer of 2006, a rumor circulated which said Silicon Knights would be dumping the Unreal Engine 3 for Too Human. Too Human publisher Microsoft quickly debunked the rumor. Now it appears that that rumor had a factual foundation.
Silicon Knights issued a statement to Next-Gen outlining its qualms with Epic. The lawsuit claims that Silicon Knights lost revenues due to the delay of Too Human. That delay was allegedly caused by Unreal Engine 3.
Silicon Knights stated that the popular Unreal Engine 3 "did not work as Epic represented it would and, moreover, Epic has been unable or unwilling to fix it."
The lawsuit against Epic also claims that Epic "never intended to deliver Unreal Engine 3 as a fully functional game engine as promised." Silicon Knights accuses Epic of licensing the game engine simply to collect fees from developers in order to fund the development of Gears of War.
Silicon Knights president Denis Dyack stated, “No doubt Gears is a fun and phenomenally successful game, but as we alleged in our complaint against them, we strongly believe that from the perspective of someone waiting for a game engine that Epic promised it would deliver almost two years ago, it seems pretty clear that Gears was built on the backs of the Unreal Engine licensees. We certainly stand by our allegations in the lawsuit that instead of using our licensing fees to develop and support the Unreal Engine 3, Epic used that money to build Gears."
He added, "We have had extensive problems with the Unreal Engine 3 that Epic has been unwilling or unable to rectify. For more than a year, we have been trying to reach an agreement with Epic to resolve these issues without resorting to litigation, but were unable to come to reasonable terms with Epic. Regrettably, we are now forced to go to court in order to achieve satisfaction. We remain hopeful, however, that we can reach a reasonable business resolution with Epic at some point.”
Next-Gen obtained a full copy of the 50-plus page lawsuit from Silicon Knights, which is actively distributing the document to news outlets. The suit also said that Silicon Knights has resorted to developing its own game engine. From the lawsuit: "Epic violated the Agreement with Silicon Knights by, among other things, failing to provide a working game engine, which has caused Silicon Knights to experience considerable losses and ultimately has forced Silicon Knights to spend its limited time and resources on building its own game engine rather than in developing its video game."
We contacted Silicon Knights' lawyer Chris Holland, who's a partner with San Francisco's Krieg, Keller, Sloan, Reilley and Roman. He said that he that the parties involved will soon be able to comment further, but right now the suit is too fresh to get into more details. "We stand strongly behind the allegations," Holland said in a phone interview.
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