As you probably know, Epic Games and Silicon Knights maintain a dispute that has lasted more than three years over alleged “Fraud, Negligent Misrepresentation, Unfair Competition, Breach of Contract, and Breach of Warranty” in regards to the use of Epic’s Unreal Engine within the Too Human development cycle. Basically, the canadian developer claims Epic wasn’t exactly honest when it comes to the handling of its engine license and wants a cut of Gears of War’s profit in return, because it has also been alleged that Epic funded the development of said game with licensing fees.
Turns out, the long case could be getting closer to an end, as the court claimed “…evidence regarding the basic nature of the parties’ businesses and the relationship between them establishes that Epic had a possible motive to deceive SK into entering into the License Agreement in order to fund the development costs of its own games and delay the work of SK and other competing licensees on their video games. There is also Epic’s admission in its counterclaim that it developed the [Unreal Engine 3] in conjunction with the development of its own game as part of its ‘synergistic model’ and not separately as it had led SK to believe.”
In addition, “Epic’s witnesses confirmed that at the time the License Agreement was in place, it never had any employees dedicated solely to servicing licensees and that, instead, every programmer on the engine team also had licensee support as a job function… This is, of course, in contrast to the alleged representations by Epic that its programmers would be divided between those dedicated to engine development and support, and those dedicated to development of Epic’s own games. Indeed, SK cites to internal emails from Epic’s officers instructing programmers that ‘Gears [of War] comes first, so if you have any Gears tasks, drop work in the main branch and finish Gears tasks’ and that ‘Right now, we are very much in ‘will this help Gears ship faster? If not, punt’ mode.'”
However, the court recently sided partially with Epic, stating there are “genuine issues of material fact” within SK’s claims regarding intentional interference and unjust enrichment, among others.
Behold the public statements made by both Silicon Knights and Epic Games:
Silicon Knights: When Epic first went public about our case to the press, they said that our claims were without merit. Two separate federal court judges have now disagreed with Epic, and have ruled that the case does have merit. Silicon Knights has always wanted to have our focus be on making great games, not litigation. This ruling will allow us to have our day in court, before a jury, and to shine the light publicly on Epic’s conduct. We are very confident the jury will see the truth behind Epic’s actions.
Epic Games: 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 favor 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.