Editing Silicon Knights (section)

==Lawsuit with Epic Games==
On July 19, 2007, Silicon Knights sued [[Epic Games]] for failure to "provide a working game engine", causing the Ontario-based game developer to "experience considerable losses."<ref>{{cite web |url=http://kotaku.com/280491/silicon-knights-epic-sabotaged-us |title=Silicon Knights: Epic Sabotaged Us |last=Crecente |first=Brian |date=July 19, 2007 |website=[[Kotaku]] |archive-url=https://web.archive.org/web/20090916170528/http://kotaku.com/280491/silicon-knights-epic-sabotaged-us |archive-date=September 16, 2009 |url-status=dead |access-date=November 15, 2017}}</ref> The suit alleged that Epic Games was "sabotaging" [[Unreal Engine 3]] licensees. Epic's licensing document stated that a working version of the engine would be available within six months of the Xbox 360 developer kits being released. Silicon Knights claimed that Epic not only missed this deadline, but that when a working version of the engine was eventually released, the documentation was insufficient. The game studio also claimed Epic had withheld vital improvements to the game engine, claiming they were "game specific", while also using licensing fees to fund development of its own titles rather than the engine itself.<ref>{{cite web |url=https://www.gamedeveloper.com/game-platforms/breaking-silicon-knights-files-lawsuit-against-epic |title=Breaking: Silicon Knights Files Lawsuit Against Epic |last=Carless |first=Simon |date=July 19, 2007 |website=[[Gamasutra]] |publisher=[[UBM TechWeb]] |access-date=August 24, 2016 |url-status=live |archive-url=https://web.archive.org/web/20160924053524/http://www.gamasutra.com/view/news/105711/Breaking_Silicon_Knights_Files_Lawsuit_Against_Epic.php |archive-date=September 24, 2016}}</ref>

In August 2007, Epic Games [[Counterclaim|counter-sued]] Silicon Knights, alleging the studio was aware when it signed on that certain features of Unreal Engine 3 were still in development and that components would continue to be developed and added as Epic completed work on ''[[Gears of War (video game)|Gears of War]]''. Therefore, in a statement, Epic said that "SK knew when it committed to the licensing agreement that Unreal Engine 3 may not meet its requirements and may not be modified to meet them."<ref name="gamedaily">{{cite web |url=http://www.gamedaily.com/articles/features/mark-rein-epic-games-did-nothing-wrong-silicon-knights-is-stealing/70780/ |title=Mark Rein: Epic Games Did Nothing Wrong; Silicon Knights is Stealing |last=Brightman |first=James |date=August 9, 2007 |website=[[GameDaily]] |archive-url=https://web.archive.org/web/20071122011316/http://www.gamedaily.com/articles/features/mark-rein-epic-games-did-nothing-wrong-silicon-knights-is-stealing/70780/ |archive-date=November 22, 2007 |url-status=dead |access-date=November 9, 2017}}</ref> Additionally, the counter-suit claimed that Silicon Knights had "made unauthorized use of Epic's Licensed Technology" and had "infringed and otherwise violated Epic's intellectual property rights, including Epic's copyrighted works, trade secrets, know how and confidential information" by incorporating Unreal Engine 3 code into its own engine.<ref name="gamedaily"/> Furthermore, Epic claimed the Canadian developer broke the contract by employing this derivative work in an internal title and a second game with [[Sega]],<ref name="gamesp">{{cite web |url=https://www.gamespot.com/articles/epic-games-countersues-silicon-knights/1100-6176435/ |title=Epic Games countersues Silicon Knights |last=Sinclair |first=Brendan |date=August 9, 2007 |website=[[GameSpot]] |archive-url=https://web.archive.org/web/20170928180703/https://www.gamespot.com/articles/epic-games-countersues-silicon-knights/1100-6176435/ |archive-date=September 28, 2017 |url-status=live |access-date=September 28, 2017}}</ref> a partnership for which it never received a license fee.<ref>{{cite web |url=http://www.next-gen.biz/index.php?option=com_content&task=view&id=7750&Itemid=2 |title=Epic's Motion to Dismiss UE3 Case Denied |last=Graft |first=Kris |date=October 31, 2007 |website=[[Next Generation (magazine)|Next Generation]] |archive-url=https://web.archive.org/web/20071103033242/http://www.next-gen.biz/index.php?option=com_content&task=view&id=7750&Itemid=2 |archive-date=November 3, 2007 |url-status=dead |access-date=December 20, 2017}}</ref>

On May 30, 2012, Epic Games prevailed against Silicon Knights' lawsuit, and won its counter-suit for $4.45 million on grounds of copyright infringement, misappropriation of trade secrets, and breach of contract,<ref name="Totilo"/> an injury award that was later doubled due to prejudgment interest, attorneys' fees and costs.<ref name="vg247"/> Consistent with Epic's counterclaims, the presiding judge, [[James C. Dever III]], stated that Silicon Knights had "deliberately and repeatedly copied thousands of lines of Epic Games' copyrighted code, and then attempted to conceal its wrongdoing by removing Epic Games' copyright notices and by disguising Epic Games' copyrighted code as Silicon Knights' own."<ref name="vg247">{{cite web |url=https://www.vg247.com/2012/11/09/epic-judgment-doubled-silicon-knights-ordered-to-pay-over-9-million/ |title=Epic judgment doubled, Silicon Knights ordered to pay over $9 million |last=Nunneley |first=Stephany |date=November 9, 2012 |website=[[VG247]] |publisher=[[Videogaming247]] |access-date=August 24, 2016 |url-status=live |archive-url=https://web.archive.org/web/20160808040934/http://www.vg247.com/2012/11/09/epic-judgment-doubled-silicon-knights-ordered-to-pay-over-9-million/ |archive-date=August 8, 2016}}</ref> Evidence against Silicon Knights was "overwhelming", said Dever, as it not only copied functional code but also "non-functional, internal comments Epic Games' programmers had left for themselves."<ref name="vg247"/>

As a result, on November 7, 2012, Silicon Knights was directed by the court to destroy all game code derived from Unreal Engine 3 and all information from licensee-restricted areas of Epic's Unreal Engine documentation website, and to permit Epic Games access to the company's servers and other devices to ensure these items had been removed. In addition, the studio was instructed to recall and destroy all unsold retail copies of games built with Unreal Engine 3 code, including ''[[Too Human]]'', ''[[X-Men Destiny]]'', ''The Sandman'', ''The Box''/''Ritualyst'', and ''Siren in the Maelstrom'' (the latter three titles were projects never released, or even officially announced).<ref>{{cite web |url=https://docs.justia.com/cases/federal/district-courts/north-carolina/ncedce/5:2007cv00275/89570/862 |title=Silicon Knights, Inc. v. Epic Games, Inc. |last=Sawyer |first=D. |date=November 7, 2012 |website=[[Justia]] |access-date=August 24, 2016 |url-status=live |archive-url=https://web.archive.org/web/20160904072807/https://docs.justia.com/cases/federal/district-courts/north-carolina/ncedce/5%3A2007cv00275/89570/862 |archive-date=September 4, 2016}}</ref>

Talking to [[IGN]] in 2019, Dyack expressed regrets over the lawsuit not just because of the loss but also the fact he underestimated the amount of time it took to settle the litigation. Had he known then, Dyack said he would have reconsidered pursuing the lawsuit.<ref>{{cite web |last1=McCaffrey |first1=Ryan |title=Denis Dyack: Working on Eternal Darkness, Metal Gear, & More! - IGN Unfiltered #42 |url=https://www.youtube.com/watch?v=1rEFs8sR4I0&t=42m59s  |archive-url=https://ghostarchive.org/varchive/youtube/20211222/1rEFs8sR4I0 |archive-date=2021-12-22 |url-status=live|website=YouTube |date=May 7, 2019 |accessdate=10 October 2019}}{{cbignore}}</ref>