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Epic prevails in suit against Silicon Knights, receives $4.45M in damages

Epic prevails in suit against Silicon Knights, receives $4.45M in damages

May 30, 2012 | By Eric Caoili

Epic Games VP Mark Rein says his company won its court case against Silicon Knights, which accused Epic of failing to provide a functional version of Unreal Engine 3 for development of the 2008 Xbox 360 game Too Human.

"Case over. Jury finds for Epic on all counts," said the Epic executive in a Tweet. The case had been a cloud over the two companies for the past five years. Gamasutra has reached out to Silicon Knights and Epic Games for confirmation.

This legal dispute began in 2007 when the Canadian studio accused North Carolina-based Epic Games (Gear of War series) of "sabotaging efforts by Silicon Knights and others to develop their own video games" with the company's Unreal Engine 3.

Silicon Knights, which licensed Unreal Engine 3, alleged that issues with the engine resulted in Too Human's two-year delay and low sales. An analyst brought in by the studio for the lawsuit estimated that Silicon Knights suffered over $58 million in damages from lost royalties, publisher bonuses, and profits from future projects.

North Carolina chief district judge James Dever III, however, took issue with the analyst's calculations and excluded his testimony and reports. The judge eventually decided that Silicon Knights would only be able to sue for $1 in damages, after the developer failed to provide a detailed breakdown of damages.

Silicon Knights' charges against Epic Games included fraud, negligent misrepresentation, intentional interference with contractual relations, intentional interference with prospective economic advantage, breach of warranty, unfair and deceptive trade practices, common law unfair competition, unjust enrichment, contract rescission or reformation, common law breach of contract, and breach of contract under the North Carolina Uniform Commercial Code.

[Update: Gamasutra has received conformation that Epic Games has won the case against Silicon Knights. In addition, the jury has ruled in favor of all of Epic's counterclaims, which state that Silicon Knights breached the Unreal Engine license agreement, misappropriated Epic's trade secrets, and infringed Epic's copyrights in the Unreal Engine 3 code.

As a result, Epic has been awarded damages totaling $4.45 million. The company also has the option to submit a request to the court for a full reimbursement of its legal fees. "We are delighted with the jury's verdict and all of the hard work done by the Hunton & Williams legal team," said Epic's general council, Jay Andrews.]

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