Breaking: Silicon Knights Files Lawsuit Against Epic

[dobwal]

While Epic certainly has the ability to make a choice of how they prioritize their obligations, if they had the resources to deliver on their contract with SK and chose an allocation that prevented them from doing so, it gives SK's lawyers the chance to say that Epic drew the contract with SK in bad faith, which is fair more damning than a good faith contract that they failed on.

Bad faith argument would require showing that Epic made promises they knew they couldn't keep.

SK is obviously trying to prove that Epic's intent from day one was a malicious money grab against their licensees. The division and wording of the charges, even in cases where specific behaviors are not necessarily illegal, are all parts of the case that SK is building.

If thats what they are trying to do they will have a very hard time doing it.

It will be hard to convince someone that a Epic with a viable engine licensing business would deliberately torpedo that business to create capital for game development. Where is the malicious money grab when Epic has provided a fully functional 360 engine. SK would have to prove that Epic took their money with no intention of providing the product or the support stipulated in the contract. A six month delay isn't enough to prove that because delays happen even in good faith. Furthermore, the optimized engine for the 360 was provided at the time that Gears was released, so its hard to say its a money grab when the product was available at or before any profits was seen from Gears.

 

[dlm]

Bad faith argument would require showing that Epic made promises they knew they couldn't keep.



If thats what they are trying to do they will have a very hard time doing it.

It will be hard to convince someone that a Epic with a viable engine licensing business would deliberately torpedo that business to create capital for game development. Where is the malicious money grab when Epic has provided a fully functional 360 engine. SK would have to prove that Epic took their money with no intention of providing the product or the support stipulated in the contract. A six month delay isn't enough to prove that because delays happen even in good faith. Furthermore, the optimized engine for the 360 was provided at the time that Gears was released, so its hard to say its a money grab when the product was available at or before any profits was seen from Gears.

I never said that I thought the angle they're taking with the case is likely to be successful. Only how they're trying to fit the pieces together.

They have pretty much a no-brainer on the breach of contract. The rest is a hail mary that I couldn't begin to speculate on why they threw. Only that they're doing it.

 

[dobwal]

I never said that I thought the angle they're taking with the case is likely to be successful. Only how they're trying to fit the pieces together.

They have pretty much a no-brainer on the breach of contract. The rest is a hail mary that I couldn't begin to speculate on why they threw. Only that they're doing it.

I was just commenting on their angle.

 

[Subtlesnake]

That was a good post, inefficient. Do you have any legal experience?

 

[Fox5]

Exactly..

Personally I find it most unsual that SK would even consider such an idea especially when both companies are not completely "competing" in the same space..

They're both publishing their games under MSG [for the same platform] for pete's sake!

I'm not sure why MS doesn't get involved and try to help the situation, it would probably be in their interests since this fiasco could be affecting their own image..?

Publishing under MSG may make it worse, they're competitors for their boss's attention and funding. Not to mention SK was one of nintendo's crown jewels and has both a lot to live up to and a lot to prove. Epic is the PC powerhouse that was actively courted by microsoft. If Gears of War is a massive success and Too Human bombs, you think MSG will continue to fund SK, or just shift the funding to somewhere it's better spent?

 

[Bouncing Zabaglione Bros.]

They have pretty much a no-brainer on the breach of contract. The rest is a hail mary that I couldn't begin to speculate on why they threw. Only that they're doing it.

Gives SK more to throw away when it comes to making a deal before they end up in court. It raises the stakes for Epic if they decide to contest it and risk the chance of losing the suit. It produces bad publicity for Epic's licensing business, putting pressure on Epic to settle before their licensing business has it's reputation tarnished.

Basically SK is asking for more because they know they'll get knocked down from their starting point, and to put the hurry up on Epic and how they deal with this claim.

 

[Colourless]

I think the theory works a little bit like this. You always try to get 'more' because if you're lucky, you never know you might end up getting it. And also, if things are looking good for you, it makes it easier to force a settlement if it looks like the other party is going to be really really screwed at the end of the court case.

 

[archangelmorph]

BUMP

According to next-gen.biz Epic are now counter-suing SK:-

http://www.next-gen.biz/index.php?option=com_content&task=view&id=6776&Itemid=2

Here' are some interesting quotes...:

In the counterclaim, obtained by Next-Gen via public court filings, Epic stated, “Indeed, the plain language of the Silicon Knights’ complaint makes clear that Silicon Knights wants to take Epic’s licensed technology [UE3], pay nothing for it, and use it any way it pleases.â€

Epic said that beginning in August 2004, Silicon Knights evaluated UE3 for nine months without charge in accordance with an “evaluation agreement,†which granted Silicon Knights full access to the technology itself and to Unreal Developers’ Network support prior to finalization of a commercial licensing agreement.

Epic said Silicon Knights accessed Unreal Engine documentation 2,109 times during the evaluation period. The two companies officially entered a commercial licensing agreement in May 2005.

Also I thought this was interesting:-

According to the filing, Epic gave Silicon Knights a “substantial discount†on the license, as the firm allegedly promised Epic to use UE3 exclusively on all of its games for Xbox 360, PS3 and PC.

I was never aware that SK had been working on games for PC or more interestingly, PS3...

Potentially damaging to Silicon Knights’ claims is the licensing agreement for UE3, which states, according the filing, that Epic’s warranties “do not include any warranty that the functions performed by the Unreal Engine … will meet [Silicon Knights’] requirements, nor that the operation of the Unreal Engine … will be bug free or error free in all circumstances, nor that any defects of the Unreal Engine … can or will be corrected.â€

Silicon Knights said in its original complaint that UE3 "did not work as Epic represented it would and, moreover, Epic has been unable or unwilling to fix it."

Epic cited Silicon Knights' complaint which revealed the company had been working on a competing game engine since May 2006, called the Silicon Knights Engine. Epic also said Silicon Knights intends to use UE3 code in that engine.

Epic stated that Silicon Knights’ “infringement has at all times been willfull.†The firm added that Silicon Knights “failed to devote its best efforts to develop a game using Unreal Engine 3." Epic said Silicon Knights created a “culture of isolation†that severed ties between UE3 developer support and Silicon Knights.

Also here's another gem for discussion..:-

Epic said that a game that Silicon Knights is working on with Sega (referred to as “Game 2â€) infringes on Epic copyrights and violates the licensing agreement.

Game 2 eh? Hmmm...

 

[Shifty Geezer]

Potentially damaging to Silicon Knights’ claims is the licensing agreement for UE3, which states, according the filing, that Epic’s warranties “do not include any warranty that the functions performed by the Unreal Engine … will meet [Silicon Knights’] requirements, nor that the operation of the Unreal Engine … will be bug free or error free in all circumstances, nor that any defects of the Unreal Engine … can or will be corrected.â€

Silicon Knights said in its original complaint that UE3 "did not work as Epic represented it would and, moreover, Epic has been unable or unwilling to fix it."

These clauses are always dubious. I'd like to hear a ruling on them. You can't contract your way out of providing a usable product or service - if your product doesn't do what you say it will, the inherent buyer/seller contract says you've 'duped' the buyer. It'll be interesting if the wording of the contract is unambiguous or not, because I imagine it'd be hard not to be too generic such as to end up creating a 'we're not responsible for anything' nonsense contract. Of course this is more a service than a product, so is up for even more interpretative law.

It's really just a shame it's come to this. If SK are struggling with a toolset, I feel for them. I know how frustrating that can be, especially when faults aren't addressed even after years! But if Epic are dealing with them fairly and they're just looking for a scape-goat or 'quick' buck, I feel sorry for Epic.

 

[valioso]

I cannot believe Epic is saying that they can license an engine for up to a million bucks in some cases, and not guarantee it will work... here is a lemon.. now make me rich?

 

[Gubbi]

I cannot believe Epic is saying that they can license an engine for up to a million bucks in some cases, and not guarantee it will work... here is a lemon.. now make me rich?

There's no way Epic can guarantee that the engine works after being mangled by an independent developer.

I can't see this ending happily for SK. They evaluated the engine/toolset for 9 months, then signed a contract, then developed further for a substantial amount of time, only to then give up.

That just reeks of poor judgement (management).

I'm guessing they'll have a hard time getting publishers to finance future developments.

Cheers

 

[valioso]

There's no way Epic can guarantee that the engine works after being mangled by an independent developer.

I can't see this ending happily for SK. They evaluated the engine/toolset for 9 months, then signed a contract, then developed further for a substantial amount of time, only to then give up.

That just reeks of poor judgement (management).

I'm guessing they'll have a hard time getting publishers to finance future developments.

Cheers

This quote does not say anything about SK making the bugs.. "Epic’s warranties “do not include any warranty that the functions performed by the Unreal Engine … will meet [Silicon Knights’] requirements, nor that the operation of the Unreal Engine … will be bug free or error free in all circumstances, nor that any defects of the Unreal Engine … can or will be corrected."

 

[Gubbi]

This quote does not say anything about SK making the bugs.. "Epic’s warranties “do not include any warranty that the functions performed by the Unreal Engine … will meet [Silicon Knights’] requirements, nor that the operation of the Unreal Engine … will be bug free or error free in all circumstances, nor that any defects of the Unreal Engine … can or will be corrected."

Let me paraphrase then. Epic are saying:
1. Don't expect more than the engine can deliver.
2. Software has bugs.

Both seems rather superfluous and self-evident for anyone working with software (of any kind).

Cheers

 

[Shifty Geezer]

This quote does not say anything about SK making the bugs.. "Epic’s warranties “do not include any warranty that the functions performed by the Unreal Engine … will meet [Silicon Knights’] requirements, nor that the operation of the Unreal Engine … will be bug free or error free in all circumstances, nor that any defects of the Unreal Engine … can or will be corrected."

However, 9 months of evaluation ought to have set up SK with suitable understanding to make an informed decision. That said, SK may have encountered serious issues to which Epic said 'we'll fix those' and so bought on good faith, only to be disappointed. Such is the risk with 'we aren't responsible' clauses, while at the same time a company can't be held entirely responsible for when software doesn't work, because it's such complicated stuff.

 

[ninzel]

As an outsider to the industry,I wonder how often this stuff happens and just doesn't get so public. I'm surprised that with how complicated and precise and yet how fluid game development must be ,that issues with engines like this don't come up more often.
Edit: Or maybe other game devs encounter these same problems,but just accept it as the way things are.

 

[Nite_Hawk]

As an outsider to the industry,I wonder how often this stuff happens and just doesn't get so public. I'm surprised that with how complicated and precise and yet how fluid game development must be ,that issues with engines like this don't come up more often.
Edit: Or maybe other game devs encounter these same problems,but just accept it as the way things are.

Certainly problems like this happen fairly often, though I think usually there isn't enough motivation to sue. It sounds like SK is getting pretty desperate if they are going to these lengths. Still, this is a good lesson. Don't buy a competitor's engine from them in a (claimed) not working state and bet your business on the premise that it will eventually work when you need to ship your game. That's a bad business decision no matter what the contract says. Given how long it has taken them to ship their game, I assume they must have had a lot more faith in epic's ability to ship a product than they do in their own.

Nite_Hawk

 

[dobwal]

Certainly problems like this happen fairly often, though I think usually there isn't enough motivation to sue. It sounds like SK is getting pretty desperate if they are going to these lengths. Still, this is a good lesson. Don't buy a competitor's engine from them in a (claimed) not working state and bet your business on the premise that it will eventually work when you need to ship your game. That's a bad business decision no matter what the contract says. Given how long it has taken them to ship their game, I assume they must have had a lot more faith in epic's ability to ship a product than they do in their own.

Nite_Hawk

Being there are about 30-40 games slated for 2007-2009 using the U3 engine, I would guess that the majority licensed U3E before a fully functional engine was available (Nov 06 for the 360, unreleased for the PS3).

If SK made a bad business decision then it would seem that exact decision would be a pretty common occurence as of this generation.

 

[Nite_Hawk]

Being there are about 30-40 games slated for 2007-2009 using the U3 engine, I would guess that the majority licensed U3E before a fully functional engine was available (Nov 06 for the 360, unreleased for the PS3).

If SK made a bad business decision then it would seem that exact decision would be a pretty common occurence as of this generation.

I wouldn't be surprised if it was a bad business decision for a lot of them. Granted, I usually am somewhat biased toward in-house development anyway. I've never had good luck relying on 3rd party software infrastructure. It's usually a complicated mess and not really suited to do what I want. It ends up being as much if not more work than just writing it myself.

Nite_Hawk

 

[Fox5]

I wouldn't be surprised if it was a bad business decision for a lot of them. Granted, I usually am somewhat biased toward in-house development anyway. I've never had good luck relying on 3rd party software infrastructure. It's usually a complicated mess and not really suited to do what I want. It ends up being as much if not more work than just writing it myself.

Nite_Hawk

If that's true, I'd imagine Epic just single handidly destroyed their middleware business. Only smaller dev houses would stick with it for this gen due to legacy code, and no one would pick it up next gen.

 

[ShootMyMonkey]

I wouldn't be surprised if it was a bad business decision for a lot of them. Granted, I usually am somewhat biased toward in-house development anyway. I've never had good luck relying on 3rd party software infrastructure. It's usually a complicated mess and not really suited to do what I want. It ends up being as much if not more work than just writing it myself.

I think everybody has had that experience with middleware. It's always the case that it doesn't *quite* fit the bill and to make it do what you need, you just need to rip it to shreds and construct it as you see fit. Maybe UE3 would be perfect for someone making a carbon copy of Gears of War or UT3, but for anything else, there will surely be more cursing than praising.

Though this isn't the first time I've seen SK try to take things to court (which is probably as mentioned before, an effort to try to wheedle out a settlement), it is kind of superfluous to say that there is malice behind it or that Epic is failing to get their behinds in gear because they care too much about their own projects... as if you shouldn't have expected that in the first place.