It seems that Epic Games will not go quietly into the night regarding Silicon Knight's recent lawsuit contending that Epic willfully and illegally withheld vital parts of the Unreal Engine from them, resulting in delays and buggy code for the upcoming SK game, Too Human.
Epic Games VP Mark Rein released a statement today saying that Epic has "done nothing wrong" and that Epic will be counter-suing SK for "misappropriat[ing] Epic's licensed technology" with the development of the Silicon Knights Engine, a move SK's lawsuit claims was forced by Epic when it refused to support efforts to optimize the code for Too Human. Epic went on to say, "Indeed, the plain language of the Silicon Knights' Complaint makes clear that Silicon Knights wants to take Epic's Licensed Technology, pay nothing for it, and use it any way it pleases."
This accusation may have merit. In the Silicon Knights suit, SK states that "Progress on the Silicon Knights’ Engine continues to date and, at this time, the Silicon Knights Engine is completely independent of Epic’s Engine and certainly derives no benefit from the unworkable source code provided by Epic." Later in the same paragraph the suit states, "Moreover, as development of the Silicon Knights Engine continues, the amount of code from Epic’s Engine employed by Silicon Knights continues to decrease. After the release of Silicon Knights’ Too Human, all Epic code will be removed from the Silicon Knights Engine", inferring that there is indeed UE3 code within the developing SK Engine, despite the fact that it "derives no benefit from the unworkable source code." Furthermore, in the Prayer section (basically where SK lays out how they would like the Court to rule), clause M states that "(4) Silicon Knights may alter the Engine without restriction; (5) Silicon Knights is under no obligation to disclose or share any alterations Silicon Knights makes or causes to be made to the Engine with anyone, including Epic". To Mark Rein, this is essentially is an open admission of SK's willingness to use parts of Epic's engine code without having to pay for it.
More information is available at GameDaily.Biz, since they are apparently one of the chosen few who received the initial press contact from Epic.