This shit happens practically once a month with smaller developers and download-only games, but I can't remember the last time anything like this happened with a comparatively major developer.
A motion was filed on Tuesday by Judge James C. Denver III of North Carolina's Eastern District court ordering Silicon Knights to destroy all unsold copies of both Too Human and X-Men: Destiny. This request is not unprecented, but has been a long time since a developer (and not the publisher) has been forced to destroy copies of their games. The reason for this court order is complex, but it comes back to the lawsuit Silicon Knights filed against Epic Games, which is the third lawsuit I discussed back in the Lawsuit Special.
Essentially, Silicon Knights had sued Epic Games back in 2007 regarding alleged mis-handling of the Unreal Engine 3. Silicon Knights claimed Epic Games breached their contract by failing to provide adequate support regarding the Unreal Engine 3. In turn, Epic Games filed a counter-suit, claiming that the support was adequate and within the terms of the contract, in addition Epic Games claimed that Silicon Knights broke the contract by creating their own game engine out of Unreal Engine 3, which was used to create both Too Human, X-Men Destiny and a handful of prototypes for future projects. By doing so, Silicon Knights violated copyright and trade secret acts. Specifically, the court found that Silicon Knights violated 333 trade secrets out of the total 1,442 presented by Epic Games.
Epic Games proved that Silicon Knights stole data from Unreal Engine 3 to make their own game engine by pointing out that typographical errors in notations made by Epic engineers were present in the Silicon Knights game engine.
While our earlier report stated that the court found in favor of Epic Games, the exact terms of the lawsuit are now being made clear. Here is a rundown of the court's rulings, filed on November 7th, 2012:
Epic Games is to be awarded $277,852.13 to cover costs related to testimonies.
Epic Games is to be awarded $680 in expert witness fees.
Epic Games cannot, under North Carolina law, be awarded attorney fees as the litigation proved successful. That is in regards to Silicon Knights lawsuit, and not the counter-suit filed by Epic Games.
Epic Games, due to the nature of Silicon Knights attempted cover-up of the stolen code, is to be awarded attorney fees regarding the counter-suit. The grand total is $2,091,722.83 in attorney fees.
Epic Games was initially granted by the jury, damages in the payment of $2,650,000 regarding Silicon Knights breach of contract lawsuit. Epic Games' counter-suit was awarded damages in the payment of $1,800,000. Epic Games declined, stating that they "only sought Silicon Knights ill-gotten profits". To that end, all net revenue earned by the sales of X-Men: Destiny is to be awarded to Epic Games.
The court found that due to the scale of Silicon Knights actions regarding stolen code, a permanent injunction was acceptable in the resolution of this case. The result is that Silicon Knights must immediately cease the usage of Epic Games Licensed Technology. All existing games shall have Epic Games Licensed Technology removed from them, and at the expense of Silicon Knights, Epic Games will provide their own programmers to verify this action was indeed followed. After Epic Games verifies that the existing games and game engine have been scrubbed clean of all stolen code, Silicon Knights shall destroy their game engine and every line of code that comprises said game engine.
Perhaps the worst punishment, is that no later than December 10th, 2012, Silicon Knights shall destroy all versions of the Epic Games Licensed Technology in their possession, including the following: Too Human, X-Men: Destiny and unreleased titles/prototypes including The Box/Ritualyst, The Sandman and Siren in the Mealstrom. This includes an order to cease the distribution of the aforementioned games and to, at the expense of Silicon Knights, buyback all existing unsold copies and have them destroyed.
Silicon Knights motion for appeal was denied. All information contained in this article may be found within the official motion, located here
in a readable, PDF format.
Cue jokes about how they should have been forced to destroy all copies of Too Human and X-Men Destiny anyway, on the grounds that they were really, really crappy games.
If the previous reports about Silicon Knights' financial state are correct, then this is undoubtedly going to be the killer blow, either from the expense of recalling all their copies or the inevitable massive fine they'll get for not being able to comply with the court order. Guess this also means that any hope for an Eternal Darkness sequel on the Wii U is pretty much up in smoke, unless Nintendo were smart enough to specify that they gained control of the IP in the event of Silicon Knights going under.