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Video game maker Silicon Knights has suffered a vicious setback after it lost its appeal against Epic Games. The U.S. Court of Appeals for the Fourth Circuit upheld the decision of a lower court in the legal battle between the two video game makers. As of now, Epic has been awarded more than $9 million, out of which $4.45 million is for damages and the rest for legal fees and prejudgment interest.
During the post trial motions Silicon Knights was ordered in the previous rulings to destroy all unsold copies of their games using Unreal Engine 3. These include Too Human, and X-Men: Destiny. Interestingly, Epic, the winning party, did not initiate the legal battles, but it was Silicon Knights who sued Epic in 2007 claiming that Epic had delivered Unreal Engine 3 six months later than scheduled, while withholding a superior version of the game engine for its internal use.
Epic denied the claims made by Silicon Knights and then filed its own counterclaims.
The jury in the original trials rejected all claims made by Silicon Knights while it found in favor of Epic’s counterclaims awarding $4.45 million in damages.
It is possible that Silicon Knights might have to close down after this new ruling, as it has little room to maneuver, and seemingly little money with which to pay the fines. In fact, when the first half of the damages was awarded, Silicon Knights had to lay off many of its employees to cope.
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The company’s offices are also reported to be empty with former studio head Denis Dyack gone from the company, and currently working on two projects which do not belong to Silicon Knights. Dyack left with a group of employees at the time of layoffs and formed a separate company called Precursor Games that purchased some assets and office equipment of Silicon Knights.
