Silicon Knights

Silicon Knights was a Canadian video game developer. Founded in 1992 by Denis Dyack and Michael Mays, the company was headquartered in St. Catharines, Ontario. They started developing for computers such as the Atari ST and IBM PC compatibles. After 1996, they moved to console titles.

In 2012, Dyack left Silicon Knights to form a new game studio, Precursor Games, after the loss of a court case against Epic Games over the game engine Unreal Engine 3. Epic Games won the case and a counter-suit for $4.45 million on grounds of copyright infringement, misappropriation of trade secrets, and breach of contract. Following the case, Silicon Knights filed for bankruptcy on May 16, 2014.

Silicon Knights' first games were real-time strategy/action hybrids for computers. Silicon Knights' last PC game, Blood Omen: Legacy of Kain was published in 1996. Since that time, Silicon Knights moved from creating PC games to console titles. In 2000, Silicon Knights was signed by Nintendo to create games exclusively for its consoles, during which time it produced Eternal Darkness: Sanity's Requiem. Together with Nintendo, Silicon Knights worked with Konami to create Metal Gear Solid: The Twin Snakes. In 2004, the company ended exclusivity with Nintendo. In 2005, it partnered with publisher Microsoft Game Studios for Too Human, though Nintendo still owned stock in the company. In 2008, the company released Too Human, which was published by Microsoft for the Xbox 360. The final game developed by the company, X-Men: Destiny, was released in September 2011 for multiple console platforms.

Canceled games included Silent Hill: The Box (later known as just The Box and The Ritualyst), Too Human 2 (Too Human: Rise of the Giants), Too Human 3, Eternal Darkness 2, and the little-known projects Siren in the Maelstrom, The Sandman and King's Quest.

Silicon Knights was a strong proponent of collaboration with academia and was a key player in the formation of Eight. Eight: The Hamilton Institute for Interactive Digital Media was a collaboration between Silicon Knights, McMaster University, the Art Gallery of Hamilton (AGH) and Mohawk College to create a novel academic and research model around interactive digital media and will help pioneer and shape cutting-edge advances in the interactive entertainment arena.^{[citation needed]}

On July 19, 2007, Silicon Knights sued Epic Games for failure to "provide a working game engine", causing the Ontario-based game developer to "experience considerable losses." The suit alleged that Epic Games was "sabotaging" Unreal Engine 3 licensees. Epic's licensing document stated that a working version of the engine would be available within six months of the Xbox 360 developer kits being released. Silicon Knights claimed that Epic not only missed this deadline, but that when a working version of the engine was eventually released, the documentation was insufficient. The game studio also claimed Epic had withheld vital improvements to the game engine, claiming they were "game specific", while also using licensing fees to fund development of its own titles rather than the engine itself.

In August 2007, Epic Games counter-sued Silicon Knights, alleging the studio was aware when it signed on that certain features of Unreal Engine 3 were still in development and that components would continue to be developed and added as Epic completed work on Gears of War. Therefore, in a statement, Epic said that "SK knew when it committed to the licensing agreement that Unreal Engine 3 may not meet its requirements and may not be modified to meet them." Additionally, the counter-suit claimed that Silicon Knights had "made unauthorized use of Epic's Licensed Technology" and had "infringed and otherwise violated Epic's intellectual property rights, including Epic's copyrighted works, trade secrets, know how and confidential information" by incorporating Unreal Engine 3 code into its own engine. Furthermore, Epic claimed the Canadian developer broke the contract by employing this derivative work in an internal title and a second game with Sega, a partnership for which it never received a license fee.

On May 30, 2012, Epic Games prevailed against Silicon Knights' lawsuit, and won its counter-suit for $4.45 million on grounds of copyright infringement, misappropriation of trade secrets, and breach of contract, an injury award that was later doubled due to prejudgment interest, attorneys' fees and costs. Consistent with Epic's counterclaims, the presiding judge, James C. Dever III, stated that Silicon Knights had "deliberately and repeatedly copied thousands of lines of Epic Games' copyrighted code, and then attempted to conceal its wrongdoing by removing Epic Games' copyright notices and by disguising Epic Games' copyrighted code as Silicon Knights' own." Evidence against Silicon Knights was "overwhelming", said Dever, as it not only copied functional code but also "non-functional, internal comments Epic Games' programmers had left for themselves."