The United States Court of Appeals has denied Canadian game developer Silicon Knights' attempt to overturn the verdict in its long-running legal battle with Epic Games over its Unreal Engine technology. In a decision last week, the Court of Appeals upheld the lower court's ruling that Silicon Knights has to pay Epic $4.5 million in damages – plus legal costs – and destroy all code and products created using the Unreal Engine.
With this decision Silicon Knights has exhausted all of its legal remedies for the case. The case was first filed by Silicon Knights in 2007. At the time the company sued Epic for what it claimed was a failure to supply functional tools and adequate support during its development of the Xbox 360 exclusive, Too Human. The developer claimed that Epic was too focused on creating Gears of War and didn't spend enough time developing the engine. Silicon Knights might have gone too far when it tried to get profits from Gears of War. The court flatly rejected these arguments, instead giving Epic a victory and damages.
You can read the Appeals Court ruling here (PDF).