Silicon Knights is suing Epic Games alleging that the developer's Unreal Engine 3 code is inadequate and has "caused serious damage to not only Silicon Knights, but a number of other developers in the industry," GameDaily Biz reports.

Epic Games' Vice President Mark Rein sent out a press release this afternoon notifying some gaming press of the suit:

"This morning we were served with a lawsuit by Silicon Knights. We believe the claims against us are unfounded and without merit and we intend to fully defend against them," said Rein.

"We'd love to tell you more about it but unfortunately our lawyers want us to save our comments for the courthouse so we're going to do our best to comply with their wishes. In that vein we'd appreciate if our friends in the industry and media would refrain from asking us about the suit because we're only going to say 'no comment.' We just wanted to share the news directly before the rumor mill starts churning."

Silicon Knights president Denis Dyack then responded to inquiries from GameDaily about the suit:

"We stand behind everything in our complaint and believe it is highly unfortunate that Epic forced us into this situation. We would rather spend our time focusing on making great games, but as stated in our complaint, Epic simply refuses to acknowledge the inadequacies of the Unreal Engine 3 code it provides to its licensees," he said, "and refuses to accept the fact that its code has caused serious damage not only to Silicon Knights, but a number of other developers in the industry. We look forward to successful resolution of our claims in this court proceeding."

This flurry of legal activity comes on the heels of Too Human's surprise no show at last week's E3. At the time Dyack said the reason for the no show was because the event wasn't right for the game, but now you've got to wonder if there are other issues.

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