Update: We have received Cloud Imperium Games' official statement, which is as follows:
We are aware of the Crytek complaint having been filed in the US District Court. CIG hasn’t used the CryEngine for quite some time since we switched to Amazon’s Lumberyard. This is a meritless lawsuit that we will defend vigorously against, including recovering from Crytek any costs incurred in this matter.Crytek, developers of the Crysis series and the popular CryEngine, are bringing a lawsuit against Cloud Imperium Games and Robert Space Industries, the developers of Star Citizen. Crytek filed the paperwork with the California Central District Court, which alleges that Cloud Imperium Games infringed its copyrights through their use of CryEngine to develop a separate game from Star Citizen, namely Squadron 42. Crytek also alleges numerous breaches of contract by Cloud Imperium Games and Robert Space Industries.
The first point of contention for Crytek is the existence of Squadron 42 as a standalone game. Crytek claims that they made it very clear that the licensing agreement between them and CIG was only for one game. They claim the agreement between the companies specifically mentions that a standalone game is not covered. After Squadron 42 was announced as a standalone game from Star Citizen, Crytek contacted CIG and RSI to notify them that Squadron 42 was not covered by their agreement and that they would need to get another license. CIG and RSI moved forward to sell the game without obtaining that license, thereby "willfully using CryEngine without a license and in violation of copyright laws."
Second, Crytek alleges CIG and RSI removed Crytek trademarks and copyright notices from Star Citizen and its marketing materials without Crytek's permission. The agreement mentions specifically, "'splash screen, credits screen, documentation and packaging (if any) as well as the marketing material' shall include 'Crytek's copyright notice.'" Shortly after a Chris Roberts said in a video that they don't call it CryEngine anymore but Star Engine, which Crytek alleges was an attempt to minimize Crytek's contribution to Star Citizen, the Crytek trademarks and copyright notices were removed. In addition, the negotiated licensing fee was reduced due to the promotions.
Third, RSI and CIG broke its promise to exclusively develop Star Citizen on CryEngine. Part of their agreement contained a "critical promise" that only CryEngine would be used. In December of last year, Star Citizen moved over to the Amazon Lumberyard engine.
Fourth, Crytek alleges RSI and CIG broke their promise to collaborate on CryEngine development. The agreement stated that RSI and CIG would provide Crytek with bug fixes and optimizations made to CryEngine periodically throughout development. Crytek claims no good faith effort was made to provide them with that information, even after reaching out multiple times.
Finally, Crytek alleges that RSI and CIG disclosed CryEngine technology to third parties without Crytek's permission. Crytek claims that the "Bugsmashers" series that Star Citizen still presently posts, violates their agreement as it makes public confidential information. Also, RSI and CIG have partnered with Faceware Technologies, and Crytek believes they were given access to confidential information about CryEngine without Crytek's approval.
That's the quick summary of allegations by Crytek. You can read the paperwork itself for more information. One thing to keep in mind is that we don't have access to the licensing agreement between Crytek and RSI and CIG. The only glimpse into that document we have been given is from Crytek with a few choice quotes from it here and there. Importantly, this is a filing from the plaintiff so will place their argument in the best light and CIG hasn't responded to it in or out of court.
Back in June of this year, CIG took out a loan with Coutts & Co, a highly respected banking institution in the U.K. CIG put Squadron 42 up as collateral for the loan, which if it is indeed material that infringed on a copyright, it may significantly devalue it as collateral for said loan. There's no telling how this loan may be affected, but its something else CIG and RSI will be worrying about in the future.
We have reached out to Cloud Imperium Games, Crytek, and the law firm representing Crytek for more information. If we get any comment or information, we will update this article.