Silicon Knights, which used the engine to develop Too Human, claimed that Epic was using and licensing the Unreal Engine to benefit the launch of Gears of War, while "sabotaging efforts by Silicon Knights and others to develop their own video games."
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http://www.polycount.com/forum/showthread.php?t=48883
The fact that SK aren't being awarded any real damages despite 'winning' is pretty funny though. No idea how that could possibly come about.