Originally Posted by maomaoIYP
I had the impression that SK paid for rights to use the Unreal Engine 3 hence leading to them bitching about it being bad and thus the lawsuit?
SK signed up and paid a deposit to use the Unreal Engine. Then they didn't like it so they started "improving" it. Eventually SK decided that it was 100% made of "improvements" so it was 100% original and belonged to them, not Epic. So they thought they were allowed to stop making payments on the Unreal Engine (and demanded the money back that they had already paid).
Epic convinced the court that there was still actual Epic code left in the final retail version of Too Human, and even if there wasn't, SK's so-called "Silicon Knights Engine" was just an illegally reverse-engineered copy of the Unreal Engine.
Edit: SK gets to keep Too Human's art and game design, but all traces of the Unreal Engine (and probably the Silicon Knights Engine) in SK's possession (or in the retail market with the possibility of a recall) had to be returned and/or destroyed.