It seems like the folks at Silicon Knights are a little miffed with Epic Games.

Silicon Knights have been working on their new Xbox 360 science-fiction action-RPG Too Human since 1999. The title has evolved over the years, and is finally on the developmental home-stretch, with a tentative 2008 release date. All though exact figures have not been released, it could be possibly be the most expensive video game ever produced, with a budget between 80 and 100 million clams. The title is in a good position to be a blockbuster: Microsoft is hoping it'll have Halo-esque impact on the Xbox 360. 

The lawsuit was announced, via press release, yesterday. The lawsuit boils down to this: Silicon Knights claim that Epic misled them about the wonderfulness of the Unreal Engine (3). The Knights claim that Epic used licensing fees to improve and develop their own version of the Unreal engine for Gears of War. The version of the Unreal Engine that the Silicon Knights purchased license to, is inferior to the version Epic uses for their own products.

It appears that Silicon Knights had it with Unreal Engine 3, and have pretty much made their own engine for this great looking game.