A U.S. District Court has ordered Silicon Knights to stop using Epic Games‘ Unreal Engine and destroy all of its works containing licensed Epic Games technology, including unsold copies of Too Human, X-Men: Destiny, and other unreleased titles. The destruction will have to happen no later than December 10, 2012. The court also increased the amount of money awarded to Epic Games in May of this year from $4.45 million to $9.1 million.

This case stems from 2007, when Silicon Knights sued Epic Games, claiming that Epic’s Unreal Engine 3 wasn’t “working,” that Epic was holding back some mythical improved version of the Engine, and that these troubles had cost Silicon Knights millions of dollars. Epic successfully defended itself and countersued, winning a jury trial at the end of May. Today’s decision presents even more of a blow to Silicon Knights. From the decision:

Not later than December 10, 2012, Silicon Knights shall destroy all versions of the Licensed Technology in its possession, including (but not limited to) the video game engine code for Too Human, The Box/Ritualyst, The Sandman, X-Men: Destiny, and Siren in the Maelstrom, all other game code that was created using the Licensed Technology, all versions of the Unreal Engine 3, and all copies of any information obtained from the licensee restricted portions of the Unreal Developer network.

In addition, Silicon Knights will have to recall any of its games that use Epic’s code and destroy them. The developer will also have to permanently stop using Epic’s engine, and remove any of Epic’s licensed technology from its own game engine, under the supervision of Epic.

It appears Silicon Knights could be done as a game developer if this decision stands. With its last two (poorly reviewed) games not even on store shelves and a white screen sitting where the code for its future games should be, it’s hard to imagine a publisher investing in a new title with the company.

(via Joystiq)