In August 2007, Epic Games counter-sued Silicon Knights, alleging the studio was aware when it signed on that certain features of Unreal Engine 3 were still in development and that components would continue to be developed and added as Epic completed work on "Gears of War". Therefore, in a statement, Epic said that "SK knew when it committed to the licensing agreement that Unreal Engine 3 may not meet its requirements and may not be modified to meet them." Additionally, the counter-suit claimed that Silicon Knights had "made unauthorized use of Epic's Licensed Technology" and had "infringed and otherwise violated Epic's intellectual property rights, including Epic's copyrighted works, trade secrets, know how and confidential information" by incorporating Unreal Engine 3 code into its own engine. Furthermore, Epic claimed the Canadian developer broke the contract by employing this derivative work in an internal title and a second game with Sega, a partnership for which it never received a license fee.