Crytek has filed a lawsuit in the US district court of California against Cloud Imperium Games, the developers of Star Citizen, for copyright infringement and breach of contract.

　　You may read the whole document on Scribd, though we've included a particularly relevant excerpt below.

　　3.  In 2012, Defendants sought to develop a new game called "Star Citizen," which was billed as an epic space adventure, trading, and dogfighting video

　　game. To make that game a reality, Defendants sought to use the CryEngine videogame development platform as its foundation. Crytek and Defendants agreed to preliminary license terms and invested significant time and expense in

　　creating impressive demonstrations and proofs-of-concept that were used to persuade the public to contribute financially to a "crowdfunding" campaign to support development of the video game. As a direct result of Crytek's efforts, the crowdfunding campaign for Star Citizen was a monumental success, raising over 150 million dollars — a record for video game crowdfunding projects.

　　4. Crytek and Defendants subsequently formalized their relationship by

　　entering into a Game License Agreement. In that Agreement, Defendants promised, among other things, (i) to use the CryEngine game development platform exclusively and to promote that platform within the video game, (ii) to collaborate with Crytek on CryEngine development, and (iii) to take a number of steps to ensure that Crytek's intellectual property was protected. Defendants utterly failed to follow through on those promises, and their actions and omissions constitute breaches of contract and copyright infringement and have caused substantial harm to Crytek.

　　5. By this action, Crytek seeks damages that will fairly and fully compensate it for Defendants' breach and infringement. If this relief is not granted, Defendants will continue to profit unjustly at Crytek's expense.

　　Cloud Imperium already sent out a brief response to the press, which you can find below.

　　We are aware of the complaint having been filed in the US District Court. CIG hasn’t used the CryEngine for quite some time since we switched to Amazon’s Lumberyard. This is a meritless lawsuit that we will defend vigorously against, including recovering from Crytek any costs incurred in this matter.

　　It looks like a legal battle is about to ensue. Needless to say, should Cloud Imperium be found guilty the blowback on Star Citizen could vary from mild to severe depending on the court's decision.

　　We'll keep monitoring this case and let you know of significant updates. Stay tuned.