"In fact, at this juncture the Silicon Knights Engine should, at a minimum, be described under the Agreement as an "Enhancement" of Epic's Engine, which, as defined by the Agreement, is technology developed by Silicon Knights that improves upon the Engine and is therefore the property of Silicon Knights. Moreover, as development of the Silicon Knights Engine continues, the amount of code from Epic's Engine employed by Silicon Knights continues to decrease. After the release of Silicon Knights' Too Human, all Epic code will be removed from the Silicon Knights Engine."
What can we learn from this statement?
1) Dyack admits that Too Human uses UE3 code. However, he doesn't think he should have to pay for it.
2) SK has made additions to the UE3 engine, or a derivative work. Dyack believes this means SK now owns the deriviative work as well as the entire original work, the UE3 engine.
3 Dyack totally promises to stop using UE3 code, soon, honest. But he's not paying for anything, okay!