If you make a controversial game with UE4 Epic has the right to make you delete the game.
Let me quote section 11 of the end-user license agreement for Unreal Engine 4.7.2 (possibly applicable for Unreal Engine 4.7 and 4.7.1 as well):
11.Proprietary notices and attribution You agree to retain and reproduce in all copies of Licensed Technology the copyright, trademark and other proprietary notices and disclaimers of Epic and third parties as they appear in the Engine Code and the Content.
You agree to place the following notices in the credits for any Product (replacing xxxx with the current year):
"[Product Name] uses the Unreal® engine. Unreal® is a trademark or registered trademark of Epic Games, Inc. in the United States of America and elsewhere."
"Unreal® Engine, Copyright 1998-xxxx, Epic Games, Inc. All rights reserved."
No other license or right in the Epic Trademarks is granted under this agreement. All use of the Epic Trademarks will inure to the sole benefit of Epic. You agree not to engage in any activity that could tarnish, dilute or affect the validity or enforceability of the Epic Trademarks or cause consumer confusion or diminish any goodwill relating to any Epic Trademarks. If you wish to make further use of the Epic Trademarks, please go to https://www.unrealengine.com/branding-guidelines-and-trademark-usage.
Epic may use your trademarks, service marks, trade names, and logos used with any Product, as well as publicly released screen shots and video content from the Product, in connection with Epic's marketing, advertisement, and promotion of the Unreal® Engine in any and all media without restriction.
Note, importantly, the part about diminishing goodwill towards the trademarks; in the legal sense, this refers to the reputation of the trademarks. So, to re-iterate, Epic reserves the right to forbid you from using its trademarks if that could harm its "reputation", but the company also requires you to include its trademarks (that's what the "®" symbol stands for) in your product. This means that, when making a product using the Unreal Engine, you must ensure the product does not harm Epic's "reputation" in order to avoid breaking the agreement, and so you are de facto prevented from creating potentially controversial products using the engine. The problem is that "reputation" can mean a different thing in different places and at different times, and is not subject to genuine principles but to the whims of a given culture and media establishment. In asking the developers to safeguard its "reputation", Epic is in practice requiring them to submit to these whims. Moreover, as the license agreement states elsewhere, Epic will not compensate anyone for any losses incurred in connection to the use of the engine, which means that if a sudden change in the media's attitudes causes a game to become "controversial" when it is on the verge of being released, Epic can shut down the project without reimbursing the developers.
Having lost the project and the money they spent building it, the developers would also have to destroy all copies of the game, according to section 16, paragraph D of the license agreement:
D. Effect of Termination. Upon any termination, the Epic Licenses will automatically terminate, you may no longer exercise any of the rights granted to you by the Epic Licenses, and you must destroy all copies of the Licensed Technology in your possession and cease distributing any Products developed under this Agreement.Within 30 days of termination, unless otherwise agreed by Epic, you must destroy all Products in your inventory.
When the license agreement talks about Products here, it certainly refers to the games under development, but also potentially to any trailers, screenshots etc that have been released (the language is unclear regarding this):
"Product" means any product developed under this Agreement that is made using any Licensed Technology or that combines any Licensed Technology with any other software or content, regardless of how much or little of the Licensed Technology is used.
In the best-case scenario, this paragraph forces the developers to destroy all copies of the game unless Epic says otherwise. In the worst-case scenario, it also forces developers to destroy their trailers, screenshots etc. In any event, it seems excessive to require the removal of all content produced with the engine, and not merely the removal of the engine itself.
I am fairly certain that, when I purchased a copy of UE4 back in November or December (definitely before version 4.6.0), the license was more liberal and did not contain the trademark requirements. These requirements almost certainly appeared because the game Hatred recently used the Unreal Engine logo, which caused articles about it to appear in the Daily Mail, the Guardian and elsewhere, potentially harming Epic's "reputation". It's worth noting that Unreal Engine 4.7.2, the version that contains the new license agreement, apparently has to be installed separately from Unreal Engine 4.6 (and any version prior to that), so at the very least, one can hope that development can proceed for those games that were started before the new requirements came into effect.
The addition of the section on trademarks is not mentioned anywhere in the changelog of the end-user License Agreement, which is surprising, as the section is significant and was certainly not there a few months ago.
The overall problem is not that Epic might develop a totalitarian streak; it's that when parts of the media will see fit to demonize any game being made with UE4, Epic might shut down development of that game. I am concerned that this may be part of a more widespread tendency to limit freedom of thought and freedom of conscience throughout the sphere of game development. In the future, if you are looking for a game engine when developing a potentially controversial game, it would be best to email the engine's developers and find out where they stand before purchasing a license from them. I would not speculate that Epic is deliberately intending to shut down any game, but merely state that Epic now has legal grounds to cater to the media and "problematic" games, so rather than dismissing the engine altogether, it would be best to contact Epic Games and seek clarification on the license agreement.
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tl;dr: According to the new EULA in Unreal Engine 4.7.2, you are forbidden from making games that could harm the "reputation" of Epic Games. If they do end up harming its "reputation", Epic Games can legally force you to end your game project and destroy your inventory of the "offending" games and possibly all trailers, screenshots etc. The changes probably arose in the wake of the Hatred trailer that featured the Unreal Engine logo. The issue is not that Epic will ever do so, but that according to the new license agreement, it can.
That's right guys... More censorship. Meanwhile game journalists are all drinking the Kool-Aid like the subjugated propagandists that they are.
Although I must admit, Randolph Ramsay's article about GDC censorship has been pretty accurate. It's like the guy's a visionary or something.
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