Update: We’ve updated with CIG’s official statement to us below.

Crytek is suing Cloud Imperium Games and Roberts Space Industries, the companies behind the sprawling and controversial crowdfunded MMO Star Citizen.

In documents filed with the California Central District Court yesterday, Crytek alleges that CIG infringed its copyrights by using CryEngine to develop non-Star Citizen game assets – specifically, Squadron 42.

“Crytek has not been compensated for Defendants’ unlicensed use of Crytek technology in the Squadron 42 game, and has been substantially harmed by being deprived of that compensation, which would ordinarily include a substantial up-front payment as well as a substantial royalty on game sales,” plaintiffs argue.

Furthermore, Crytek accuses CIG of deleting Crytek logos in marketing materials and splash screens around the same time studio head Chris Roberts began calling the game’s engine Star Engine rather than CryEngine, which itself was allegedly a breach of the original licensing agreement.

Crytek has demanded “all direct damages (estimated to be in excess of $75,000), indirect damages, consequential damages (including lost profits), special damages, costs, fees, and expenses incurred by reason of Defendants’ breach of contract and copyright infringement” as well as a cut of the profit, punitive damages, and a permanent injunction against CIG’s use of CryEngine.

Squadron 42, you’ll recall, has been repeatedly delayed. CIG had promised a detailed status report on this game later this month.

We have reached out to Cloud Imperium for comment, recognizing that the company probably will not do so given pending litigation.

In related news, Polygon has a piece up today alleging that CIG has dragged its feet on refunding a backer’s $25,000 in pledges. CIG declined to comment on most of Polygon’s story.