Bethesda Sues Interplay over Fallout, MMO Rights

Fallout 3 developer and Fallout property owner Bethesda has filed a lawsuit against former owner Interplay to clarify that Interplay no longer holds any rights to the franchise.

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Bethesda, which purchased the post-apocalyptic property from Interplay for $5.75 million, says Interplay never sought the necessary approval to re-release the original Fallout games at retail or via digital distribution, and no longer holds the Fallout MMO license.

Bethesda further claims that Interplay's unapproved re-releases of Fallout, Fallout 2 and Fallout Tactics: Brotherhood of Steel though the "Fallout Trilogy," "Fallout Collection" and "Saga Fallout" bundles are "confusingly similar to Fallout 3" and "are in direct competition with Bethesda's Goods and cannibalizes on sales of 'Fallout 3.'"

Interplay's supposed continuing development of the Fallout MMO is also at issue, as Bethesda argues the MMO license was automatically terminated in April 2009 after Interplay failed to meet the conditions established two years ago.

Two days before Bethesda claims that the MMO license automatically terminated, Interplay sent a letter stating it was "in compliance with the requirements" and requesting an amendment so that it could "ultimately launch the FALLOUT MMOG to be compatible with and accessible on both handheld devices and consoles" in addition to PC. Bethesda denied this, contending that Interplay had failed to raise $30 million and enter "full-scale development," as the agreement mandated, by April 4, 2009.

Furthermore, Bethesda says that Interplay never formally responded to its declaration that the agreement had terminated, which invited Interplay to "dispute the forfeiture of license rights...within seven (7) days." Days later though, Interplay filed an annual report in which it "adamantly disputes" its failure to meet certain requirements of the agreement.

Interplay also violated the Fallout MMO license agreement, Bethesda says, when it entered into a funding and development partnership for the project with a third-party, Masthead Studios, without the necessary approval from Bethesda.

But while one of Interplay SEC filings appears to suggest that Masthead's project, codenamed Project V13, is separate from the Fallout MMO, Bethesda claims that V13 is a reference to Vault 13, "both the starting location and the the initial working title of the original Fallout game." In addition, concept art for Project V13 contains references to the Fallout universe, such as "Nuka Cola."

In compensation, Bethesda seeks unspecified monetary damages, including "Bethesda's damages and Interplay's profits...for Interplay's willful violation of Bethesda's registerd trademarks," and a declaration that Interplay's "continuing use of the FALLOUT Mark without authorization constitutes willful infringement."