September 11, 2009
Bethesda Sues Interplay Over Use Of Fallout License
Fallout rights holder Bethesda Softworks has made good on its threat to sue developer Interplay for allegedly failing to hold up its end of agreements inked in April 2007.
Bethesda filed a complaint -- obtained by Gamasutra -- in the U.S. District Court of Maryland on September 9 requesting a preliminary and permanent injunction against Interplay's manufacture, sale, and distribution of Fallout Trilogy, which includes the classic PC games Fallout, Fallout 2 and Fallout Tactics.
Bethesda accused Interplay of trademark infringement, claiming that while Interplay was permitted to sell pre-existing Fallout games, it was required to submit to Bethesda all relevant packaging, advertising, and promotional material prior to bringing the catalog titles to market.
But Bethesda claimed that Interplay never sought pre-approval for those materials. The plaintiff said because of the alleged trademark infringement, consumers have become confused between the makers of the pre-existing Fallout games and Bethesda's more recent Fallout 3 -- a situation that Bethesda wanted to avoid.
Bethesda also accused Interplay of breaching the trademark agreement by signing licensing agreements with digital distribution sites like Steam, GOG.com, and GameTap to sell older Fallout games. The company claimed Interplay's alleged actions have caused the studio "immediate, substantial, and irreparable harm."
Bethesda is also asking the court for a declaration stating a trademark licensing agreement between the two companies is terminated. In 2007, Bethesda purchased the Fallout franchise from Interplay in full for $5.75 million. Within that purchase agreement was a trademark licensing agreement, the complaint said, that allowed Interplay to license back the rights to develop an MMO based on the Fallout series.
But the stipulation was that Interplay had to have commenced full-scale development of the Fallout MMO by April 4, 2009, two years after the signing of the original contract. Bethesda subsequently issued a notice to Interplay, saying the company was in breach of contract by allegedly not entering full-scale development of the MMO by the agreed upon deadline. In a regulatory filing in April this year, Interplay " adamantly" disputed that claim.
The MMO agreement also required Interplay to secure $30 million within 24 months of the original signing to fund development of the game, or else the license would be terminated. The agreement also required Interplay to launch the game within four years of signing. Bethesda would have been entitled to 12 percent of the game's sales and subscription fees.
If Bethesda prevails, Interplay would lose the rights to develop the Fallout MMO. There is little to show for the progress of the Fallout MMO in public venues, although many speculate that a mysterious title called Project V13 is in fact the Fallout MMO.
Bethesda accused Interplay of trademark infringement, two counts of breach of contract, and unfair competition. Bethesda is asking for injunctions against Interplay's manufacture, sale, and distribution of back catalog Fallout games, that a judge declare the trademark licensing agreement terminated, and that Interplay pay for damages and legal fees.
Interplay published the role-playing games Fallout and Fallout 2 in the 1990s, and the games still have a cult following. After financial turmoil in the first half of the 2000s, Interplay has been operating well below the radar, with the Fallout MMO being the company's primary point of interest.
