Bethesda

Interplay’s gamble: the Fallout lawsuit continues

2 Comments
We now have confirmation that the lawsuit between Interplay and Bethesda over the Fallout IP has not been quietly settled (thanks to The Vault).  In fact, it seems to be hotting up.
The story so far…
Longtime readers will know this already from my previous posts (see here and here), but here goes:
Interplay sold the post-nuclear dystopian games series Fallout to Bethesda in 2007, as part of which they agreed that Interplay would retain certain licence rights, including the right to develop a Fallout MMO.  In 2009 Bethesda commenced this lawsuit, claiming that Interplay had breached that agreement, infringed Bethesdra’s trademark rights in the Fallout series and that, as a result, Interplay has forfeited all remaining rights in the Fallout IP.  Interplay denied Bethesda’s claims and counterclaimed that it still has rights in the Fallout IP, including the right to create a Fallout MMO (then known, rather mysteriously, as “Project V13”).
At the end of 2009, Bethesda unsuccessfully applied to court for a preliminary injunction effectively prohibiting Interplay from doing anything with the Fallout IP until the resolution of the lawsuit.  A month later, Bethesda launched an appeal against the court’s refusal to grant that preliminary injunction, which it later dropped.
Then it got a bit mysterious: at around the same time, a beta sign-up page for Fallout Online appeared, which appeared to suggest that Bethesda and Interplay were cooperating notwithstanding the litigation (the bottom of the sign-up page reads:
 
Fallout® is a registered trademark of Bethesda Softworks LLC, a ZeniMax Media company, in the U.S. and/or other countries, and is used by Interplay under license from Bethesda Softworks LLC. All Rights Reserved.”

Which suggests ofc that perhaps Bethesda and Interplay are cooperating over Fallout Online after all…which made me wonder if maybe there had been a handshake and the lawsuit had quietly been settled?

What has happened now?
In fact, the lawsuit continues – and how!  The Vault, a Fallout wiki, has received a further batch of court documents which both confirm that the lawsuit is ongoing and highlight some of the recent developments.  Now, I don’t yet have access to those court documents,  so I can’t establish myself exactly what is going on and how it relates to Fallout Online.  However, we do know that:

(1) Bethesda is continuing to argue that it owns all the IP rights in the Fallout series.

(2) Bethesda is now also arguing it gave Interplay rights over only the Fallout trademark and nothing else.  In other words, Bethesda argues that Interplay has no rights over any other Fallout IP, including for example artwork artwork (e.g. weapon art) or game concepts (e.g. the (in)famous “PIP Boy”), all of which Bethesda says it purchased from Interplay in 2007.

The practical effect of that argument (if successful) is that it would make it extremely difficult for Interplay to use much of the previous Fallout games in Fallout Online at all, which would be both a creative and commercial headache for Interplay.  Example off the top of my head: Interplay couldn’t, for example, just import Megaton (either nuked or not nuked, natch) into Fallout Online, at least as it is shown in Fallout 3 anyway. 

(3) Bethesda is also apparently taking other steps to make life difficult for Interplay, including demanding that Interplay provides it with access to its internal Fallout Online design document wiki as part of the litigation (which Interplay is refusing on the basis that it contains trade secrets).

So what?

Drawing all the above together, I think this is what has happened:

  • The reference to Bethesda on the Fallout Online beta sign-up site does not mean that there has been any deal between Bethesda and Interplay.  We know this now because the litigation is ongoing: Interplay and Bethesda cooperating over Fallout Online would only make sense if they had settled the lawsuit.
  • IF that’s right, then Interplay has taken advantage of Bethesda’s setbacks in the litigation by forging ahead with Fallout Online as a solo project.
  • And, IF that’s also right, then Interplay is running a serious gamble that it will win the lawsuit and therefore be able to release Fallout Online itself…
  • …BECAUSE, if Bethesda wins the lawsuit it would in principle have the ability either to shut Fallout Online down or to demand that it be transferred to Bethesda’s ownership.
  • It would also mean that Bethesda has uncontested control over the Fallout IP in the future.
  • Ouch.

I can see the commercial benefits of what Interplay is trying to do (if in fact I’m right on the above): get the game as far developed as possible, both as a bargaining chip with Bethesda in any negotiations and because, if Interplay wins, it already has a game ready to go.  On top of that, the Interplay Fallout MMO is now probably regarded by fans, gamers and the games industry as the Fallout MMO regardless of this lawsuit – so Interplay has won the PR contest there.  So it seems like a smart move in those respects…if it wasn’t for the legal risk that it could all be taken away from them.

That said, it’s worth remembering that ultimately all of this remains to be tested in the litigation, so the ownership and the future of the Fallout IP is still undecided.  
It also means I’ve stopped making any predictions about what or may not happen in this case – I’ll write another update when there’s another turn in this roller coaster…
Follow us at http://www.twitter.com/gamerlaw or subscribe to our email updates here
[Image source: Wikipedia]

Interplay and Bethesda quietly settle Fallout lawsuit?

Be the first to comment
For much of this year, Interplay and Bethesda have been at each other’s throats in a lawsuit over which of them owns the IP in the Fallout series of games (more on that here).  Earlier this year, Bethesda tried but failed to secure a preliminary injunction blocking Interplay from doing any further Fallout-related work, including work on Interplay’s rumoured Fallout MMO.  This was a severe, but not fatal, blow for  Bethesda in the lawsuit.
Then, not much seemed to happen.  Until, in June this year, details of a new Fallout MMO began to trickle out.  Did this mean they have done a deal?  As far as I can see, no formal announcement of the settlement of the lawsuit had been announced.
Now, TVG has spotted that the new Fallout MMO website includes the following text at the bottom of the page:
Fallout® is a registered trademark of Bethesda Softworks LLC, a ZeniMax Media company, in the U.S. and/or other countries, and is used by Interplay under license from Bethesda Softworks LLC. All Rights Reserved.”
This suggests very strongly indeed that a settlement has in fact been reached, with Interplay acknowledging Bethesda’s ownership (at least in part) of the Fallout IP, in return for which Interplay has been granted a licence to exploit the Fallout IP in relation to the Fallout MMO and possibly beyond. 
If so, it’s good to see that Bethesda and Interplay have been able to resolve their differences, but why not make a public announcement to capitalise on the new goodwill?  Also, what does this mean in terms of Bethesda’s creative/commercial involvement in Fallout Online – are they involved at all?  One would also imagine (and hope) that both sides have had their lawyers go over a new suite of agreements to ensure that the working relationship between them does not break down in the future.  Here’s hoping…
Image credit: WikiMedia
Follow us at http://www.twitter.com/gamerlaw or subscribe to our weekly email newsletter here

Fallout MMO details published – have Interplay and Bethesda done a deal?

Be the first to comment

Duck and Cover reports that Interplay have released a lot of new material on their Fallout MMO, named “Fallout: Online”, including a new website.

I’ve discussed on this blog several times previously the lawsuit between Interplay and Bethesda with the future of the Fallout IP (including Interplay’s Fallout MMO project) at stake.  So far, there has been no publicised resolution of that dispute.  So, either:

(1) Interplay is forging ahead with its MMO project despite the litigation – which could be risky if the lawsuit goes against Interplay (though it may be that Interplay was emboldened by Bethesda’s failure to obtain a preliminary injunction barring Interplay from using the Fallout IP pending resolution of the lawsuit); OR

(2) There has been an unpublicised settlement enabling Interplay to go ahead with its MMO (though one would imagine Bethesda would fight hard for Fallout MMO rights, given the value of that IP). 

So what has happened?

(Image credit: Wikimedia)

Follow us at http://www.twitter.com/gamerlaw or subscribe to our weekly email newsletter here

Bethesa vs Interplay: the Fallout lawsuit isn’t over

Be the first to comment
Reports that Bethesda and Interplay have reached a settlement in their long-running US lawsuit over the Fallout series are incorrect.  All that has happened is that one element of the lawsuit has been dropped by Bethesda.  Until we hear differently from the companies themselves, the rest of the lawsuit seems very much alive.
A quick summary of the events so far: Interplay sold the Fallout IP to Bethesda in 2007, as part of which it is said that the parties agreed that Interplay would retain certain license rights, including the right to develop a Fallout MMO.  In 2009, Bethesda brought a lawsuit claiming that Interplay is in breach of that agreement, has infringed Bethesdra’s trademark rights in the Fallout series and that, as a result, Interplay has forfeited all remaining rights in the Fallout IP.  Interplay denied Bethesda’s claims and counterclaimed that it still has rights in the Fallout IP, including the right to create a Fallout MMO (known mysteriously as “Project V13”.
At the end of last year, Bethesda unsuccessfully applied to court for a preliminary injunction effectively prohibiting Interplay from doing anything with the Fallout IP until the resolution of the lawsuit.  A month later, Bethesda launched an appeal against the court’s refusal to grant the preliminary injunction.  
Now it appears that the parties have agreed some sort of deal which involves Bethesda dropping its appeal over the preliminary injunction – this is the “settlement” that the internets have been talking about today.  You can see an extract from the court order at Duck and Cover.
BUT – this is the crucial point – as a matter of law that deal does not affect the key issue in the lawsuit, i.e. who actually owns the Fallout IP.  Unless that wider issue is also settled, then the ownership of the Fallout IP will in principle have to be determined at trial.  And we’ve seen nothing public about such a wider settlement so far.
That said, legal rules aren’t the only factor at play here.  Bethesda forced an early trial of strength by seeking a preliminary injunction, which led to the court weighing the strength of its case and finding it wanting.  Now Bethesda has abandoned its appeal against the refusal to grant the preliminary injunction.  After two legal defeats, Bethesda must be considering its options.  Perhaps it will fight on to trial.  Or, maybe we will see a real comprehensive settlement being reached in the near future – though clearly for a legal settlement to work there would first have to be a commercial agreement between Interplay and Bethesda over what they will do with the Fallout IP.  One obvious solution to this would be for Bethesda to buy Interplay, but that may be so commercially undesirable/impossible to the parties that that there is no choice but to fight on…
For the moment, we just don’t know what is happening in the wider litigation for sure.  That said, Gamespot reports that Interplay has made a SEC filing in which it stated “Interplay will continue to defend its rights and to pursue its Counter-Claims against Bethesda, for among other things, Breach of Contract and Declaratory Judgment and an award of damages, attorney fees, and other relief.” 
That doesn’t sound too hopeful for a quick settlement, but you never know.  Watch this space, readers…
[Image source: Wikipedia]
Follow us at http://www.twitter.com/gamerlaw or subscribe to our weekly email newsletter here

Bethesda vs Interplay: Bethesda appeals over Fallout litigation

2 Comments
The Fallout litigation continues with Bethesda reportedly going to the US Court of Appeal over its claim for a preliminary injunction to restrain Interplay using the Fallout IP, including developing ‘Project V13’,  Interplay’s rumoured Fallout MMO.  Bethesda’s original claim for a preliminary injunction was rejected in December 2009 (our summary of the dispute is here).
We have not yet seen any information regarding the grounds of the appeal, though no doubt they will emerge on the blogosphere in due course, at which point we will be able to have a closer look at the legal arguments.
In the meantime, Duck and Cover has released partial transcripts of Bethesda’s last attempt to secure the preliminary injunction – which do not appear to have been particularly successful.  The court’s formal judgment on the matter has not been released as far as we are aware, but from the transcripts of the actual arguments before the judge, it seems that Bethesda ran into difficulties with the judge over the exact reasons it sought a preliminary injunction.  The judge’s reasoning appeared to be that the purpose of a preliminary injunction is to prevent one party from doing something until the court has time to establish whether it is legally entitled to do that thing or not – but if Interplay is not actually working on its Fallout MMO project then logically there would be nothing to temporarily ban them from doing.  There were also issues regarding Bethesda’s claim of trademark infringement, which Interplay argued has no merit because there was never any breach of contract by Interplay and therefore it always owned the Fallout trademarks.
Now, some bloggers have derived from the above that Bethesda’s lawyers did not understand the purpose of preliminary injunctions.  That is of course possible, but also seems somewhat unfair.  A more likely explanation (assuming US preliminary injunctions are anything like their English counterparts, which seems very broadly right) is that they understand exactly what a preliminary injunction is for, understand that it could be an uphill struggle to win it at court, but they also understand that if they did win they could inflict serious damage on Interplay by effectively stopping them from doing anything with the Fallout IP for potentially quite a long time.  In fact, in some cases obtaining preliminary legal relief from the court can bring the other side to the negotiating table or even cause them to fold altogether (although obviously that doesn’t necessarily mean that Interplay would have done either).
So it may simply be that Bethesda gambled and lost the first time around.  Now, clearly, they would like another bite at the preliminary injunction cherry.  It will be interesting to see if they fare any better this time around…

Follow us at www.twitter.com/gamerlaw!
[Image source: Wikipedia]

News: Interplay vs Bethesda (Part 2)

2 Comments

We previously blogged about Interplay’s lawsuit against Bethesda regarding the Fallout series of games.  Now read on for another update in the ongoing litigation…

To recap, Interplay sold the Fallout IP to Bethesda in 2007 having retained certain rights, including the rights to develop a Fallout MMO.  Bethesda has now commenced this (US) lawsuit arguing that Interplay is in breach of that agreement and has infringed Bethesdra’s trademark rights in the Fallout series.  In particular, it seems that Bethesda is angry that Interplay sold the Fallout 1 and 2 games and expansions as a ‘Fallout trilogy’ at around the same time that Bethesda released Fallout 3.

The position now seems to be (courtesy of Game Politics) that Interplay has counterclaimed for Bethesda’s repudiatory breach of their agreement, apparently to the extent of claiming that the Fallout IP has reverted to Interplay and Bethesda now sub-licences the IP from Interplay (a complete reversal of the current position). 

It’s worth taking all of this with a heavy dose of salt since (as far as we are aware) the relevant court documents have not yet been published on the net and therefore there is no way of being sure of the accuracy of any of this (unless one of Interplay or Bethesda make a press statement on this anytime soon).

That said, defending an action against you for breach of an agreement by counterclaiming yourself for breach of the same agreement is a standard litigation tactic, which it seems clear Interplay has decided to adopt in this case.  Of course, the devil is in the detail: in order to substantiate a claim for breach of contract Interplay’s lawyers will need to set out in detail how the contract operated and exactly which provisions of that contract have been breached by Bethesda. 

Of course, the main question from all this is what will eventually happen to the Fallout IP.  If Game Politic’s report is accurate, then Interplay is not just arguing for damages for breach of contract, but a version of the Fallout IP back to it in some way – which is by no means impossible in theory, but it will be interesting to see how they play that argument out.  Keep watching this space…

News: Interplay vs Bethesda

Be the first to comment

Bethesda has commenced Court proceedings in the USA against Interplay over the Fallout series of games (story first covered by Gamasutra). 

The facts seems to be: Interplay sold the Fallout IP to Bethesda in 2007, as part of which they agreed that Interplay would retain certain license rights, including the right to develop a Fallout MMO.  Bethesda now alleges that Interplay is in breach of that agreement and has infringed Bethesdra’s trademark rights in the Fallout series.

So, a straightforward piece of commercial and IP litigation then, which is likely to be of interest to the industry, given Bethesda’s current (and Interplay’s historic) importance as publishers, but also of interest to gamers at large for the impact it may have on Fallout itself.  In particular, if this case continues there will eventually have to be disclosure about what exactly Interplay has been doing (or should have been doing) with the Fallout MMO.

In the meantime, a spirited discussion is fully underway at Gamasutra.  One really very interesting point which has already emerged from that discussion is the potential PR impact of all this – does this claim risk Bethesda alienating its customerbase, even if legally the Court eventually rules in its favour?  This is of course always an issue when a high-profile company decides whether to bring high-profile litigation and no doubt Bethesda will have carefully weighed up its option before deciding to act.  Either way, we will be keeping an eye on this one…