On September 8, 2009 Bethesda filed its original lawsuit against Interplay in the Maryland District Court in Baltimore. In October 2009, Interplay filed its own counter-lawsuit, arguing Bethesda is in breach of contract and the contract to sell the rights to the series to Bethesda is null and void and Interplay owns the franchise again. Aside from disputes regarding the distribution of past Fallout games, Bethesda Softworks claims that Interplay was in breach of the Fallout MMO agreement for failure to commence full scale development by April 4, 2009 and to secure certain funding for the game. Interplay disputed these claims and that it had the right to develop Project V13, together with Bulgaria-based Masthead Studios. On January 9, 2012 Bethesda Softworks announced that the long-lasting litigation between Bethesda and Interplay, over the rights to Fallout Online ended with a settlement in which Bethesda acquired full rights to the MMO in exchange for paying Interplay $2 million. Interplay's rights to sell the original Fallout games will also expire on December 31, 2013.
The base concept for the setting is the "World of Tomorrow" as imagined in the Golden Age of Science Fiction. This means that before the Great War, the Fallout world was more or less what the people of the 1940s and 1950s thought things would be like in 2077.
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Bethesda Softworks has announced that, as was to be expected, the long-lasting litigation between Bethesda and Interplay over the rights to Fallout Online ended with a settlement in which Bethesda acquired full rights to the MMO in exchange for paying Interplay $2 million. Interplay's rights to sell the original Fallout games will also expire on December 31, 2013.
See the full press release below:
BETHESDA SOFTWORKS® IN INTERPLAY LITIGATION
All Fallout® Intellectual Property Rights
Belong Exclusively to Bethesda January 9, 2012 (Rockville, MD) –ZeniMax® Media Inc. today announced that a settlement had been reached in the lawsuit filed by its subsidiary, Bethesda Softworks®, against Interplay Entertainment Corporation in 2009, Bethesda Softworks LLC v Interplay Entertainment Corp., seeking cancellation of the license granted to Interplay to develop a massively multiplayer online game (MMO) based on the Fallout brand. Bethesda maintained in its complaint that Interplay had failed to meet the conditions for the license and the license was therefore of no continuing validity.
Under the terms of the settlement, the license granted to Interplay to develop the Fallout MMO is null and void, and all rights granted to Interplay to develop a Fallout MMO revert back to Bethesda, effective immediately. Interplay has no ongoing right to use the Fallout brand or any Fallout intellectual property for any game development. ZeniMax will pay Interplay $2 million as consideration in the settlement, each party will bear its own costs of the litigation, and Bethesda will continue to own all Fallout intellectual property rights. Interplay will be permitted to continue to sell the original Fallout ®Tactics, Fallout® and Fallout® 2 PC games through December 2013, after which time all rights to market those games revert to and become the sole property of Bethesda. Under the original agreement pursuant to which Bethesda had acquired the Fallout property, Interplay was granted certain merchandising rights to sell those original Fallout games, but those merchandising rights will now expire on December 31, 2013.
The lawsuit against Interplay arose after Bethesda Softworks acquired all Fallout intellectual property rights from Interplay in April 2007, and conditionally licensed back to Interplay certain trademark rights to make a Fallout MMO, provided Interplay secured $30 million in financing for the MMO and commenced full scale development of the game by April 2009. Bethesda alleged in its complaint that Interplay failed to meet either condition of the license back agreement but refused to relinquish its license and insisted it would develop a Fallout MMO. Bethesda filed suit to declare the license void.
In a separate but related matter, Bethesda commenced a second action against a purported developer of the Fallout MMO, Masthead Studios, Bethesda Softworks LLC v Masthead Studios Ltd. In the course of the original lawsuit against Interplay, Interplay had claimed that it had engaged Masthead Studios to develop the Fallout MMO under its license, and contended that Masthead was engaged in full scale development of that game. Bethesda filed its separate lawsuit against Masthead to assert copyright infringement and other violations of Bethesda's intellectual property rights. Under the MMO license granted to Interplay, Interplay was not permitted to sublicense any rights granted without the prior approval of Bethesda, approval which had never been requested or granted. In responding to Bethesda's lawsuit, Masthead denied that it had been using any of Bethesda’s intellectual property in developing an MMO. Masthead and Bethesda settled that second lawsuit on December 29, 2011. In the settlement, Masthead acknowledges it has no legal right to use any Fallout intellectual property, and agrees it will not use any such intellectual property of Bethesda in the future. No payments were made by either party as part of this settlement. The two settlements resolve all pending litigation over the Fallout intellectual property owned by Bethesda.
Robert Altman, Chairman and CEO of ZeniMax, expressed satisfaction on behalf of the Company with the resolution of the two lawsuits saying, "While we strongly believe in the merits of our suits, we are pleased to avoid the distraction and expense of litigation while completely resolving all claims to the Fallout IP. Fallout is an important property of ZeniMax and we are now able to develop future Fallout titles for our fans without third party involvement or the overhang of others' legal claims."Following the purchase of the property, Bethesda Game Studios, the 2011 ‘Studio of the Year’ and the development team behind the 2011 ‘Game of the Year’, The Elder Scrolls® V: Skyrim™, developed Fallout® 3. ZeniMax Media’s publishing subsidiary, Bethesda Softworks, published Fallout® 3, a highly acclaimed sequel which won ‘Game of the Year’ honors in 2008, for Xbox 360® video game and entertainment system from Microsoft, PlayStation®3 computer entertainment system, and Games for Windows. Bethesda also published the popular title, Fallout: New Vegas®, in 2010 for the same platforms. Fallout: New Vegas® Ultimate Edition, which will include the original game and the award-winning downloadable content in one special package, is planned for release by Bethesda in early 2012.
Duck and Cover reports that a settlement on the long-lasting litigation between Bethesda and Interplay has finally taken place. Looks like it actually took place on the day of the trial, and the details of the settlement are to be announced this month. Here's more details:
So, who has the rights to Fallout Online now? Is Interplay going to make it, or did Bethesda pay them for the full rights? Stay tuned for more info!
- The burden of proof is on Interplay to prove 3 things.
- it has a trademark and copyright license
- it was in full scale development
- It had secured funding of 30 million.
- Interplay is not precluded from presenting parole evidence.
- Interplay is not precluded from presenting evidence showing minimum financing and full scale production.
- Affirmative defense of mistake will not work for Interplay.
- Bethesdas witness can be at the trial, but can only testify as to what an MMO is and what it entails...he cannot comment on what Interplay has done.
- Trial will be at 9:30 A.M. on Dec 12
- Interplay thinks it will take 2 to 2 1/2 days for the entire trial.
Telephonic Motions Hearing held on 12/5/2011 re  MOTION in Limine filed by Bethesda Softworks LLC and  MOTION in Limine No. 1 filed by Interplay Entertainment Corporation - Argued - "GRANTED" in part and "DENIED" in part for reasons stated on the record by Chief Judge Deborah K. Chasanow. (Court Reporter: Tracy Dunlap) (td, Deputy Clerk)
Stay tuned for information about the actual trial!
So, in response to yesterday's news of Bethesda's motion in limine against Interplay, they have countered with their own. Pasted directly from Duck and Cover (it's lazy journalism on my part but some serious browser issues are preventing me from writing out my own interpretation as I usually would, apologies):
Now Interplay has fired back, filing their own motion in limine in order to try and stop Bethesda from producing new evidence in the form of an expert witness that was not at discovery. The expert witness is Thomas Bidaux, former Director of Product Development at NCSoft Europe and now a founding partner at consulting firm ICO Partners. Interplay's lawyer, Mr. Gersh, has attempted to work out an arrangement to depose Bidaux, but Bethesda has been less that cooperative. Here is the meat of the motion:
Their number 1 reason for this is pretty straight forward:
(1) a complete statement of all opinions the witness will express and the basis and reasons for them; and,
(2) the facts or data considered by the witness in fonning them.
(See, FRCP 26(a)(2(B)(i-ii).)
Rule 37(c) ofthe Federal Rules of Civil Procedure clearly authorize a court to preclude the introduction of evidence not disclosed in violation ofFRCP Rule 26(a). Rule 37(c) provides in relevant part:
(1) Failure to Disclose or Supplement.'lf a party fails to provide information or identify a witness as required by Rule 26(a) or (e), the party is not allowed to use that information or witness to supply evidence on a motion, at a hearing, or at a trial, unless the failure was substantially justified or is harmless.(FRCP Rule 37(c) (1), emphasis added.)
One of the other main reasons Interplay's lawyer wants Bidaux barred from the witness stand is because Bethesda "refused to permit his deposition," according to the motion. Interplay's attorney is very unhappy with Bethesda's legal team. They have apparently stonewalled him and refused to confirm dates, times, etc. and their attempt to insert new evidence in the form of Thomas Bidaux into the jury trial was apparently the last straw for Gersh. This is my favorite part of a letter from Gersh to Bethesda's attorney:
Bethesda's lawyers refused, by the way, to allow their expert witness to conduct a telephone deposition rather than have Interplay's lawyer fly out to Washington D.C. when they knew he could not. Interplay's lawyer filed the motion in limine to try and stop the introduction of this new evidence, as the jury trial is now only 4 weeks away - hardly enough time to prepare in the legal world. Gersh also suggests in Interplay's motion that Bethesda be sanctioned by the court for its "discovery conduct."
Stay tuned for more exciting episodes in court. Feel free to insert your "law never changes" jokes into the comments section below.