Bethesda appeal to halt Fallout Online development denied

The legal wrangling between Bethesda Softworks and Interplay over the use of the Fallout license continues. The latest development comes in the form of good news for Fallout Online developer Interplay, as a court ruling has again fallen in its favor.

Bethesda filed a preliminary injunction against Interplay in December 2010, a filing that was denied last month. An injunction would have prevented Interplay from using the story, setting, and characters from the Fallout universe. Bethesda appealed the decision, but a judge yesterday denied Bethesda's appeal.

With the injunction request and subsequent appeal denied, Interplay is free to continue development on Fallout Online, but there are still roadblocks ahead. Upon completion of the game, Interplay must attain Bethesda's "express permission" before the title can be released to market.

In a Securities and Exchange Commission filing from May, Interplay has stated flat-out that it "may not be able to successfully develop a Fallout MMOG." It cited its ongoing legal battle over the Fallout license, which began in April 2009 when Bethesda opted to revoke the Fallout MMORPG rights just as Interplay had entered into a development deal on the project. The two publishers then sued each other, setting off a protracted legal battle.

Fallout Online is currently in development at Bulgarian shop Masthead Studios (Earthrise). The game is currently slated for a launch sometime in 2012.