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Bethesda sues Interplay over Fallout

[UPDATE] Fallout 3 developer accuses original publisher of breach of contract, trademark infringement over stillborn MMORPG and selling Fallout games on Steam, GOG.com, and GameTap.

763 Comments

Three years after licensing the Fallout intellectual property in 2004, Bethesda Softworks bought it outright for $5.75 million from Interplay, which created the franchise. Under the terms of the deal, Bethesda licensed the rights to make a Fallout massively multiplayer online role-playing game back to Interplay, with the caveat that the fallen publisher had to start full-time development within two years. That deal imploded in April, when Bethesda, dissatisfied with Interplay's efforts, revoked the Fallout MMORPG rights.

Bethesda contends that Interplay's unsanctioned sales of games like Fallout 2…
Bethesda contends that Interplay's unsanctioned sales of games like Fallout 2…

This week, the Bethesda-Interplay disagreement was elevated to a legal level, when Bethesda filed suit in federal court in Maryland. The suit accuses Interplay of 10 counts of breach of contract and trademark infringement by not abiding by a trademark license agreement (TLA) it had with Bethesda. The first was in relation to the Fallout MMORPG, which stipulated that Interplay had to have raised at least $30 million in funding for the project by the end of March 2009. As evidence such fund-raising did not occur, Bethesda points to a June 30 filing with the Securities and Exchange Commission, which said Interplay had $2.54 million in debt and only $16,000 in cash assets.

Bethesda's complaint also claims that 11 days after being informed that the Fallout MMORPG license had been revoked and it could not enter into a deal with any third parties, Interplay formalized a deal with Bulgarian studio Masthead to develop the MMORPG Project V13.

The second part of the suit accuses Interplay of riding the coattails of Fallout 3 by re-releasing and repackaging older Fallout games without permission. Specifically, it says that the company was selling a compilation of Fallout, Fallout 2, and Fallout Tactics as boxed products called "Fallout Trilogy" and "Saga Fallout." The packaging of any such new boxed product needed to be approved by Bethesda, which claims it never did so. Bethesda also feels the name "Fallout Trilogy" was deliberately misleading consumers into thinking the compilation contained Fallout 3.

…diminished the Fallout 3 brand.
…diminished the Fallout 3 brand.

Finally, Bethesda accuses Interplay of entering into deals with several online game distributors without its consent, violating the licensing agreement yet again. GameTap, Good Old Games (aka GOG.com), and Valve Software's Steam service are all named as outlets that sold Fallout products without any permission from Bethesda, in violation of the licensing agreement.

Bethesda is demanding that the court formally declare that Interplay no longer has any rights to the Fallout name or trademark. It also wants the court to place a preliminary and permanent injunction on Interplay to stop it from selling any Fallout-branded products. It also wants Interplay to submit in writing a declaration that it no longer has any rights to the Fallout brand.

[UPDATE] Bethesda is not seeking a specific monetary amount in punitive damages, as many lawsuits do. However, it is, as is standard practice in virtually all lawsuits, asking to recover any attorney's fees resulting from the suit. It also wants Interplay to forfeit any profits it took from sales of Fallout games that violated the licensing agreement, as well as unspecified "damages pursuant to Delaware statutory and common law."

(GameSpot initially reported that Bethesda was seeking no monetary damages whatsoever, and regrets the error.)

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kingsi7e

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Bull****! Going to buy a Fallout trilogy from steam right now.

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DukeIgthorn

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Interplay dropped the ball way too many times in the past as well, mainly by dropping black isle..I say send them to their grave. Seeing as how they only have 16,000 in cash assets and 2.54 million in debt, that will be much sooner that later.

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smoman5000

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Bethesda has BEEN making money, why are they preying on interplay? im glad interplay sold a fallout bundle for the older games, i liked them and i cant believe theyre getting sued for that...crazy freakin world, bethesda should just stick to overcharging people for add-ons

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Frame_Dragger

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@Vault_Ausir: Have you ever considered that the time, energy, and effort you've put into exhaustive research and commentary on the history of this game, and these companies could be better spent? Perhaps you're a master of your craft, or maybe I'm speaking to the Dean of Medicine @ Johns Hopkins? Am I? Because... if not... that's a LOT of time and energy to dispel rumors about a company that is Bankruptcy watiing to happen. I don't mean this as an insult, in many ways, to quote John Oliver, this is a compliment. It does seem that you're wasting a lot of energy however, and talent for history.

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Maveryck69

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BAH! I like both game companies, but man i was looking forward to interplay making the mmorpg, and i was happy they were back to begin with because they made some great games, now looks like someone is gonna ruin that again because of money. On that trying to con people with calling the box set Fallout Trilogy...well if they cannot read its their own fault, i bought it and knew what was in it and am happy they came out with it.

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pukmok

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Looks like Bethesda is getting a bunch of money.

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ffviiifreak

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I see a lot of breach of contract but when the contract is so back handed as was that one it is to be expected.

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Vault_Ausir

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Also, the three developers of Fallout that formed Troika Games left Interplay early during the development of Fallout 2, when the name Black Isle Studios wasn't even made up. Fallout 2 was made mostly by different people, and they are the ones currently at Obsidian.

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Vault_Ausir

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@JemyM "Black Isle Studios made Fallout, not Interplay. The developers left the studio and formed Troika, after that Interplay closed down Black Isle Studio, most of it's remaining members are now Obsidian Software. Interplay shut down 2004. The new interplay thus have nothing to do with the Fallout brand. They didn't make it, they do not own it and one could make the case that the current Interplay didn't even publish it." You're wrong. First of all, Black Isle was never an independent entity, but simply Interplay's RPG division. So if a game was made by Black Isle, it was also made by Interplay, since Black Isle was always part of Interplay, and not an independent company or even a subsidiary. Second, Black Isle didn't even exist by that name during the development of Fallout 1. You won't find the name "Black Isle" in Fallout 1, just Interplay. The name was made up only during the development of Fallout 2. And third, one of the original developers of Fallout, Chris Taylor, is still at Interplay.

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Vault_Ausir

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@Craigboy0 "Interply made Falout 1 and 2, admittedly no who worked on the games still works there but whatever." Actually, you're wrong. Chris Taylor, the Fallout 1 lead designer, is at Interplay, working as lead designer of the Fallout MMO. << LINK REMOVED >>

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zero9167

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I think bethesda is just doing what they have to. Obviously Interplay was breaking contract and when that happens people get sued. It sucks, though, that the fallout MMORPG probably wont be coming out for a long time (if ever)

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Ronin893

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Ya got to get the money too. I'm sure there is a lot that has been lost and sold in an even short amount of time but I guess they figure that if they don't ask for money it will go through a lot easier.

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dennisheadley

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Seriously disappointed in the headlines on this site as they are just plain boring. This is a gaming site not the Wall Street Journal, so try and spice them up a bit. This one was a perfect example, it could have read: "Bethesda and Interplay have a falling out" or something like that.

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gnr90

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Well, Bethesda seems to be overreacting a little, but a contract IS a contract. If Interplay really cared about Fallout enough for them to justify breaching a contract, they wouldn't have signed the contract in the first place. I do agree that they're just exploiting the success of Fallout 3. Plus Bethesda isn't even asking for monetary damages, which I guess is kinda chill of them, but then again they don't really need the money, do they?

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EdensFall

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@ BtmnHatesRbn Hah hah hah hah! Oh wait... you're serious! Bethesda has already bought Interplay by buying Fallout, their only IP worth anything. The simple solution is for Interplay to honor the millions they were given and obey the law.

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Blue_Tomato

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I feel upset when I see someone trying to fight digital distribution, like through Steam. It's pretty obvious this is what is needed to fight PC piracy. I'm sure this move made them much more money than they would have if they didn't include Steam.

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Frame_Dragger

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@BtmnHatesRbn: What madman would buy 2.5 million in debt with only 16k in assets to balance it?

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BtmnHatesRbn

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Simple solution: Buy Interplay. Interplay was former gaming giant until 2000, when a series of bad moves (releasing console games on Windows for $9.99 each) and releasing retro collections (most that didn't work because of DOS-based installation or just being DOS games without DOSBox or MoSlo, etc.) killed their business. Then they were bought by Titus, famous for that Superman 64 travesty. So my advice is for this company to just buy Interplay, like how EA bought Virgin ten years ago.

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LOL88

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A contract is a contract

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Epicurus-Reborn

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They both seem to be handling this issue like a couple of children. Interplay MADE those games that they are selling now. Its such bull to me for some one to say "we have a contract so you cant sell any of those games you made years ago" Fallout 3 would never exist or never have been NEARLY as good as it is with out those original titles. Practically every weapon and enemy and faction in fallout 3 is from fallout 1 or 2. They should be thanking interplay. How dare they accuse interplay of riding Bethesda's coattail. But also interplay could have offered a deal in selling those old games with bethesda instead of trying to sneak it by them if they did have a contract. They should both grow up.

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Craigboy0

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AceLegend90 Interply made Falout 1 and 2, admittedly no who worked on the games still works there but whatever.

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Rhastafurion

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Bethesda isn't being a bully or anything Interplay aren't playing by the rules. They were silly to think they could get away with any of that. They shouldn't have sold the property if they weren't willing to fully part with it. I'll admit I miss the older Fallout games, they were something special. I also enjoy the direction Bethesda has taken it, even the DLC was entertaining. Interplay just needs to let go.

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Epicurus-Reborn

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damn this could mean those old fallout titles get taken off the market... i like bethesda but id hate for them to not start selling those simply out of spite. i better by that "trilogy" just incase.

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joelrong

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Interplay is already in deep waters, now its going to be worse! Bethesda did the right thing.

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smfes

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i support Bethesda in this one as it's their IP now and Interplay can't just take it again. nuff said.

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Frame_Dragger

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@noxian: Not to mention that in this case, there was probably a LOT of talk between Bethesda's and Interplay's lawyers before this came to a suit. This is a classic case of settling the state of a contract, not even with a HOPE of remuneration!

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BadMofo666

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LOL. Go Interplay. I don't know about you guys, but I always like to see people "stickin' it to the man." The developers at Interplay do all the work, while Bethseda just publishes it and takes most the profit. Of course, Interplay is now screwed though :)

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noxian

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@OrkHammer007 = I answered both your questions. 1) Your reasoning makes no sense. You don't need to constantly release you game to keep your IP. Square-Enix doesn't need to constantly release copies of Final Fantasy 1 to maintain their ownership and rights. They have their rights whether they actively release FF1 or not. Its the same here. Whether Bethesda should release it or not is irrelevant. It doesn't rob them of their ownership rights. Interplay has no right to release it without their approval. There is no issue to be averted. 2) like i said, does that make them stupid? yes. Do stupid people still buy games? Yes. even amongst gamers how many times do you read in forums people asking questions that are answered right here at GS. ALL THE TIME. You try stopping them from buying games. As for Bethesda they don't want them to stop, they want them to buy Fallout 3. 3) Here's where we need to sit back and have a lesson in lawsuits. Something doesn't appear on shelves, you start the proceedings for a lawsuit and news of it hits the airwaves the next day. It takes time to gather the materials for your case. It takes time to have your lawyers write up your case in a form that you can submit to the court. It takes time for lawsuits to process. Its not like you submit the paperwork, wait 10 minutes and you head to court. Let me cut you short right here, 3 1/2 months is fairly short in the world of law.

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Beastcake

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There shouldn't be any argument here. Interplay infringed on its contract, multiple times. The IP had been sold to Bethesda years ago when in development, therefore it wasn't their right to sell anything under the Fallout name without Bethesda's permission. Whether they knew that it would backfire on them is up in the air. But it seems like it was done out of desperation in order to meet the $30 million quota... but it doesn't look like they're ever going to get it.

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Excedra

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So much suing in the world....

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Frame_Dragger

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@OrkHammer007: The burden of following the strictures of a contract and the law are not for Bethesda or anyone else to enforce, outside of the courts. You can't enforce a breach of contract, whatever Minority Report would have you think. ;) Courts are set up to handle events in the past, and even when they try to anticipate future conditions, they tend to fail. In this case, it's very clear-cut, and Bethesda stood nothing to gain from purposeful delay. Why make an issue? The Doctrine of Stale Demand. Laches. Well.. okay first year law students, before you thumb me down, I know this isn't exactly Laches. However the principle of needing to enforce your rights in a timely fashion is the same, or those rights, and your ability to protect them in court begins to LAPSE.

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Frame_Dragger

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@ troykus87: Wow man (or woman)... that's um... you ever read a book by James Joyce called "Finnegan's Wake"? You have that writing style down pat, but minus the content. Look, clearly virtually everyone here disagrees with you, which doesn't make you wrong, granted. However, if you want to make your point, punctuation of SOME kind, and spacing would help. After that you can work on your content not being the ravings of a one-eyed madman in the desert. :lol: Just kidding.

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Jeaz

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I know that Fallout 3 is a big commercial success and everything, but IMHO its a disgrace to the Fallout series, it's just another step of dumbing down the gaming industry. Bethesda just bought an IP to get some PR and background instead of inventing (and thus increased risk) something themselves. Recently bought the box from gog.com and loving them.

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OrkHammer007

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@noxian: Neither of those answers the questions to my satisfaction. "Bethesda hasn't wanted to" basically says "they didn't care until they were released." They SHOULD have, or else this entire mess would have been averted. For that matter, how would the package be "misleading?" As I mentioned, I have it; as others have mentioned, it CLEARLY states on the front, in big letters, the names of the included games. If a person doesn't read the front of the package, they really have no business playing them (since a LOT of reading is involved in the game). Neither explanation satisfies those two questions. For that matter: why wait so long to make an issue of it? The "Fallout Trilogy" set has been on store shelves since early May. It's mid-September: that's approximately 3 1/2 months that not ONE WORD has been said about it.

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Bird-of-Prey

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Interplay as we used to know it does not exist anymore but they sure did make kick ass games 10+ years ago.

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noxian

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@OrkHammer007 "1. Why didn't they release the games themselves?" = Bethesda hasn't wanted to. This doesn't really beg that question at all though because its not particularly relevant. Its Bethesda's call, not Interplay's. If they don't want to rerelease them, so be it. "2. Since the newest of the 3 is over 8 years old, how, EXACTLY, would a re-release of any of the originals hurt sales of FO3?" = Likely they'd argue since they feel the package misrepresents having the "trilogy" (Fallout 1, 2, & 3) within it, people may be buying it thinking they're getting 3 and 2 bonus games, and not actually buying Fallout 3. Would those people be stupid? Yes. Is it possible? There are many stupid people out there. Either way, neither question is really relevant to why Bethesda is doing what they are doing. They are protecting their ownership rights to what they bought legally from Interplay. @Cobra5 "It still sucks. I hate it when IPs are seperated form their creators... its just silly." = Well then unfortunately you are many years too late for that as is, because the original Interplay in-house studio that created Fallout, Black Isle, had the IP taken from them a long time ago when intra-publisher politics had the execs of Interplay run them out of the company. The creators of Fallout haven't been involved for a long time and its because of Interplay, not Bethesda.

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OrkHammer007

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Just for the sake of reference, the box for "Fallout Trilogy" states that all 3 games are trademarks/registered trademarks of Bethesda (in small print, in the bottom-left corner on the back of the box). I would guess that Bethesda, therefore, would receive SOME money from the sales of the collection... ...which begs 2 questions: 1. Why didn't they release the games themselves? It would make sense to re-release them and try to profit somewhat from them (instead of letting them gather dust, or become abandonware). 2. Since the newest of the 3 is over 8 years old, how, EXACTLY, would a re-release of any of the originals hurt sales of FO3? At worst, it would just give newer players a chance to see where the idea came from. Argue the legalities all you want... THOSE are the questions I'd like to see the answers to.

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JemyM

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Black Isle Studios made Fallout, not Interplay. The developers left the studio and formed Troika, after that Interplay closed down Black Isle Studio, most of it's remaining members are now Obsidian Software. Interplay shut down 2004. The new interplay thus have nothing to do with the Fallout brand. They didn't make it, they do not own it and one could make the case that the current Interplay didn't even publish it.

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jemwalla

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[This message was deleted at the request of the original poster]

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Beefman555

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I think you people need to understand something: Since you apparently are all a bunch of children and don't understand how the real word works... Interplay broke trademark laws, it doesn't matter for -blam- that Interplay created Fallout, they sold all the rights to it and then they started using something they no longer owned without consent from the rightful owner. Interplay deserved to fail as a company if they did shady underhanded loser business like this. PS: Find something other than a crappy, in debt video game publisher/developer to be a fanboy of.

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abbnormmal

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Interplay sold the IP for $5.75 million, and entered in to an Agreement that they would raise $30 million in two years to support the IP? Meanwhile they are $2.5 million in debt, and their $16,000 in assets is probably the Computers and 360s they have sitting around their offices. Sounds like they sold the IP out of desperation, and never had any hope to raise $30 million. Too bad they did not ask permission to continue selling their older games.

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Warpld

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Too bad it doesn't seem like Interplay will be able to finance V13, because Masthead are very talented guys. Check out their current MMO project - Earthrise! Finally something fresh!

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Cobra5

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I remember them saying, during Fallout 3's hype phase, that they were huge fallout fans. I guess that's not actually the case. If all the information was true, I really have no idea what interplay was thinking.... I guess I can't blame bethesda for protecting the deal they signed. It still sucks. I hate it when IPs are seperated form their creators... its just silly.

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kardon16

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why so many people say fallout 3 is overrated? I have finished the game 3 times now and still think is one of the best games of this generation and one of the best purchases I have ever made.

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Malhound

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There was a new Fallout game coming out-and it features pop singer Adele.

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FallenOneX

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Maybe some of you missed that part of the article, but you can look it up: April 4 2007 Bethesda bought the IP, binding on April 9. Now do I think Bethesda should just let Interplay die in peace, yes. But if Interplay still made deal with other companies involving the IP they sold, they asked for it.

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lord_foamy666

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lawl. looks like the man is trying to hold you down troykus. almost like what a certain larger company is doing to a smaller one ;-)

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BloodMist

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HHHHHAHAHAHAHA!!.....Ahh...Interplay was hardly a developer, they were a PUBLISHER.Shows what the vast majority of nay-sayer's comments are worth, doesn't it?

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Ein001

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Epic fail. F Bethesda, if Fallout 3 had any other name it would have been a flop. Even if they did pay for the rights to the name, them accusing someone else of riding coat tails is absurd. Never buying Bethesda software again, should have stopped at Daggerfall. I don't understand how an average-at-best game developer like Bethesda succeeds and an amazing developer like Interplay fails.

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-Beatz-

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@Hyperion_1400: Actually, if you'd have even read it, it did say Bethesda "bought out" the Fallout brand alltogether.

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