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Bethesda Sues Interplay Over Use Of Fallout License
by Kris Graft
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September 11, 2009
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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.
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I think this is false. Any gamer worth their salt is going to know the difference between the companies and the styles of each of the games.
It's rubbish Bethsesda is suing Interplay for a compilation pack.
It's a shame that Interplay, once home of some the greatest RPG's, is having such troubles.
I would love to see another Descent someday.....
Seriously, they already had the reputation of releasing buggy stuff, now they sue people like that? What they are aiming for, become a new EA?
This is tragic... I really feel for the Interplay dudes - they're trying to make a living after their crash in the early 2000's.
:(
Fallout 3 was a big hit. Somebody who's heard good things about it but isn't very knowledgable about the franchise will see "Fallout 3 trilogy" on the shelf and assume that it contains Fallout 1, 2, and 3. They could even push the illusion further by saying "Contains all three fallout games from Interplay" (counting on many customers not knowing that Interplay didn't do Fallout 3). The mention of Fallout tactics could be put in very small print in an obscure corner of the box.
I'm not claiming that Interplay did or didn't do this, but the potential for this kind of abuse is probably why Bethesda requires pre-approval of packaging and advertising. They want to make sure they don't lose sales because somebody bought the "Fallout Trilogy" thinking that they'd get "Fallout 3".
Again, I make no accusations, and I take no sides, but I do see potential for validity in this lawsuit, depending on exactly how Interplay packaged and advertised their Fallout trilogy.
And Kevin, yes, I'd also very much like to see a new Descent...
id sighed a contact to be acquired by Bethesda - Bethesda didn't buy them out!
You people are talking about 'morals' of being a good company, being kind because they had it though - your looking at it from the completely wrong perspective! Bethesda is a company, they're a business, not a bunch of people who work off good intentions for others. To make sure that they don't hurt there feelings.
Honestly, some of you just make be shake my head.
And no Patrick, they could do no such thing. Bethesda OWNS the rights to the Fallout franchise - I mean, they payed a huge $5.75 million for the thing! They don't want it to go badly for them.
I hope that someone reply's to this, because clearly I have more sense then some of the other people posting here. Yeah, you may feel sorry for Interplay, but it's there own fault.
I was being cynical.
No need to overreact like that; but for me - Bethesda is a company I have grown to somewhat loathe.
They bought out iD, the Fallout franchise (which they essentially transformed into, and I know you've heard this before, "Oblivion With Guns"), and now they're suing a crippling company for sales infringement or somesuch.
They have the grounds to do so, however this is pretty harsh. Interplay are the guys who brought us Baldur's Gate, remember. Without them where would the RPG genre be today?
Look at it this way: if this is Morrowind's Bethesda we're talking about, I'm sure I'm not the only one in saying that they should've sticked to their own IP(s), and improved upon them. I know I'm not alone when I say they should've made a better Elder Scrolls comeback (from Oblivion, which some would argue isn't an RPG), instead of buying out and creating a Fallout sequel.
Want to know something really peculiar? When Bethesda were developing Fallout 3 they wanted to rename "Jet" into Morphine. However due to Australia's classification bureau (and other things I am not too certain about), they were coerced into keeping its original name.
"Why would they want to change it?" Some think it's because they didn't study enough about Fallout's IP or that they were trying to appeal to the masses. But one thing you should learn about IPs is that NEVER change key aspects or lore to adhere to a certain market.
I'm rambling on now... time for some tea.
Seriously, I'm appalled that anyone thinks Bethesda isn't in the right to do this. Another company is literally selling Bethesda's game as if it's their own (no, it no longer is).
I guarantee you there isn't a game company in the world that wouldn't sue over this. If the facts are correct, that is. Which we don't know.
They may be in the legal right for the most part, but Bethsda's behavior is distastefully predatory.
I'm sure a number of Bethsda's executives grew up loving Interplay's games, and here they are potentially bankrupting them to seize an inconsequential licensing right. Honestly, I do not think Bethsda has the technical wherewithal to build and properly maintain an MMO.
I agree with you 100%, but I am asserting how sad it is that it's Interplay and not someone else.
I loved the original Fallouts; was utterly immersed in them and still think over my experiences in them to this day, years later. I enjoyed playing Fallout 3 at the time, but do not have any fond memories of the experience, was bored by the time I completed it, and have not purchased any of the expansions.
This news that Bethesda has decided to sue the very people who were generous enough to sell them the license to develop another Fallout has made me dislike Bethesda a lot. I didn't before, but because of their treatment of Interplay, I do (hate is too strong a word) dislike them now. They would have to put a lot of work into giving theior next game any depth for me to have a second glance at it. So if there are even a few hundred other people like me, Bethesda has shot themselves in the foot, and should have taken into account the potential loss in earnings this kind of business practice could breed.
1. Went behind Bethesda's back signing digital distribution deals
2. Went behind Bethesda's back releasing "Fallout Trilogy" (which is a name/box Bethesda most definitely would NOT have approved; trilogies tend to be "the first and its two sequels," not "the first two and a spin-off")
3. Violated the agreement to start working on an MMO
The first mistake is probably the most egregious one, since they made a bunch of money while giving none of it to Bethesda. Releasing the "Trilogy" that doesn't include Fallout 3 was also a mistake, because the average consumer will not immediately realize this. Even a little confusion is undesirable. Bethesda may have had some plan in the works to make another deal with Interplay to release an actual Trilogy with all three games, but now we'll never know.
That, combined with Interplay's decision to not begin work on the MMO, is pretty much a bunch of "F-offs" towards Bethesda. Since they're also contract violations, Bethesda had every reason to do what they're doing now. Just because Interplay is small and doesn't have much going on doesn't give them the right to pull all these shady moves. Soon, when a judge rules in favor of Bethesda in this case, Interplay will either lose ALL rights to Fallout, or have to give a large chunk of the money they made from the Trilogy to Bethesda. I honestly hope they go under, because those kinds of practices have no place in the gaming industry.
"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."
However, Gamespot says:
"No monetary damages are being sought. "
http://www.gamespot.com/news/6217290.html?tag=latestheadlines;title;1
Which one is correct? I am more inclined to believe Gamasutra myself.
To the outside world, America appears to be trigger happy when it comes to suing people. If that's a practice that makes you happy, then fine, enjoy your paranoia. I prefer to encourage more mutually beneficial means of sorting out disagreements.
Recall if you will the hyped promises of Oblivion's Radiant AI and the "hundreds" of endings claimed months before Fallout 3's release. Intellectual dishonesty abounds at Bethesda and these mostly frivolous legal claims are simply more of the same.
EDIT: To be clear, the MMO development/reversion issue is legitimate. The Trilogy box? Please. The cover of the retail box clearly depicts which products are included. Caveat emptor.
Box Image: http://fallout.wikia.com/wiki/File:FO_Trilogy_Front.jpg
Second, whoever said Interplay was "generous" by selling the Fallout franchise needs to rethink their perceptions of Interplay. Interplay might have spawned some great games but their management obviously hasn't been so great. They also stopped producing really good titles of late. Maybe they could've done a better job at managing the Fallout franchise by licensing it out rather than selling it (honestly, $6 million for all rights to that franchise? Cheap...) so they could retain their ownership of it. Let's face it, Interplay's management is crap and the thought of them actually managing the development of the MMO made me roll my eyes. Even better they'd tapped an unknown and untested developer from Bulgaria to build it.
In the end, I think Bethesda needed to slap Interplay around a bit. The company's acting like that fuck-up of a brother that no matter how many times you try to pick them up and dust them off, they always find a way to screw themselves over again. I'm usually on the side of the underdog but there are limits to who I'd back.
What would really rock would be a packaging of all of the games and the DLC in one super-bundle.
Interplay hasn't been Interplay for a while. Lately (last 5 years) it's been specific individuals going around trying to raise capital for various projects and management of fragmented teams, who haven't been paid many times. Remember all the problems with Interplay employees not getting paid, etc. Do you think the owners went without money?
It's hard to pass judgment here unless we know the entire history of this relationship and read and understand the complaint. One fact is that the principals at Interplay took money for the Fallout franchise sale. Would you sell off your company to someone for millions of dollars and expect to continue doing that same business? Would the purchase agreement allow this? Probably not.
It seems unlikely to me that Interplay is the "David" in this fight. I see a shell of a company, that at its height, enjoyed great talent/product; but, now it's as one person stated bove...the f-ed up brother...going around causing trouble as usual.
This type of behavior doesn't help our industry move forward in my opinion. The Interplay folks should move on and replicate their first successes by hiring AAA talent and making new and innovative product. This WILL help our industry!
Well, while mostly true, there is at least one original Fallout developer still at Interplay - Chris Taylor.
I think our industry sometimes rewards failure for some odd reason. Bad decisions have to be accounted for eventually. I think our sector would be more professional if we all held a higher expectation of managers and owners to be honest and hold integrity. For example, this means not asking employees to work unles you know you can pay them. There have been some recent public examples of management working employees for their final two weeks, knowing they can't pay them. What's up with that?
I know quite a few who definitely weren't, and played Fallout 1 and 2 after Fallout 3.
Interplay will probably countersue unless they really don't have a leg to stand on. Without access to the actual contract we probably can't pick a side with any accuracy. If there's no countersuit this is just kind of boring and I'd expect the injunction to be granted even though claims of irreparable damage are always laughable. (Claiming irreparable harm is necessary for the injunction, which is why you see it so often.)
-Interplay no longer owns the rights to the Fallout IP
-Interplay is publishing games without Bethesda's consent (which because of point #1, is kind of copyright infringement)
-Interplay agreed to something in a contract they didn't do, aka "breach of contract"
-Bethesda files an injunction to stop them from making money off of Bethesda's IP (yes, it's their IP now)
-Bethesda does so without seeking any monetary reparations, they just want them to stop and admit they don't own the rights to the IP anymore
So explain to me how this makes them shameful, disgraceful, etc? I know a lot of you loved the original Fallout games and just hate the fact that your bitter enemy Bethesda bought the rights, and managed to make a game that was both critically and commercially successful, but maybe if you can put that aside for a second, you'd see that Bethesda has a point here.
See here: "Similarly, where the rights to a trademark are assigned to another party in gross, without the corresponding sale of any assets, the trademark will be canceled." (http://cyber.law.harvard.edu/metaschool/fisher/domain/tm.htm)
However since they already license the trademark to Interplay and are merely claiming that Interplay has overstepped the rights granted to them through that license, this may be more of a special case. Or my interpretation of the above could be off.
Regardless, the gamasutra reporting indicates that they're seeking damages (probably tripled) and legal fees, as well as the cancellation of the existing license. They are actively seeking to harm Interplay's business here as they view it as infringing on their own.
Bethesda OWNS Fallout, they brought it, it's THEIRS, not Interplays, not anymore, they signed the contact, they HAVE to by law stick by it.
Is there something in that you don't understand there?
Company's don't care about good-will when someone else is breaching a contact, I certainly wouldn't.
You people talk about respect when you seem to have no idea about anything in the world of law.
No matter WHAT you say, Fallout 3 is hugely successful and brought new life and fans to the franchise.
Bethesda is in there own rights 100%, no question.
It's not as if the people who made the game would be the ones spear-heading this law suite anyway, there lawyers and business advisers would be.
I honestly can't get over how stupid you people are being... it's the law, it's the way the world works, grow the f**k up. I'm not trying to over react, but your acting worst than two year old's that don't get there lollipop. Some of you must be 10 and can't get it around there heads why they did this.
When you take all there stock, that's buying someone out.
Count me suitably chastened. Sorry if my assumption caused any offense.
I don't respect Bethesda much any more, but maybe I didn't already, maybe this has nothing to do with it. I know they are 100% in the right - that is not my point. My point is that acting to sue, although it is potentially good for their bottom line, may engender some ill will from their customer base. If I were a business I would care more about this. I wouldn't have to, it just would seem a smart thing to do, you know, to look evil to your fans. That's all I'm saying. They are so big it probably doesn't matter. It does matter to me, so I posted. But maybe I shouldn't poke my nose where it doesn't belong. Carry on.
Bethesda could work with Interplay to resolve issues the recent economic nosedive caused. And while Interplay didn't get prior approval, it's been said Bethesda was vetoing any deals such as that to prevent Interplay from getting money.
Also, on topic: hands up all the Interplay fanboys here who genuinely *don't* think someone there deliberately had the idea of re-releasing the games as "Fallout Trilogy" to capitalise on confusion? I personally own a set from around 2004 containing the same games (1, 2, Tactics) entitled "Fallout - The Ultimate Collection"; why rebrand other than to explicitly use the word "Trilogy"? Why switch to the word "Trilogy" other than to imply 1, 2 and 3?
Open and shut case in favour of Bethesda imho.
http://fallout.wikia.com/wiki/File:FO_Trilogy_Front.jpg
I haven't done a whole lot of research on trademark infringement cases but I know this much. So maybe people shouldn't be pontificating on how it's an open and shut case for one side without knowing anything about trademark law or the contracts involved.
Our mutually subjective opinions - what all opinions are - are different only in that mine isn't informed by an ambition to work in the industry.
Sorry, you are right - I suppose who's right/wrong in the legal dispute is also a matter of opinion. What I was trying to convey was the objective fact, which differentiates Bethesda capitalizing on Interplay's success, is that they paid - handsomely - for the right to do so.
Is it so difficult for you people to understand that not everyone that plays video games has an encyclopaedic knowledge of them?
The fact that the Fallout trilogy doesn't include Fallout 3, is only obvious if you're aware that the IP changed hands in the first place.
http://www.zenfar.com
In addition to Glen's comment that it's not always the gamer buying the game, I'd also add that gamers don't always buy games with a nice box to look at. Amazon.com, Gamestop's online store, and numerous other places will list games where it may not be quite as clear what's contained there.
And, of course, even if you were entirely right, game companies care just as much about selling to idiots as selling to smart people. Same money either way.
Personally I still consider Fallout 1 / 2 to be the best PC RPGs of all time myself... it'll be interesting to see what Project V13 is all about; I hope they can finish it.
I probably dont represent much of the gaming population, but what this move means to me, or what it did to me was to make me think twice before buying another Bethsda game.
http://nextgencopyright.blogspot.com/2009/11/bethesda-softworks-llc-v-interplay.
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