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Concept art from Fallout Online, which will never see the light of day.

When Bethesda Softworks picked up the rights to the Fallout brand from Interplay way back in 2004 (!!!), it had everything but MMOs under its control. In the exchange, Interplay kept the rights to create Fallout Online, and whether that MMO could ever come out became the center of a legal battle that is now finally over.

Bethesda Softworks parent company ZeniMax Media announced today it reached different settlements with Interplay and Masthead Studios, who was reportedly developing the MMO.

In exchange for the complete rights transfer, ZeniMax will pay Interplay $2 million for undisclosed reasons. For the moment, Interplay still owns the rights to Fallout, Fallout 2 and Fallout Tactics, but that will change on December 2013. That month will mark the moment when the merchandising rights transfer, too.

The completely separate dispute with Masthead involved Interplay’s claim that Masthead was in “full scale development” of a Fallout MMO that also did not infringe up on Bethesda’s own copyright ownership. The settlement has Masthead agreeing to not use any Bethesda material in current or future games.

“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,” said ZeniMax chairman, CEO Robert Altman in today’s release. “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."

The website for Fallout Online is still up and running, but don’t expect that to be true much longer.

Bethesda Softworks and Interplay have reached a settlement in their protracted dispute over the rights to the Fallout IP, specifically in regards to an MMO, which Interplay announced five years ago. Bethesda states that as part 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."

Bethesda parent company ZeniMax will pay Interplay $2 million "as consideration in the settlement," each side will pay its own legal fees, and Bethesda will retain rights to the Fallout intellectual property. Interplay has no ongoing right to the Fallout brand nor any Fallout intellectual property.

Finally, Interplay's rights to sell Fallout, Fallout 2 and Fallout Tactics will expire in December 2013, along with any other merchandising rights it had in association with those properties.

Bethesda and Interplay have been in and out of court for quite some time thanks to their spat over Interplay's Fallout MMO. Originally Interplay was given rights to develop an MMO based on the franchise, as long as, according to Bethesda, it "secured $30 million in financing for the MMO and commence...

The ongoing legal battle between Bethesda and Interplay regarding the Fallout MMO is rumored to have reached a critical turning point. According to Fallout fan site Duck and Cover, the two companies have reached a settlement. Specifics of the settlement are reportedly set to be revealed later this month.

Joystiq is unable to confirm whether or not the settlement has actually taken place, though the rumor appears to be in line with what we've heard from our own sources.

In October, Bethesda tried -- and failed -- to impose a preliminary injunction on Interplay, which allowed the latter to continue work on the beleaguered project. Will the Fallout MMO manage to make its proposed late 2012 launch window? We should have an answer soon enough.

Bethesda sued Interplay back in 2009 to block development of Fallout Online, an MMO based on the Fallout franchise. Since then, the court battle has continued, with Bethesda losing multiple decisions along the way...

There's been so much written about Interplay's nebulous Fallout MMO in the context of tedious litigation, it almost seems to welcome the franchise's thorough, irradiated reduction of modern society. But for those interested in legal tussles, here's where we stand today: Fallout property owner (and former licensee) Bethesda was recently denied a preliminary injunction against Interplay, in which it attempted to deny Fallout Online use of the franchise's story, character and other identifiable elements. Today, an appeal against that decision was denied.

United States Court of Appeals documents show that Bethesda's aim was to show "the district court abused its discretion and misapplied the law in concluding that Bethesda failed to establish a likelihood of irreparable harm." And while the property owner continued to delve into fears over Interplay's suspect financial stability (a potential source of said irreparable harm), today's outcome similarly found Bethesda's claims unconvincing.

The legal saga is still far from over, as Bethesda and Interplay must still legally settle their polluted licensing relationship and come to a conclusion regarding the possible release of Interplay's work -- which may continue for now, but still requires "express permission" from Bethesda to launch. What state the world (both inside and outside the game) will be in by the time the courts clear things up is anyone's guess.

The great and terrible Final Battle between Bethesda and Interplay regarding the latter’s right to create an MMO based on the Fallout license they part-sold to the former some years ago is still yet to be fought, but the litigation-loving folk at Bethesda have seen a potentially major setback in their efforts to take full control of wasteland adventuring. For a while, the two parties have been locked in snarling battle about whether Interplay are still allowed to make a Fallout MMO, with Bethesda claiming they failed to meet time and budgetary criteria outlined in the original license-selling deal. Interplay have claimed they’ve stuck the agreement, and thus continued with working on said MMO (actually contracting developing Masthead Studios to do it for them). Bethesda tried to stop ‘em, but a US judge has now stopped Bethesda from stopping them. Got that? (more…)

Legal battles, while academically interesting, are totes boring, even when they carry heavy implications for the future of a franchise, or even the industry as a whole. The monotony can turn something interesting into something no one cares about, so we're thankful that the Honorable John F. Walter has delivered an atomic buster's worth of smackdown to the ongoing case of Bethesda v. Everyone Else.

Bethesda had sought a temporary retraining order against Fallout Online co-developer Masthead Studios, claiming that the company had illegally sublicensed Bethesda's intellectual properly from Interplay. The court disagrees, however, and has denied Bethesda's ex-parte application, with Judge Walter essentially telling Bethesda that they've made their bed, and now they're going to lie in it:

"Plaintiff has not demonstrated that it will be irreparably prejudiced if the requested ex parte relief is not granted, or that it is without fault in creating the crisis that requires ex parte relief. Indeed, Plaintiff was aware as early as February 2011 that Masthead was potentially infringing its copyrights. ... Yet, Plaintiff waited seven months to apply for ex parte relief. The Court finds that Plaintiff unreasonably delayed in seeking relief, and that the emergency that allegedly justifies a TRO is self-created." Yowch. Considering that this is the second injunction request denied of Bethesda since this whole thing began, things are starting to look pretty good for Fallout Online. Is anyone else weirded out by the United States Government actively defending a series based on its complete and total destruction? Just us? Okay.

Just a couple of days after watching our nation's highest legal officers debate the impact of video games across this great country, it's time for us to return to a much sillier gaming lawsuit. Gamasutra obtained a June 23 court filing issued by Interplay regarding the developer's legally troubled Fallout MMO. The filing comes as a response to a preliminary injunction filed by Bethesda which attempted to prevent Interplay from using the franchise's story, setting and characters in their online opus.

Interplay's counter-filing explains, "For at least four years, Bethesda has known that Interplay interpreted its right to create the Fallout-branded MMOG to include copyrighted content from the Fallout universe in order to make the MMOG a recognizable Fallout game." We don't know, guys -- that seems a little unreasonable. When we heard Interplay was working on a Fallout MMO, we just assumed it would be a massively multiplayer online puzzle-platformer set in a colorful, kid-friendly version of ancient Rome.

Fallout Online and several other Interplay-developed titles may be in serious jeopardy, according to a US Securities and Exchange Commission report filed by Interplay last week. Develop discovered the filing, which spells out dire financial concerns for the immediate future of the company. Multiple times, the report states:

"If we do not receive sufficient financing or income we may (i) liquidate assets, (ii) sell the company (iii) seek protection from our creditors including the filing of voluntary bankruptcy or being the subject of involuntary bankruptcy, and/or (iv) continue operations, but incur material harm to our business, operations or financial conditions. These conditions, combined with our historical operating losses and our deficits in stockholders' equity and working capital, raise substantial doubt about our ability to continue as a going concern."

Similarly worrying, the company's current cash balance is approximately $3,000 (yes, that's just three thousand dollars, seriously), and it's operating with nearly $2.9 million in debt. The filing also illuminates the company's shift from paying its developers upfront for projects to working on a "net revenue sharing model," where devs get a cut of the final sales rather than paid when their work is complete. While that model sounds hugely profitable for third-party devs, and has been sporadically successful in the movie business, it seems to signal something less than wonderful in Interplay's case.

Additionally, the company's credit agreement has ended, which Interplay says "has resulted in a substantial reduction in the cash available to finance our operations." Rather than assure investors that everything will work out, the company again warns of potential negative outcomes, saying instead, "There can be no assurance that we will be able to enter into a new credit agreement or that if we do enter into a new credit agreement, it will be on terms favorable to us."

Currently, Interplay has five known projects, ranging from a lawsuit-entangled Fallout MMO to a sparsely detailed Earthworm Jim sequel. Several WiiWare and DSiWare projects are also in the works, though the fate of all five games could be grim given the wording of the company's SEC filing.

#fallout For over a year now, two companies have slugged it out in the courts, battling over the past - and in some cases future - of the Fallout franchise. This month, that battle took a slightly ridiculous turn. More »

Unofficial Fallout community wiki the Vault has posted snippets and analysis of another batch of court documents, courtesy of site founder Paweł Dembowski (posting as Ausir), in the legal battle between Bethesda and Interplay over the latter's licensed, in-development Fallout Online MMO and rights to distribute pre-Fallout 3 titles from the franchise. If the absence of recent developments in the suit had you wondering if the two sides had settled cordially, forget about it. The excerpts are most certainly lacking in holiday spirit, as the fiery debate appears to wage on.

According to the Vault, highlights from the new documents show Bethesda, which is the current Fallout IP owner, defending against Interplay's claims that it had denied the MMO developer rights to use "Fallout-related intellectual property assets." Bethesda maintains that it had licensed back to Interplay (the original IP owner) rights to the Fallout name only and not art assets, including the series' (literally) trademark Pip-Boy.

In a separate document, Bethesda took to the offensive, demanding Interplay hand over the contents of its internal Fallout Online design wiki as court evidence. Interplay objected, calling the wiki a "trade secret document" and suggested Bethesda had repeatedly turned down offers to "inspect" the wiki outside of the courtroom.

Interplay seems to have little choice but to fight on, even as it operated at a $205,000 loss in its June-September fiscal quarter. As Gamer/Law points out, the company is caught in a deadly gamble: Its future is dependant on completing Fallout Online for a planned 2012 release -- if the project doesn't get shut down by the courts first.

On the bright side, Interplay won out in a separate lawsuit earlier this month against TopWare, concerning the latter's infringement upon Interplay's "Battle Chess" trademark.

[Pictured: Fallout Online concept art]

In an interview with Edge magazine (excerpted by Eurogamer), Interplay president Eric Caen reconfirmed the company's plans to launch a beta of the MMO Fallout Online in 2012. He also specified that the "second half of 2012" will see the release of the commercial game.

Thanks to the ongoing legal troubles with Bethesda, responsible for Fallout 3 and New Vegas, Interplay is in the unique position of trying to promote its game without being able to show it -- because, according to Caen, "anything we show will help Bethesda in their fight." Of course, Interplay staffers are free to go to the store and pick up the current Fallout releases for themselves, which they are doing.

"What I can say is that of course we're playing what Bethesda is doing," Caen said. "We appreciate some portions of it, and we're not necessarily fans of everything. I think they miss a lot of the humor, and the fans seem to agree with that." To that end, the Fallout MMO is intended to be "extremely funny."

Nothing quite says "Our game still exists!" like Interplay's volley of email messages recently sent to folks who signed up for an account on Fallout Online's official website. According to a press release issued alongside the tease, it seems that this is just the first of many "tales from the wastelands" that early registrants will receive. Additionally, registrants will be "fast-tracked" for participation in the game's private (and eventually open) beta.

Interplay's "coming soon" game page still has "Project V13" (now better known as Fallout Online) listed as a 2012 release, so, ya know, we probably won't be venturing into those wastes anytime soon. Then again, by 2012, we might be wandering in the wasteland for real.

Interplay opens new teaser website.