The Vault has received new court documents in the ongoing Bethesda v. Interplay legal battle over the rights to Fallout Online and the Fallout franchise itself. The January 7 filing is Interplay’s response to Bethesda’s recent claims that Interplay was only licensed the Fallout name for use in its Fallout MMO, and not any other elements derived from the Fallout games, including its amended counter-lawsuit against Bethesda.
Interplay's lawyer Jeffrey Gersh states that Bethesda’s allegations are “absurd” for a number of reasons, based on both the agreements themselves, and... quotes from statements by Bethesda Softworks executives. More details in the sections below.
Interestingly, Interplay also claims that Bethesda violated the TLA by attempting to “grant another party Interplay’s rights” regarding the Fallout MMO. No further details are given.
In June 2004, Interplay originally only licensed the rights to develop three Fallout games to Bethesda, while keeping the ownership of the franchise and retaining rights to develop a Fallout MMO, based on the Exclusive Licensing Agreement (ELA). Bethesda only purchased the rights to the franchise as a whole for $5.75 million in 2007 by entering into the Asset Purchase Agreement (APA), at the same time licensing the rights to develop and publish the Fallout MMO to Interplay via the Trademark License Agreement (TLA).
Based on the terms of the original 2004 ELA, Interplay was allowed to create a massively multiplayer online game using the name “Fallout” and based on elements of the pre-existing Fallout games created by Interplay, but not on any material created by or for Bethesda. However, the ELA was later superseded by the APA and TLA, the latter of which only vaguely states that Interplay can use the trademark “Fallout” to create a Fallout-branded MMOG. Because of that, Bethesda currently claims that starting with 2007, Interplay had no rights whatsoever to use any assets other than theFallout name itself, such as characters, locations, storylines etc. from previous Fallout games.
2004 Exclusive Licensing Agreement
According to Interplay, Bethesda’s claim that it licensed the rights only to use the Fallout trademark “in connection with a massively multiplayer online game” is incorrect, as the TLA specifies that it is to be used not just with any game, but with “its FALLOUT-branded MMOG... and for no other purpose”, while Bethesda’s current interpretation is that Interplay was to create a MMORPG under the Fallout name, but not related in any way to the Fallout brand. If Interplay were required to “divorce the trademark from the source of its good will, which stems from its reputation related to a particular and unique post-apocalyptic game world”, Interplay would be denied the benefits of using the trademark at all.
While the meaning of “Fallout-branded MMOG” is not clearly defined in the APA and TLA, Interplay states that it is clear that “Fallout brand” and “Fallout trademark”, as parts of the Fallout intellectual property, are two separate concepts, and are not used synonymously. E.g. the APA refers “to the brand and interactive entertainment software property known as "FALLOUT" and to the "FALLOUT" trademark”. According to Interplay, it is a distinction that arose in the 2004 Exclusive Licensing Agreement.
Given that the term “Fallout-branded MMOG” is not specifically defined in the APA nor TLA, Interplay states that the definition provided in the ELA should carry over. While APA states that it shall supersede the ELA, it still mentions that “in the event of a conflict of meaning, the terms of [the APA] shall control” over those of the ELA, which would mean that ELA is not superseded in its entirety, but only when the two agreements are in conflict. According to the filing, it “shows the parties’ intent to harmonize their Agreements”. If a term is defined in both APA and ELA then the APA shall control. However, if “Fallout-branded MMOG” is left undefined in the new agreements, “the parties would continue to rely definitionally on the ELA”, which, as stated by Interplay, “is the only expression of intent with regard to the content of a Fallout-branded MMOG”.
While Interplay does not claim that ELA is the source of any of its current rights, it merely defines “otherwise undefined terms within the framework of the transactions that followed”. Interplay also asked to be given an opportunity to "present evidence to show the parties' intent with regard to the meaning of the term 'Fallout-branded MMOG,'" to the court.
2007 Trademark License Agreement
Additionally, Section 3.4 Trademark Licensing Agreement also contains a detailed accounting of elements of the Fallout-branded MMOG that Interplay would be able to continue to use if it were not to satisfy the conditions of the license or if it was terminated for some reason before the release of the game (referred to as “Interplay-derived MMOG Elements”). These elements are ones that:
If Interplay did not have any rights to use any elements of the Fallout intellectual property aside from the name itself, there would be no reason to define “Interplay-derived MMOG Elements”, as all elements of the game would be Interplay-derived. There would be no reason to list in such detail elements of the Fallout-branded MMOG that Interplay would not be allowed to use if the TLA was terminated.
Section 9.3.4 of the agreement is also allegedly in conflict with Bethesda’s interpretation, as it requires Interplay to “wind down the operation of the Fallout MMOG” if TLA is terminated after the launch of the game and to cancel all user agreements. However, there would be no need for that if all Interplay was required to do for the game to cease being a Fallout game was changing the game’s name.
Bethesda itself, in its original complaint over a year ago (in September 2009) and subsequent court filings and statements, never alleged that Interplay could not use any elements of the Fallout brand, only claiming that Interplay’s continued development of the game violated the previously mentioned section 3.4 of the TLA, as a result of the agreement being terminated due to Interplay allegedly not fulfilling the financial requirements set forth in the agreement.
For example, J. Griffin Lesher, Executive Vice President for Legal Affairs of ZeniMax Media, stated that:
Bethesda also claimed that it needed preliminary relief against Interplay because Interplay was using Fallout elements, violating Section 3.4, and because “five years down the road when [Interplay] has finished the game”, it would not be able to “simply flick a switch and suddenly have a non-violative game,” which would not be a concern if Interplay were not allowed to use any Fallout elements aside from the title itself in the first place. Therefore, even Bethesda's own statements prior to the most recent filings assume that Interplay did have the right to use the Fallout setting, even if they also claim that that right has been terminated.