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Interplay countersues Bethesda
October 17, 2009
On the Raging Bull Stockholder forum, an Interlay stockholder called frymuchan details the countersuit filed by Interplay against Bethesda in reaction to Bethesda's lawsuit over the rights to Fallout Online and the original Fallout games. Interplay argues Bethesda is in breach of contract and the contract to sell the rights to the series to Bethesda is null and void and Interplay owns the franchise again. These are excerpts from the stockholder's posts:
- "Interplay argued that they purposefully retained the rights to the original Fallout games when selling the Fallout license to Bethesda knowing full well (as did Bethesda) that Interplay was going to exploit the original Fallout games upon release of Fallout 3. Why would Interplay keep the original Fallout rights and sell Fallout for so cheap unless this was built in as part of the package deal? The original Fallout games are only worth something in relation to sales generated from the release of FAllout 3. Therefore, Interplay did not harm Bethesda in any way by selling the original Fallout games. Interplay has a right per this deal to exploit the original Fallout games and to not see this as unfair competition with Bethesda. Also, Bethesda under their initial agreement did not have any rights to determine how Interplay chose to exploit selling their Fallout games. Bethesda had the right to inspect promotional material/marketing that Interplay used with their original games ONLY to make sure that Interplay wasn't unfairly trying to confuse their game with Interplay's. However, a key component of that provision was that Bethesda could not UNREASONABLY WITHOLD their approval, which Bethesda seems to be doing in this case. Most importantly, however, Interplay did not produce any promotional material or marketing for their Fallout games, which is the only statement that is made in the original agreement (the original agreement regarding the original Fallout games only covered marketing and promotional material, of which Interplay had none. None of the other complaints that Bethesda made against Interplay were a part of the original contract, and are thus null and void). Interplay sold the original Fallout games with very little in the way of packaging materials (a very basic instruction manual), and Interplay did not spend any money on marketing, which can be verified in their 10-K. I remember saying how odd it was that Interplay suddenly had a statement on their website that they were selling Fallout games at Best Buy and that there was no promotional material or marketing for this. Interplay was simply complying with the contract. It all makes perfect sense now in hindsight.
- Also, VERY, VERY interesting is that Interplay is COUNTERSUING Bethesda. Interplay said that they did disclose the Glutton Creeper deal with Bethesda and Bethesda suddenly terminated the deal with Glutton, which resulted in Glutton suing Interplay. Interplay wants that money back that they had to pay Glutton and legal fees from this. Interplay also claimed that Bethesda materially damaged their name and business by falsely telling Gametap and other companies that Interplay was not allowed to sell Fallout games on their site, per the original agreement. This is clearly a very dirty underhanded strategy by Bethesda to stop Interplay from exploiting Fallout and trying to take it away from Interplay. Bethesda is going to get very, very bad press about this one if this goes to court. Fallout fans are going to be ticked off to hear that Bethesda has been trying to mess with Interplay every step of the way and not allow Interplay to exploit the previous Fallout games, despite this being part of the original agreement. Interplay is seeking damages for this irreperable harm that was done to them (all you have to do is check out every magazine and website that posted that Interplay is being sued to see how Bethesda hurt Interplay's name with all this. Also, as I pointed out earlier, Bethesda representatives have been making cocky commments for quite some time about how they really feel like Fallout is theirs and that Interplay will very soon no longer have the rights to make it(almost implicitly taking credit for creating the franchise), and totally discounting Interplay's rights to make the MMORPG and back catalog games. Interplay also stated that Bethesda sent other companies statements trying to blacklist Interplay from being able to make deals with other 3rd parties.
- In regards to the Fallout MMORPG, Interplay is stating that they fulfilled all rights of the agreement and told Bethesda such in a letter that posted prior to the agreement date in April of 2009, but Bethesda suddenly told Interplay, for no good reason, that they can no longer develop Fallout MMORPG. (Thus, Interplay is implicityly acknolwedging that they raised the requisite 35 million, which is very, very good news). Interplay was not allowed to sublicense the Fallout MMORPG out, as part of the original agreement, but Interplay craftily avoided this by not assigning any rights to Masthead Studios. Masthead studios is simply a technology and finance raising venture. Masthead does not get any rights to Fallout and was not sold Fallout MMORPG (sublicensing).
- So, overall, Interplay's case seems pretty strong to me. It seems pretty clear that Bethesda was getting way too GREEDY. Bethesda tried to mess with Interplay and tried to stop Interplay from selling their old games on Gametap and other sites by sending unlawful and untrue letters that Interplay did not have the right to sell the back catalog Fallout games. Interplay had every right to sell their old games (that's the whole point of the original deal. The basic deal breaks down as such: I give you (Bethesda) Fallout to make new games for. You get a proven brand name. We (Interplay) get to keep the old Fallout games, which allows us to exploit this deal some in the future too by rereleasing the old games, and we get to make a Fallout MMORPG of which YOU MAY NOT UNREASONABLY MESS WITH US. THIS WAS WRITTEN INTO THE CONTRACT IN NUMEROUS PLACE) and there was no agreement that Interplay had to check with their daddy (Bethesda) about deals that they entered into that were not covered in the original agreement.
- (...)
- What really blew me away was that Interplay argued in their court documents that Bethesda breached the contract and messed with Interplay every step of the way (such as sending letters to everyone that Interplay tried to sell the original Fallout games to) to such an extent that the contract is now null and void and therefore the former contract is in effect which states that Interplay owns the Fallout license and Bethesda sublicenses it and only has rights to Fallout 3 and Fallout 4 and Fallout 5. Instead of Interplay oweing Bethesda royalties from Fallout MMORPG, Bethesda should pay Interplay royalties from Fallout 3, in excess of 15-20 million (estimated) as well as damages to Interplay's name, etc. What an amazing, brilliant legal stroke that would be if Interplay pulled this off and REGAINED the Fallout license (AMAZING LEGAL SWITCHAROO) and to boot got a huge, huge settlement from Bethesda to use toward remaking their old games and/or toward Fallout MMORPG".
You can read the rest of the first post here. The second post with more details about the filing can be found here. The situation is definitely getting more and more interesting.
