Interplay vs. Bethesda, Continued

The legal drama over the Fallout IP continues, as Duck and Cover reports that Interplay CEO Herve Caen has issued a seventeen-page statement that highlights some of the behind-the-scenes actions Bethesda has taken to kill Project V13 (Fallout Online).

Interplay has never used the Fallout mark in connection with the development of its MMOG since the Parties executed the APA and TLA, and has never used the Fallout mark in commerce related to its MMOG, which remains in development and has not been commercially released.

In fact, on April 3, 2008, Interplay sought approval to use the Fallout mark on its website to announce the MMOG project that it was working on in connection with the TLA…In a nutshull, Bethesda refused to permit Interplay to announce its Fallout MMOG even though it was entitled to make the announcement pursuant to the TLA. Interplay should have been, and should be, allowed to use the Fallout mark while it develops its MMOG, and the refusal of Bethesda to permit this is in bad faith.

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It is interesting that in or about August 2007, just four months after Interplay had entered into the TLA with Bethesda, Bethesda’s parent compabny, ZeniMax Media LLC, announced the creation of its own MMOG development house, ZeniMax Online Studios. Based on Bethesda’s subsequent conduct it thus appears that Bethesda never intended to permit Interplay to develop an MMOG under the terms of the TLA and planned from the outset to terminate Interplay’s rights and grant them instead to affiliated ZeniMax Online Studios for a Fallout MMOG.

Bethesda’s attempt to terminate the MMOG rights undert the TLA is consistent with its overall conduct designed to interfere with Interplay’s exploitation of rights granted undert the parties’ agreements, including Interplay’s Merchandising Rights to the Interplay-developed Pre-existing Fallout Games.

And with $200,000 in legal fees spent during this whole ordeal, Interplay wants to be reimbursed:

The parties have been embroiled in ongoing disputes because Bethesda has been attempting to stop Interplay from, among other things, continuing to expoit its rights under the APA, specifically its MMOG rights and its distribution of Pre-Existing Games, i.e. Fallout 1, Fallout 2, Brotherhood of Steel and Tactics.

In addition, Bethesda has: (1) attempted to restrict Interplay’s design and implementation of the MMOG; (2) attempted to prevent Interplay from distributing Pre-Existing Fallout games, portions of which are permitted under the APA; and (3) attempted to preclude Interplay from issuing press releases or anything related to the Fallout game, not withstanding the fact that Interplay has reserved certain rights to the Fallout Intellectual Property under the terms of the APA.

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Even after discovery rendered it clear that Bethesda had no evidence to support its Motion, Bethesda continued to press for an injunction. Bethesda knew it could not prevail on the Motion because it could not establish any of the elements required for the granting of a preliminary injunction. In fact, in making the Motion Bethesda employed the incorrect legal standard for a preliminary injuntion in the Fourt Circuit; (Motion, p. 11). Further, Bethesda was unable to demonstrate any actual confusion or likelihood of confusion with respect to Interplay’s permissible use of the Fallout trademark or any irreparable hard., Bethesda nevertheless persisted with the knowledge that protracted litigation would be costly to Interplay and take its focus off development of MMOG. Interplay was thereby required to expend substantial amounts of time ande legal expense in order to defend against Bethesda’s unsuccessful Motion, which is exactly what Bethesda intended.

On December 10, 2009, after considering the pleadings, the evidence submitted after the hearing and oral arguments of counsel, this Court denied Bethesda’s Motion in its entirety. At the hearing, the Court found that Bethesda could not establish even one of the elements required for the granting of a preliminary injunction.