Trademark Licensing Dispute Over Fallout MMO

Posted by Dan on April 16, 2009

Kotaku brings word of a spat between IP owner Bethesda and licensee Interplay over the Fallout MMO Interplay is allegedly developing. I say allegedly, because whether Interplay is doing anything is the crux of Bethesda’s dispute. The history between the two firms and the Fallout brand is somewhat convoluted, but the end result is, Bethesda now owns the rights for the name and the IP, but Interplay has a license to create the MMO. Bethesda is threatening to terminate the license because Interplay has failed to secure funding or to start work.

What’s interesting here is two-fold. First, Bethesda (through their parent company Zenimax) certainly has publishing capability. Why haven’t they stepped in and said “fine, we’ll publish it, you develop it”? The question bodes ominously for the fate of the game… is Zenimax scared to touch it?

Second, it appears that Bethesda negotiated terms to the license agreement that would put Interplay, allegedly, in material breach of the license terms. Under contract law, a material breach allows the licensor/offeror in a contract to terminate the contract (as opposed to a partial/non-material breach, which merely allows monetary damages as remedy for breach, but not termination of the agreement). Now, I’m under the impression that Interplay is somewhat strapped for cash, so damages are not really the big concern for Zenimax since they’d likely not get anything great. So what’s the play here? Is it over the real value (the IP?) It will be interesting to see what Bethesda’s goal is here.

If anyone can point us towards a copy of the licensing agreement, or the SEC filings regarding the sale of the IP between Bethesda and Interplay, that’d be awesome.

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