Bethesda Softworks LLC v . Interplay Entertainment Corporation < section begin = " CXPortalFeaturedArticle " / > Bethesda Softworks LLC v . Interplay Entertainment Corporation was a legal dispute between Bethesda Softworks , the current owner of the " Fallout " franchise , and Interplay , the publisher of the original " Fallout " games , and in settlement confirmed that Bethesda was the sole owner of the Fallout franchise , and ended the hopes of Interplay to create any future Fallout titles , including " Project V13 " ( " Fallout Online " ) . < section end = " CXPortalFeaturedArticle " / > Howard Stahl and Joe LoBue ( of Fried , Frank , Harris , Shriver & Jacobson ) led the case for Bethesda ; against Jeffrey Gersh and James Sedivy ( of Gersh Derby ) for Interplay , with Geoffrey Hervey supporting as local ( Maryland ) counsel for Interplay . Justice Deborah K . Chasanow of the US District court in Maryland was the judge of record for the case . Witnesses providing evidence included Hervé Caen , CEO of Interplay Entertainment , Frederic Chesnais of Interactive Game Group ( a financier of video game development ) , and Thomas Bidaux , a consultant to the MMOG industry . Leading to the case . In 2004 , faced with growing debts and declining revenues , Interplay offered a number of their Intellectual property rights ( including Fallout ) to other developers and publishers for sale or license . Amongst the bidders for the Fallout license was Bethesda Softworks , who secured a license to create 3 Fallout titles , in an Exclusive License Agreement ( often referred to as the ELA ) . This deal was completed in June 2004 . Following this , Bethesda began some limited development on Fallout 3 , while continuing to focus on the development of The Elder Scrolls IV : Oblivion . The Fallout deal was not enough to secure Interplays ' future , and on 29 November 2006 Interplay were issued an involuntary bankruptcy order . This was not the end for Interplay however , the next day they announced plans for Fallout Online , a game they hoped to fund with an investment from European backers . Continuing to seek more funding , Interplay sold the entire Fallout franchise to Bethesda through an Asset Purchase Agreement ( commonly referred to as the APA ) and copyright assignment , replacing the previous 3 game license . Concurrent with this agreement was a second agreement signed at the same time , called a Trademark License Agreement ( or TLA ) on April 4 which licensed back to Interplay the right to make Fallout online , the terms of the TLA included : In February 2009 , President of Masthead Studios contacted Hervé Caen via the Interplay Website offering his company ' s services to help develop the game . The Next month Mr Caen visited Masthead in their home country of Bulgaria and took a 90 second video of Fallout Online in some sort of playable state . Following this on April 2 , 2009 , Interplay announced a partnership with Masthead Studios , Developer of Earthrise to work on " Project V13 " , the Fallout online project . Two days later the expiration of the deadline to begin full scale development passed . By April 15 , Bethesda made moves to prevent further development by Interplay on this title . In September 2009 , Bethesda filed suit against Interplay to prevent further development . The lawsuit . Summary . The case raised the following questions to be determined through the suit Pre Trial Injunctions . After filing its initial suit in 2009 , Bethesda filed injunction motions ( first Sept 2009 , denied Dec 2009 ; second June 2011 , denied August 2011 , Appealed ) trying to get Interplay to stop work on Fallout Online . These were denied , on the ground that Bethesda failed to show enough evidence to the court that show that it was being harmed by Interplay ' s actions - the interplay game was not on release , and would have minimal impact on the value of the IP until a release became imminent . Interplay in turn responded in October 2009 , with a counter suit claiming that the TLA was invalid , and through this invalidity the APA was invalid too . Through this reasoning , if both the TLA and APA were invalid , then Interplay were still the rightful owners of the Fallout franchise , with the prior 3 game deal being in effect . Masthead issues . Exclusion of Evidence . An important point debated in pre trial motions was the admissibility of evidence from Masthead studios . Court documents and rumours surrounding the case suggest that Masthead had agreed to fund at least part of Fallout Online , and had done significant work on the project - to the point where the game was at least in some state playable - albeit using some elements of Masthead ' s other title to work . In American trials , prior to the actual main part of the trial in the courtroom , both sides of the dispute go through a process called " discovery " . In the discovery phase , each side is required to essentially show the other side the evidence it may use in the trial itself , including physical evidence and names of witnesses to be called . Additionally in this phase , witnesses may have to go through a " deposition " , where the other sides lawyers can ask them questions while the witness is under oath . This allows both sides to prepare for each other ' s evidence , and have ready further evidence to call into question the validity or value of evidence called . On September 23 , 2011 the court , in a response to a Bethesda pretrial motion , precluded Interplay from calling any Masthead employees to the stand , as Interplay had not named any Masthead employees as witnesses . This had the effect of barring Interplay from introducing any evidence from Masthead , the judge noting " . . . it would be total hearsay for them to tell a jury about what they think Masthead was doing in Bulgaria , if it is based simply on what one of them might have told them from Bulgaria " . Evidence that is considered " Hearsay " is not typically admitted in courts . This had two major implications in the case . Interplay had decided that full scale development had begun following Hervé Caen ' s visit to Bulgaria in March 2009 , where he accepted the work that Masthead had completed to date ; additionally although Masthead were working for a royalty ( of between 25 and 45 % depending on sales ) , Interplay had valued their contribution at $ US 20 million , counting this towards the amount of money they were required to secure to maintain their license . Interplay could not sub - license to Masthead . Bethesda also argued in their pre trial memorandum that Interplay ' s engagement of Masthead to work on Fallout Online constituted a breach of the Trademark License Agreement , as the document prevented Interplay from sub - licensing the work on Fallout online without written approval - something which Bethesda says was neither sought nor granted . A separate suit was filed against Masthead and later dismissed by agreement of both parties as part of the conclusion of this case . TLAs and Copyrights . In December 2010 , Bethesda muddied the waters with a new claim . Even if Interplay did have a valid license to make Fallout Online , the Trademark License Agreement only included the Fallout Trademark itself . Other elements , such as Supermutants , Power Armor , the Brotherhood , and the characters in game are not covered by trademarks ; rather these elements are covered by copyright . This claim became a key plank in the arguments for both sides . Bethesda - Trademark v Copyright . As Bethesda and Interplay did not have a Copyright license agreement , Interplay was restricted to a Fallout MMO without signature Fallout elements - in short , Fallout in name only . Interplay - the vague TLA also makes the APA invalid . The main strut of Interplay ' s case is based on the validity of the Trademark License Agreement . If the TLA is invalid , or so Interplay ' s argument goes , as this was " consideration " ( basically part of the trade ) on the Asset Purchase Agreement deal , then the APA is also invalid , putting the Fallout franchise back into Interplay ' s hands , with Bethesda allowed to release no more than 3 Fallout games , under the terms of the previous 2004 Exclusive License Agreement . That both Interplay and Bethesda had such different interpretations on what the TLA allowed Interplay to do suggested that there may not have been a " meeting of the minds " ( basically a common understanding of what was being agreed ) between the two parties . It was Interplay ' s position that under Delaware law a court can strike out a contract where this is not present . For its part , Bethesda argued that this line had no merit : Development and Funding guidelines . Whether or not Interplay had secured enough funding , and had started " full scale " development of Fallout Online were potentially key questions in the case had the full trial gone ahead . Under the terms of the Trademark License Agreement , Interplay was required to secure $ US30 in funding and start full scale development within 2 years of the TLA being signed ( 4 April 2007 ) . In pre - trial motions , who had the " burden of proof " to show the conditions in the TLA had or had not been met , what evidence would be available to prove this , and whether Interplay would be permitted to make any arguments at all were the subject of various motions . The court ruled on who had the burden to prove on December 5 , 2011 As Interplay were relying upon Mastheads contribution to show full scale development beginning in March 2009 , this left them in a difficult position . Interplay says funding is secured . Bethesda ' s pre - trial memorandum summarizes Interplay ' s claim to secure funding : However , the value of $ US20 million for development services was based upon Interplay ' s valuation of Mastheads contribution continuing through to completion . Masthead had not offered any funding for them and did the did not offer a valuation for this contribution ( Masthead were to instead receive a royalty from sales for their work ) . Bethesda ' s counter - argument on funding . Bethesda ' s pre trial memorandum refuted Interplays claim that Interplay secured $ US15 million in funding from Interactive Game Group ( I2G ) . Bethesda ' s deposed ( interviewed ) the founder and sole employee of I2G Frederic Chesnais and in their counter argument included the following facts discovered during this deposition : As for the agreement from Masthead , it was Bethesda position that any documentary evidence from Masthead , including an agreement to provide funding would be inadmissible in court under the rules against hearsay evidence . Full Scale Development . Like the requirement for Interplay to secure funding , Interplay was required to begin " Full Scale Development " no later than 2 years after the TLA was signed . In their Pre Trial memorandum ( page 22 ) Bethesda noted : Earlier in the case , Interplay had stated in 2008 that Development costs would be at least $ US26 . 8 million and 53 Employees . However , their 10 - K release at the end of 2009 confirmed Interplay had a total of 5 employees , and $ 279 , 000 in development costs . Bethesda noted in the same pre trial memorandum that Interplay had offered no code during discovery to prove development , and that a statement in March 2009 by Interplay CEO Hearve Caen confirmed the game was not in full scale development at that time . Further to this , Interplay ' s development costs decreased in the following quarter , Bethesda claimed that these both prove that full scale development did not begin by the April 4 , 2009 . In court however Hervé Caen asserted that Fallout Online was in Full Scale development as of March 2009 following his observation and acceptance of early work by Masthead on the game . Masthead ' s related evidence would be ruled as hearsay subsequent to this testimony for the purposes of the trial , and thus be inadmissible . Other Elements . Fallout 1 / 2 / Tactics Sales . A second issue drawn into the greater case was Interplay ' s limited right to continue to sell Fallout , Fallout 2 , and . Under the original terms of the APA Interplay could continue to sell these games through to the end of 2013 , after which all rights would revert to Bethesda . Controversy erupted when Interplay began packaging these games together as the " Fallout Trilogy " . Bethesda argued that this was both deceptive marketing ( as trilogy would typically imply 1 , 2 and 3 ; rather than Fallout 3 being included purchasers would receive Tactics ) and was a breach of the parts of the APA which gave Bethesda control over how the games were to be marketed . In response , Interplay stated that the Trilogy marketing was not new , and that Bethesda had been interfering with deals Interplay was negotiating with digital distribution channels by threatening these retailers not to stock the earlier Fallout titles . This Element of the case was mostly dropped pre trial . Fallout D20 . In June 2006 , prior to the sale of the Fallout franchise to Bethesda , Interplay had authorized Glutton Creeper Games to create a fallout tabletop role playing game to be marketed as Fallout Pen and Paper d20 . Following its purchase of the Fallout franchise , Bethesda terminated this agreement . Although the game was eventually released with Fallout elements removed , Interplay asserted in the case that Bethesda ' s attempt to do so was illegal . In response , Bethesda claimed that under the original 3 game deal it was the exclusive licensor of the Fallout title , and as such Interplay had no rights to enter the agreement in the first place . The title was eventually released as Thomas Bidaux . Another pre trial point of contention was the possible testimony of Thomas Bidaux . Bethesda sought to include him as an expert witness on MMO development , and said he would testify as to what sort of resources would be required to develop a MMO . Interplay objected to his availability as a witness as they had limited opportunity to depose ( a sort of pre - trial interview under oath ) him before the trial . They argued that Bethesda had been uncooperative in trying to arrange for his deposition . Bethesda for their part said they had made him available between the 26 – 28 October 2011 , but he did otherwise have a very busy schedule . Interplay argued that Bethesda ' s insistence that this must be performed in person , and not via he be excluded as a witness as with no information on Interplay ' s actions he had no information of value to offer the court . The court ruled in Bethesda ' s favor , permitting his evidence , but limiting him to speaking in general about MMO development . He would not have been permitted to speak in specifics as to Project V13 , the APA , TLA or any work Interplay had done on the project ( which Bethesda contended they had no intention of doing ) . Trial and Settlement . Summary of terms of Settlement . The Project V13 title was since reused for a completely different game . Court documents . Some of the court documents were marked as Confidential at the start of the case ; this was in order to prevent the rival companies acting on information they should not have until the trial had concluded . Following the settlement all court documents are considered public domain ; originals are available through the PACER system .