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Posted by Brother None

For the uninitiated in law a preliminary injunction is when one party (Bethesda) asks the courts to restrain another party (Interplay) of going forward with their activities (publishing Fallout, working on FOOL) until such time as the case has been decided. Bethesda was denied its request for a preliminary injunction according to Interplay investor frymuchan, and this would seem to be the case as Interplay has started publishing V13 concept art. NMA has a copy of Interplay's proposed order denying the preliminary injunction (though not the ruling) and - of more interest - Interplay's opposition to said motion, including its arguments.

Interplay had to argue on four points (the traditional four for preliminary injunctions). The one of the most interest to us is that "Bethesda cannot show a clear likelihood of success on the merits of its claims". The case is about the Asset Purchase Agreement (APA) - by which Interplay sold Fallout but retained the right to publish the older titles - and the Trademark License Agreement (TLA) - by which Interplay licensed back the limited rights to produce FOOL.

While it does not contain convincing instances of what frymuchan would no doubt call "sleazy interference" from Bethesda, it does cite a few instances of how Interplay and Bethesda would interact on the use of the Fallout license. The biggest example is Interplay's website: Interplay had initially submitted for approval a website that prominently featured Fallout Online, but no permission for this was given by Bethesda. They then switched from FOOL to Project V13 and resubmitted for approval, Bethesda noting that the art "relates to a possible MMOG based on Fallout". Interplay removed said art, but never got a response from Bethesda on further approval requests.

When it comes to Fallout Online itself, Interplay notes it has "more than 600 pages of extensive game design documents detaling, without limitation: characters, character abilities, equipment and in game items, weapons, concept art, story outlines, and environment descriptions, among other game information." Interplay claims to have entered full production with Masthead prior to the deadline set by the TLA and to have created a demo that "included a playable portion of the 3-D game environment, which was based upon the game design documents and showcased the art style selected by the team." Interplay sent notice on April 2 to Bethesda that they had satisfied the TLA conditions. Bethesda unilaterally revoked Interplay's rights under the TLA on April 7, claiming Interplay was not allowed to use independent contractors and rejecting Interplay's financial arrangements. Bethesda also claimed Interplay was not allowed to use digital distribution channels under the APA.

Interplay argues:

  1. Interplay's distribution methods do not breach the APA, as the APA does not limit bundling of the games or sublicensing to publishers and digital distribution channels.
  2. Interplay did not violate the Merchandising Rights approval provision, as said provision was only to give Bethesda the rights to see if Interplay's packaging did not "use, refer to, trade upon, reflect the look and feel of or otherwise exploit any of the Fallout games or products...developed by or for Bethesda or its licensees."
    And here's an interesting point I've tried to make clear before: Interplay's packaging predates Bethesa's approval right. Interplay was using the packaging "Fallout Trilogy" and "Saga Fallout" for Fallout 1, 2 and Tactics bundles before the APA was signed, and thus said packaging is not bound to Bethesda's approval. Furthermore the package clearly shows it does not contain Fallout Interplay further claims that while it acted in good faith, Bethesda's refusal to let Interplay announce and promote its MMOG using the Fallout mark has a direct negative impact on the functioning of the company and is done in bad faith by Bethesda.
  3. The APA is an "entire contract". This is a bit of legalise that basically states that given certain terms a contract can only be wholly undone, not partially. The opening language of the APA almost exactly follows that of an earlier contract that was declare to be entire by the courts, giving Interplay a strong case to argue the same is true here. If such is the case, then the rights of Interplay to distribute the pre-existing Fallout games can not be undone without the entire APA being undone and Bethesda and Interplay reverting to the earlier Exclusive Licensing Agreement.
  4. Interplay can not be in violation of trademark as the APA is not yet invalidated.
  5. Interplay satisfied the terms of the TLA. Now this is a somewhat hilarious read, as Interplay takes the imprecise language of the TLA and just stretches it every which way.
    Interplay argues that "full production" is an undefined term taken to just mean the "production stage" of development, which Interplay has entered with Masthead technology.
    Then Interplay argues the 30 million USD in the TLA is not defined as having to be held in Interplay's account, or that "the entirity of the funding must be received in a single installment or a single line of credit", and that "no provision of the TLA requires Interplay to spend US$30,000,000, or any other amount, to create the game. Thus, the funding requirement serves no material purpose." Hence Interplay claims the funding requirement served only a quality control function, and Interplay's arrangement with Masthead satisfied the financial conditions.
    You don't need to be a legal wizz to see that this is a nebulous, nonsensical argument that stands and falls only on inexact language of the contract.
The remaining arguments, dealing with balance of harm and public interest, are of no extensive interest to us as readers. The countersuit by Interplay is not discussed in this document as it is not a part of the preliminary injunction hearing. There are no doubt rows of court documents NMA has not laid eyes on, but going from this, Interplay's arguments regarding the APA and their right to publish pre-existing Fallout games in perpetuity is strong, but I can't really take their arguments regarding the TLA and the funding for FOOL seriously. Regardless, they won the claim based on the above arguments.

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