Interplay’s Eric Caen on the Fallout IP Battle

Interplay’s Eric Caen on the Fallout IP Battle

You would think that no one would have much use for a rubble-strewn chunk of irradiated land, but right now, a heated IP battle between Interplay and Bethesda Softworks is taking place over one such stretch of seemingly unattractive real estate.

The Fallout post-apocalyptic sci-fi role-playing series (most recently revisited in Fallout: New Vegas) has been around since 1997, and has garnered a rich culture and storyline in that time, even if the source material (dog-sized rats, giant roaches, etc.) is not among what humanity considers notable “culture.” The games present an alternate future for America, one where ’50s-era Cold War suspicion boiled over and climaxed with a nuclear war. Some of the terms and figures born out of the charred wasteland have since made an indelible mark in gamers’ hearts, including the series’ mascot, the always-smiling Pip Boy.

Interplay initially owned the rights to the Fallout series, and it published Fallout, Fallout 2 and Fallout Tactics before Bethesda Softworks acquired the franchise in 2004. Under Bethesda’s care, the Fallout series expanded with Fallout 3 in 2008, Fallout: New Vegas in 2010, and various expansion packs.

The Fallout property is a popular one, and well-suited for a massive-multiplayer online RPG (MMORPG). In fact, one is currently under development by Interplay and is aiming for a 2012 release, but the Fallout MMO project has been mired in scattered patches of copyright hell.

This is where things get tricky. Pete Hines, Bethesda Softworks’ Vice President of PR and marketing, says Bethesda owns the rights to “everything Fallout,” including the rights to the MMORPG. Eric Caen, the co-founder of Interplay Entertainment, says that Bethesda agreed to let Interplay publish the MMORPG when Bethesda picked up the Fallout property.

However, acquiring the rights to Fallout Online wasn’t as simple as Bethesda thrusting all creative control in Interplay’s direction. Bethesda laid down some rules: Interplay had to start working on the game within 24 months of the agreement, it had to secure $30 million in funding, and the project had to be released within four years. Bethesda says that Interplay hasn’t lived up to its side of the agreement.

But the legal battle doesn’t end over the rights to the Fallout MMORPG. Caen says Interplay is looking to regain the entire Fallout IP. This is a particularly sticky part of the legal battle, as Bethesda claims the original contract only allowed Interplay to use the Fallout name for its MMORPG–but no other assets from the franchise.

What’s the point of playing a Fallout MMORPG that is not allowed to refer to the Vaults, the Ghouls, the Brotherhood of Steel, or the two-headed Brahman cows? Interplay feels the same way, and that’s part of the reason why it’s fighting to regain the property.

“Interplay has a license to make Fallout Online,” says Caen. “Bethesda is trying to stop us, so we feel that they lied when they bought the IP from us, and never had the intention to let us do the Fallout MMOG. For that reason we are asking the courts to cancel the IP sale.”

Caen adds that if Interplay is blocked from releasing Fallout Online, it could terminate Bethesda’s rights to the IP by the time a sixth Fallout game rolled around. “We sold the Fallout IP to Bethesda in exchange for a certain amount of cash and the right to do the Fallout MMO,” Caen said in an interview with Eurogamer. “If they refuse to let us do the game, then the sale of the IP is terminated, and they will be allowed to do only one more Fallout, 5.

“The original licensing deal was for three games and their DLC. So they already did Fallout 3, then Fallout: New Vegas, and they can only do one more, Fallout, 5, if the sale of the IP is canceled by the court.”

Caen believes that Bethesda has done a good job widening gamers’ recognition of the Fallout brand, which is why he doesn’t understand Bethesda’s willingness to risk losing the popular property. “Maybe [Bethesda] will realize they risk losing over two thirds of their business,” he says, “when they could just let us complete our MMOG development and enjoy their 12% royalties on it. A Fallout MMOG is one of the few universes that could have over a million subscribers. This is serious business.”

Interplay has a rough battle ahead of it: the company’s financial history can be described as “rocky,” though the sale of the Fallout property has helped it climb back into relevance and deal with many of its debts. That said, drawn-out court battles can drain the health of any company as efficiently as a vampire. How will Interplay sustain itself through its battles with Bethesda?

“We have solid shareholders that want us to win this fight,” Caen says. “We are [not too] worried because we know Bethesda’s case is based on lies. We don’t know [how everything will turn out], but we have faith in justice, and we know we are right. But we can’t be sure of the outcome of this battle.”

As for the actual validity of both sides’ arguments, and the rest of us, we can only hope this court battle will be worth it in the end. We just want to travel the Wasteland with our friends and listen to our boots crunch on rocks and bones as we rush forward to take on the Mirelurk that has stepped out of the radioactive fog.

Note: Bethesda Softworks representatives declined to comment on the IP battle with Interplay, as the case is still pending.

About Nadia Oxford
Nadia is a freelance writer living in Toronto. She played her first game at four, decided games were awesome, and has maintained her position since. She writes for 1UP.com, Slide to Play, GamePro and other publications, and is About.com’s Guide to the Nintendo DS.

2 Comments

  1. Gah. It sounds like both sides now are battling to see who can make the most ridiculous statement. I thought Bethesda had won the day with the ludicrous suggestion that they licensed only the name “Fallout” back to Interplay for the MMO, but I think Caen may have topped it.

    First, Interplay has several deadlines placed on it related to the MMO. Missing them cancels their rights but does not terminate the sale.

    Bethsesda has QC rights, meaning Interplay can’t just pump out any executable they like. Taking two parts of the agreements separately, if Interplay can’t pass Bethesda’s QC within the deadlines, the licensing agreement is terminated without cancelling the sale. There’s nothing in the clauses regarding the deadlines or the QC that specifies that Interplay is owed any compensation should their license be terminated for any of those reasons, and the specific value of those rights is not specified in the agreements: only the total value of the sale, and that the MMO rights licensing agreement was part of the deliverables for the sale price. Call it the “MMO Discount”.

    Even if Caen’s suggestion here were on the mark: that the termination of the MMO rights means the termination of the entire agreement, that means Bethesda gets its money back. However, the value of the Fallout franchise after the release of Fallout 3 and Fallout 3: New Vegas has to be more than what Bethesda paid. Interplay was a distressed seller, and Bethesda is not. How much more Fallout is worth now is probably an academic argument, since I don’t think Bethesda wants to sell, but I don’t think there can be any basis for the suggestion now that the two parties can just cancel the deal, giving back Interplay the franchise at a distressed price while reaping the benefit of the value-add provided by Bethesda’s two releases.

  2. Gametheoryonline.com – keep news like this coming. You guys don’t post TONS of articles compared ot other video game news site, but every article you put out is original, and I repost it directly to twitter.

    You guys have great content. Especially this Fallout material, KEEP POSTING NEWS RELATED TO THIS. Especially the Fallout MMO, because there’s been infrequent, albeit lots of spotted news of/about it like here and there every 2-3 months, it’s still great to hear ANYTHING about it when it’s released.

    I just wanted to take the time to say thank you. So keep it up!! Thanks xD

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