Interplay is in trouble, it seems. The company's recent 10-K financial report has revealed that Bethesda is already claiming a breach in the two companies' license agreement for the Fallout MMO.

If you remember, Bethesda bought the Fallout license from Interplay two years ago. Interplay remained a licensee and was working on a Fallout MMO. The problem here lies in Interplay's progress, or rather, the lack thereof.

Part of the license agreement between Bethesda and Interplay stipulated that Interplay must secure funding for the game (they needed US$ 30 million back in 2007) and that the latter would start "full-scale" work by April 4, 2009. Neither of these conditions were met, hence the breach of contract.

Just to make it clear, Bethesda hasn't filed any lawsuits yet. They may even just choose to terminate the license without any legal proceedings. The 10-K filing isn't the most optimistic I've ever seen, but you can read it by clicking on the source link. Here's the part that talks about the possible lawsuit for those who don't want to slog through all the legalese.

Interplay recently received notice that Bethesda Softworks, LLC ("Bethesda") intends to terminate the trademark license agreement between Bethesda and Interplay which was entered into April 4, 2007 for the development of FALLOUT MMOG. Despite the fact that no formal action is currently pending, Bethesda claims that Interplay is in breach of the trademark license agreement for failure to commence fill scale development of same by April 4, 2009 and to secure certain funding for the MMOG. Interplay adamantly disputes these claims. Although the potential damages are currently unknown, if Bethesda ultimately prevails and cancels the trademark license agreement, Interplay would lose its license back of the "Fallout" MMOG and any damages resulting therefrom are unknown at this time.

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