Bethesda has lost another round in its legal battle with Interplay over the company's Fallout-themed massively multiplayer online game. The Fallout 3 developer was denied a preliminary injunction against Interplay by the courts in September. It appealed the ruling, but yesterday that appeal against the lower court's decision was also rejected.
According to documents from the United States Court of Appeals, Bethesda hoped to prove that the "district court abused its discretion and misapplied the law in concluding that Bethesda failed to establish a likelihood of irreparable harm." One of Bethesda's key points was that Interplay's financial stability would hinder it from being able to pay any applicable damages should it prove successful in halting the MMO's production.
The dispute stems from a $5.75 million deal for the Fallout license in April 2007. When Bethesda bought the IP, it agreed to give Interplay the rights for an online Fallout game on the condition that "full scale development" should start with at least $30 million in funding within two years.
In April 2009, financial documents from Interplay revealed that Bethesda intended to take legal action to prove that these obligations had not been fulfilled.
The purpose of the injunction was to halt production on Interplay's MMO until the matter could be resolved in court. The district court sided with Interplay, saying that Bethesda failed to prove Interplay's game was damaging to its business.