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Discussion in 'NMA News and Information' started by Brother None, Nov 10, 2011.
Did I say otherwise? It was a Bakura post after all.
Thanks for the analysis Reed, I hope to read more!
They could void the APA and remove the royalty clause in the TLA due to Interplay not seeking said royalties in a "reasonable" time frame. That would result in Bethesda having the rights to make a total of three Fallout games and all expansions for said games, after which time the rights for non-MMO Fallout would revert to Interplay again. It would also likely require Interplay to return most or all of the money they received in the APA in order to cover Bethesda's restitution interest.
That all said, I think it's most likely that the court will modify the APA to allow Interplay to complete the MMO in a reasonable time frame (ie a few more years) so that both parties can get the benefits outlined in the contract. This all assuming that Interplay wins a bad faith ("meeting of the minds" involves both understanding and intent, they are arguing the latter) argument.
I'm skeptical that Bethesda would have had much of a case against the Fallout Trilogy as reused previous packaging. They almost certainly couldn't have had it removed from shelves as the claimed harm inflicted wasn't enough for that to be a reasonable reward but they could have gotten some money and forced Interplay to stop production, send packaging and titles over for approval and start back up again.
I just went over this in Business law and unless there is a strict performance clause, Interplay merely needs to demonstrate substantial performance (or rather Bethesda needs to show that there wasn't substantial performance). Even if there is a strict performance clause the court can decide that it's unreasonable for such a contract to be strict performance and overrule said clause. If it's substantial performance based and Bethesda wins then it's likely that the courts will award Interplay the ability to keep their MMO and basically remove all trademark infringing content rather than go with Bethesda's claim that they should loose all of their material.
That's my overexcited couch analysis.
Paralysis by limited Analysis
Some of You are very thankful for "analysis" by a person with either: none to at most very limited access to the hundreds of court documents that contain thousands of pages of court proceedings.
So be careful since the kindest thing I could say right now is that many are taking as Gospel legal analysis by a person with both a limited legal background and an almost complete blindness to the details and nuances of this case never mind the fact of not witnessing anything in court.
Here is the latest document for your convenience:
I could post a lot more right now( would you like to know about the night and day quality of lawyers or even hear it for yourself? and give a better clued in legal analysis but even I, who has kept up with the case more than any other person save for the parties directly involved, have not properly analyzed this last document yet.
Yes, I am an Interplay Investor and I am biased but will soon post why I think that Bethesda could actually lose the rights to Fallout and be forced to pay damages to Interplay but the attention of most wanders quickly so I will continue this later.
It is not hard to interpret what could have with a court case if you actually follow it and read 99% of court material.
I wasn't aware that the "Trilogy" was a previous issue. I did state "(apparently)" because I couldn't fathom why Interplay would risk such a violation but then Bethesda is being REALLY stupid to claim a re-issue of a previously issued package somehow justifies the nullification of the TLA....
The lack of performance by Interplay is fairly clear... but there is a 12-month good faith extention clause which Bethesda denied(?). Frankly Bethesda has the harder task of showing that Interplay is in "complete" violation of the TLA... as the TLA is vague. This leaves it to the court to decide and Bethesda hasn't been doing too well there.
@Orionquest: What exactly is your legal knowledge background?
The package design is new but there are no new art assets. Bethesda's best legal complaint with it is the title, which they claim to be deliberately confusing in order to capitalize on Fallout 3's success by misleading customers. Whether or not the courts will have an issue with the packaging will depend on how strictly they hold Interplay to the contract and whether or not Interplay was acting in good faith. The courts will most likely require Bethesda to prove that the packaging and/or the title actually caused them harm.
The APA is very clear (The APA is a scrupulously written contract unlike the TLA):
"All packaging, advertising and promotional materials used by or on behalf of Seller in connection with the Pre-existing Fallout Games shall be submitted by Seller to Purchaser for Purchaser's written approval prior to its use"
So new packaging MUST be submitted. But this is a minor violation of the APA which does rise to the level of voiding the entire contract as Bethesda tried to do.
The new packaging violates section 5.10 of the APA and the court would of had no choice but to enjoin Interplay from selling the product and force a recall... except Bethesda didn't make such a request to the court. Typical Bethesda here....
My, How quickly people forget.
May I remind some of you that this whole packaging thing with Fallout Trilogy was tossed out last year with multiple rejections of Bethesda injunction requests.
The majority of these games existed before the original sales agreement and Interplay continued to sell them after they sold the license. Just because Bethesda did not do its due diligence and verify the existences of these games before they signed the agreement means nothing to the rule of law.
Just because Bethesda's employee discovered them later by accident did not mean they had not been released years before he first saw them and cried wolf.
The Judge found nothing wrong with the wording of Trilogy since there was no confusion whatsoever with the packaging when the judge ruled over the injunction request , etc which is why Bethesda changed course unto the more absurd "Fallout" name only license.
There are countless deposition pages detailing this.
Bethesda trying to rehash this in front of the judge now is not going to change anything.
They will lose the court case, the IP and they will be forced to pay damages for bad faith contracting. I will provide a kitchen sink listing of the details of why that shall be when I have time.
Re: Paralysis by limited Analysis
I could not agree more. In fact, my knowledge of the specifics of this case is limited to that posted by No Mutants Allowed over the past few years. My posts are simply very basic overviews for those uninitiated with the American court system or basic contract law.
I don’t have a stake in this case and am not rooting for either party, so if I offended your interests, I apologize. Though I’m not sure any of my posts reflect a bias in favor of either party.
But to be frank, I also don’t believe anyone here needs a complicated legal argument from a law student to note that BOTH parties in this litigation have unreasonable expectations.
Bethesda expects to be handed sole ownership of the franchise. Interplay wants to revert back to the 2004 agreement, yet somehow forgets the restitution it will owe Bethesda in addition to the $5.75 million. That additional amount would be the undisputable increase in value to the I.P. that resulted from Fallout 3 and FONV. Or, in other words: Interplay sold something less valuable than it would get back. Bethesda can seek compensation for that. These are simply two glaring examples of the selective attention the parties are giving the circumstances of this case (in addition, Dork Mage and UncannyGarlic have noted some others).
That is an interesting outline of the arguments you have posted and I’ve read through it all. It’s also merely brief titles of the arguments without any factual elaboration to elucidate exactly why each should be believed. Once the trial begins and evidence is presented, the rationales at play here will be much clearer.
In any event, the court is going to want to effectuate the intent of the parties in the disputed agreement rather than the drastic action requested by either party to this case. Maybe Interplay or Bethesda convinces the judge otherwise, but until then, my previous posts are still relevant on the subjects they encompass.
As to your second post:
This is basic civil procedure, a denial of a preliminary Injunction Request is not a final ruling on the merits of the claim, Bethesda simply failed to convince the judge it needed a temporary injunction before the merits are heard at trial. Those are two very different things. That is also why those claims are still present in the document you posted.
Bad faith contracting is not a cause of action in contract law and was not listed in the above document. Contract law is compensatory, not punitive (See the Uniform Commercial Code). I didn’t see a tort claim in the above proposed arguments so I am not sure how you came to this conclusion.
Re: Paralysis by limited Analysis
As I see it (which isn't worth much), Bethesda's "acting in bad faith" isn't relevant until it is shown that Bethesda is in violation of the contract.
Is there any act by Bethesda that is in violation of the contracts?
Re: Paralysis by limited Analysis
Yes, I have not gone through the 52 page document yet but one simple example of the bad faith contract violation is leading on Interplay from 2007 until late 2010 into believing that they had the right to produce a Fallout MMO based on the Fallout IP( excluding anything created by Bethesda in Fallout 3, NV etc)
There are emails between the executives that detail this going back to 2008 if not earlier when the contract was being finalized.
Interplay presented this evidence of the back and forth.
When Bethesda filed an injunction in 2011 stating that Interplay only had the right to the Trademark "Fallout" and nothing else, this is an example of bad faith contracting and a grave violation of the contract to license the MMO.
Why? the contract stipulates that the game can only be approved for publishing if it adheres to the Fallout universe.
If Interplay only had the right to the title, their game can never adhere to the Fallout Universe therefore, they cannot ever publish it.
This is not what was initially agreed upon otherwise the clauses for removing Fallout IP related world features(if Interplay lost the IP) would not have been entered into the original contract and the execs from both companies would not have been corresponding back and forth about it.
Licensing the title only for an impossible to publish MMO is not a contract that can be upheld.
This is what Bethesda believes and since they do that is proof that they entered the contract in bad faith and there needs to be remedy for that.
If Interplay regains the license, they get 12% of revenue from each Bethesda release and they also will get damages, they will not get all of Bethesda's revenue but Bethesda will be limited to 3 total games.
What we have here is a clear violation by Bethesda going back to 2007-2008.
The next violation is from Bethesda's legal team in preventing Interplay from even putting out a press release stating that Interplay is working on the Fallout MMO( something that is within Interplay's right per the contract)
This happened in March of 2008
The next violation is when Bethesda contacts Interplay partners and tells them that Interplay has no license to sell games that the contract says they can sell and orders them to stop dealing with Interplay.
This is spreading false rumors about your contract partner without even first bringing this issue to your contract partner as the contract stipulates.
Bethesda is not allowed to unilaterally cancel Interplay's rights.
They do this again with the Fallout MMO April 4 2009 deadline.
Instead of giving Interplay a 30 day notice that they must meet and discuss the alleged contract violations, Bethesda unilaterally cancels Interplay's rights with only a notice of such cancellation in addition to spreading false rumors of this within the media.
There are many additional violations to discuss that were committed by Bethesda.
From my cursory partial reading of the latest document, If Bethesda is referencing the I2G 15 million $ deal in their court, then the agreement exists then I can make an initial statement saying that:
BETHESDA Softworks officially has no case at all !
Why? Well, in the last court appearance, it was clearly presented that Bethesda cannot subpoena Masthead because it falls outside US Law jurisdiction.
They can only go by the agreement signed between Interplay and Masthead detailing the start of their relationship and work on the MMO from February 2009.
It does not matter what Bethesda believes is or is not real even if they are right.
It only matters what they can prove in a court of law with evidence, something their lawyer has a problem with based on the mocking of him done by the judge.
Since these 2 funding documents exist, Bethesda cannot prove that funding is not available regardless of what is listed under Interplay's SEC filings.
The funding is external and to be provided on a as needed basis based on work done( even this is not disputed by Beth's COO in his deposition)
As I said, it is very likely that Bethesda has no case at all unless you consider arguing a point that makes you lose your rights a case.
Bethesda's lawyers are very close to losing the case and the rights to the 80% revenue cash cow of Zenimax.
If they issued bonds to raise funds to buy Id and also fund their new games and advertise them, then Zenimax CEO Robert Altman is risking losing his company to bondholders if he dares take this case all the way.
I don't joke unless I am using sarcasm to prove a point.
I previously said that Bethesda would argue points that would make them liable to setting themselves up to losing this case and so far I have been proven correct while a couple years back I was thought of as insane.
Well, my current seemingly outlandish statement that Bethesda not only is headed to losing the case but to being taken over by Bondholders may seem more outlandish but I have read almost every single page of court documents and paid attention to way that the Lawyers for both sides behave in court and can finally say this:
Interplay has a great Lawyer when compared to Bethesda's list of rotating lawyers.
He is apt at presenting evidence and holding all those deposed accountable.
Bethesda's lawyer fails at the simple basic ability of presenting evidence.
He thinks he does not have to. Well, let him. that arrogant and hollow attitude is why he is going to get fired pretty soon and force Bethesda to settle the lawsuit before they lose it.
I have only begun dissecting this case but I will refrain now from further writing in this post since I surely have lost the attention of 95% of NMA readers.
All right, lets try this againon`t you think people are getting sick and tired of the same song and dance year after year? FPS after FPS? Plus:do you know how many still play classic games to this day? A lot more than you think. From Pacman to Mario Bros to freaking Sonic the Hegehog. There is still a market for classic gaming like Fallout. Now,I admit there will be haters,(those morons who think Bethesda is the second comming of the Jesus himself.) but overall I do not see what you mean. Fallout in classic form would be different, and that is the key word:different. Market that correctly and people will flock to it like it was a totally new game.
Re: Paralysis by limited Analysis
No breach of contract has occurred even if a contract partner is acting in bad faith as long as they are holding to the letter-of-the-law contract requirements (gray areas, between the lines doesn't count - that's what litigation is for).
This is an asinine argument by Bethesda (and it's fairly clear the judge thinks this also) but filing for an injunction does violate the contract.
This is a simple contract dispute. If Interplay wants to issue a press release then they can file with the court for permission. Bethesda isn't helping Interplay but this isn't a breach of contract.
This is problematic for Bethesda. This kind of action can be viewed as an obstruction breach of contract.
Bethesda can't cancel a contract. Claiming that the contract is cancelled isn't a breach of contract. It's merely a contract dispute for the courts.
As has been noted in previous forum threads (by many individuals), the TLA is so loosely written that Bethesda doesn't have much to work with.
Interplay just has to show that funding for FOOL development on 4 April 2009 was "secured" from a source valued more than $30 million. It doesn't have to be money in a bank and frankly it can be gone on 5 April 2009 because the contract only states on 4 April 2009 and nothing about later dates. The "MINIMUM FINANCING" clause is almost a complete joke... but on the date 4 April 2009, Interplay has to be able to show a "secured" funding source worth US $30 million existed. That's all that is necessary to fulfill Interplay's contractual financing requirement.
This has been repeatly noted here at NMA. It makes a difference in court but doesn't change the contract any.
Interplay has to have a deployed MMOG to meet the contract requirements else Interplay is in breach of contract.
If Interplay can show failure to deploy is due to tangle actions by Bethesda, then Bethesda has a problem with FOOL but I doubt that the APA is in jeopardy it's really just an issue with the TLA.
As I see it, the best case senario for Interplay is Bethesda is found in breach of the TLA due to bad-faith obstruction. Interplay gets the clock reset (2-years development plus 1-year good-faith effort). Bethesda must play penalties equal to Interplays last 3-years of operating cost (in essence so that Interplay can complete the 3-year development period for FOOL). At the end of 3-years Interplay either meets contract requirements (deployed game with more than 10,000 paying customers) or loses all rights.
Of course Bethesda with appeal (and lose) and then have to pay treble damages....
Re: Paralysis by limited Analysis
As I said earlier, it depends on whether or not there is a strict performance clause and Bethesda would have to prove that harm was inflicted by Interplay's failure to abide by said clause.
Good call. I thought that bad faith could be a cause of action in contract law in regards to "the meeting of the minds", hence the latest filing. I guess bad faith wouldn't be the technical term, rather it would be a difference in intentions at the signing of the contracts.
If the APA is voided due to a failure of a meeting of the minds then it would revert to the TLA, under which Bethesda was given the rights to produce 3 Fallout games. I agree that the franchise's value has indisputably risen but that would have happened under the TLA too, no? Bethesda could argue about the resources invested in the project but I'm not sure that they could get the full value of the increase in value of the IP.
While you're right in a strict performance analysis, odds are it will be based on substantial performance. That means that it's about the intent of the law, which is that Interplay must have sufficient funding to develop, produce and launch the game, estimated at around $30 million. Whether or not the actual amount of funding that Interplay had was sufficient will likely be determined by expert testimony and whatever physical evidence (estimated cost of project based on current investment and similar projects) either side can produce.
You know what bothers me in this type of topic? People bash the original Fallout game's because of the ISO view, saying they belong to games of the past, but a lot of games today's have isometric view, is not just simply a "classic games like Fallout" argument.
The entire Civilization series, C&C RA & Tiberium series, all Diablo games have isometric view, just to name a few.
Then it came the FPS style, wich is a horseshit argument (if you people excuse my language). The problem is not really the real time combat provided by FPS, C&C has ISO view and real time combat as well Fallout Tatics.
Since when the hell First Person View is the cup of the cake?
The real question is: when we will see more games with the degree of freedom that Fallout or GTA provide?
Everyone refers to freedom to the ability of going anywhere you want in the map, but freedom is much more than this.
In F2 you can play a female Chosen One that makes tons of cash or solve quests with sex; or a real psycopath that kills and slave anyone; or a good samaritan that helps people; or the apathetic character that cares only for himself; or a biggot prejudice that thinks he is better than anyone else.
And I cannot forgive Interplay for ditching F3 in favor of PoS!
My last comment on this...
I've realized we have been buying the argument by Bethesda and Interplay that the APA and TLA are co-mingled contracts when in fact they are two seperate, stand-alone, contracts.
Consider my contracting a painter to paint an apartment build and a house a particular color:
Contract One ("The Building") - Paint "The Building" "The Color"
Contract Two ("The House") - Paint "The House" "The Color"
Okay, the apartment building is properly painted but the house is painted the wrong color. The Painter insists the house is painted properly. I sue in court over "The House" and ask for remedy that "The Building" contract be voided.
Nice try but no court would agree to such a co-mingling of the contracts. Same contract partners dealing with same content (painting something) signed on the same day by the same persons, but they are two independent stand-alone contracts.
Very similar to what Interplay wishes to do:
Contract One ("The Building")
APA: Bethesda agrees the pay $5.75 million for all present and future Fallout assets
[exclude present and past products sold by Interplay]
Contract Two ("The House")
TLA: Interplay agrees to pay 12% royalty for the lease of Bethesda's Fallout MMOG asset
[ignore performance clauses, the above is what the TLA means in its rawest form]
Interplay claims Bethesda has violated the TLA and wants the APA voided as remedy.
Not going to happen.
I think that freedom is overvalued and a dynamic world that reacts to the player's choices undervalued. Sure, you can go anywhere and screw around in GTA but there are a fairly small number of quest paths that you can take. I haven't played any GTA game newer than GTA3 but the best part of that game was the screwing around and I could only ever do that for an hour or so before getting bored. The quests were uninspired and repetitive so you ended up doing different variants of the same handful of quests over and over. Ultimately the goal was to unlock all three cities, nothing you did did anything else of importance.
Freedom isn't much good if there isn't anything interesting that you can do with it.