Interplay has revealed the surprising news that it may be facing legal action from Bethesda over the rights to develop a Fallout MMOG.

After selling the Fallout IP to Bethesda in April 2007, Interplay licensed back the rights to develop a Fallout-based MMOG. But the deal came with conditions: “Full scale development” had to begin within two years and the game would have to be launched within four years of that date. If not, Interplay would forfeit its rights to the title.

Those two years have gone by and now, according to an April 15 Securities and Exchange Commission filing by Interplay, Bethesda wants the license back. Interplay appears to be making progress on the game – or at least on Project V13, which everyone assumes is the Fallout MMOG – but Bethesda is claiming that full-scale development is not underway and that “certain funding” for the game has not been secured, thereby violating the terms of the agreement. Interplay, naturally, disagrees.

“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 a Fallout MMOG,” the filing reads. “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 full 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.”

Interplay managed to recruit original Fallout designer Chris Taylor to the project back in September 2008 and more recently signed a deal with MMOG developer Masthead Studios to collaborate on the game. On a more negative note, Taylor’s Fallout co-designer Jason Anderson recently left Interplay to take a position at inXile, saying, “The future of the – well, I don’t know if I want to go there. [inXile] was a more stable opportunity.”

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