The battle between Bethesda and Interplay continues. After the Fallout 3 developer was initially denied a preliminary injunction against Interplay, Bethesda appealed the decision to the Fourth Circuit court of appeals. Yesterday, documents released by the court [PDF] reveal that the appeal was also denied.

According to the Unites States Court of Appeals documents, Bethesda was unsuccessful in its quest to prove the "district court abused its discretion and misapplied the law in concluding that Bethesda failed to establish a likelihood of irreparable harm." Essentially, the developer/publisher was unable to show the court that Interplay's continued work on a Fallout MMO would damage its business.

The dispute between Bethesda and Interplay goes back to a April 2007 deal that saw Bethesda pay $5.75 million to purchase the Fallout licence. As part of the deal, Bethesda agreed the rights for an online Fallout title would remain in the possession of Interplay, the franchise's original creator. The deal hinged on the condition that Interplay's "full scale development" of the project would begin with a minimum of $30 million in funding within two years of the agreement.

Documents from Interplay revealed that Bethesda intended to take legal action to prove Interplay had failed to meet the requirements on April 4, 2009. Bethesda's original injunction was meant to halt all production of a Fallout MMO at Interplay until the matter could be resolved; however, because Bethesda could not prove the game's ongoing development during the dispute would harm its business, the courts denied the injunction and its subsequent appeal.

Adding a touch of strange to the battle, Bethesda claimed that Interplay had no right to use any of Fallout's setting, characters, or story in Fallout Online, and only the franchise's name in December 2010. Interplay stated, emphatically, that Bethesda was aware its Fallout-branded MMO would feature Fallout-related elements, in order to make it recognizable as a Fallout title. Yes, this argument actually took place.

Interplay has said that it'll enter public beta testing in 2012, then launch in the second half of 2012. Assuming it survives this legal battle, of course.

This is the second legal scuffle Bethesda is currently tangled in. The company is also in a dispute with indie developer Mojang Specifications over the use of the word "Scrolls" in the company's next title. Bethesda parent-company ZeniMax Media claims the use of 'Scrolls' infringes on its own 'Elder Scrolls' trademark.