A settlement has been reached in the case between ZeniMax Media subsidiary Bethesda Softworks and Interplay Entertainment surrounding the fate of an MMO set in the Fallout universe.

Interplay had retained the right to make a Fallout MMO when it licensed, then later sold, the Fallout IP to Bethesda in 2007. The original agreement stipulated that Interplay must enter "full-scale" development with a minimum of $30 million in funding by April 4, 2009, in order to retain rights to the title. Bethesda had claimed that the conditions were not met and so Interplay's license was automatically cancelled, which Interplay naturally contested.

Under the terms of the settlement, all rights granted to Interplay in order to develop a Fallout MMO have reverted back to Bethesda, effective immediately.

"Interplay has no ongoing right to use the Fallout brand or any Fallout intellectual property for any game development," a ZeniMax press release stated. "ZeniMax will pay Interplay $2 million as consideration in the settlement, each party will bear its own costs of the litigation, and Bethesda will continue to own all Fallout intellectual property rights."

The agreement does give Interplay the right to continue the sale of original Fallout titles, including Fallout, Fallout 2, and Fallout Tactics through December 2013, after which time those titles and other merchandising rights become the property of Bethesda. Late last year, the dispute between both companies became strange when Bethesda claimed Interplay had no right to use any of Fallout's setting, characters, or story in Fallout Online. Interplay said that, clearly, a Fallout MMO would utilize the franchise's setting and story.

That isn't the only recent legal drama surrounding Bethesda and Fallout, as detailed by the ZeniMax press release:

In a separate but related matter, Bethesda commenced a second action against a purported developer of the Fallout MMO, Masthead Studios, Bethesda Softworks LLC v Masthead Studios Ltd. In the course of the original lawsuit against Interplay, Interplay had claimed that it had engaged Masthead Studios to develop the Fallout MMO under its license, and contended that Masthead was engaged in full scale development of that game. Bethesda filed its separate lawsuit against Masthead to assert copyright infringement and other violations of Bethesda's intellectual property rights. Under the MMO license granted to Interplay, Interplay was not permitted to sublicense any rights granted without the prior approval of Bethesda, approval which had never been requested or granted.

According to the release, Masthead has denied it has been using "any of Bethesda's intellectual property in developing an MMO." Masthead and Bethesda settled the claim on December 29, 2011.

With a win under their belt, our assumption is that Bethesda's lawyers will focus on its other legal tussle: the company's claim against Minecraft developer Mojang Specifications surrounding the indie dev's use of the word "Scrolls" as the title for its next major release.