Duck and Cover has obtained the actual statements from the court transcript that Bethesda wants redacted. Luckily, our source was able to snag these before the redactions went through.
Page 54, lines 21-25, with some extra lines
It's different than a console game in that besides actually making a game, you're making a game on a much grander scale. It's much more complex because it technically has to be able to support the number of people that are playing at the same time. It also has to be able to handle all the infrastructure that relate to billing and customer service and communication, all in one.
MMOGs have different types of revenue models, subscription models, associated with them. Some of them are subscription based, some of them sell product in what's called micro-transactions, but they all end up charging the end consumer, and because it's a subscription based system, it's very important that it works really well. It's very robust.
It's stable, so that the satisfaction is there, so a consumer doesn't get a bad experience and turn off. So that, in shorthand, is what an MMOG is.
Q. How do you know what an MMOG is?
A. One of the divisions of ZeniMax Media, ZeniMax Online Studios, is currently in production of an MMOG and has been in production for a number of years.
Q. Is it a Fallout MMOG?
A. It is not.
Page 69, line 15 through
A. ZeniMax Online Studios is creating a triple A MMOG along the lines of, I mentioned earlier World of Warcraft. It is, you know, a world wide launch. There's close to a hundred people that are working on the game currently. The budget for that, you know, is tens and tens of millions of to dollars.
MR. GERSH: Your Honor --
THE COURT: Um hum.
Page 70, line 9
THE COURT: No. He said close to one hundred. He did say how much. Go ahead, Mr. Marbury.
Q. Now, you said a triple A game. What's that mean?
A. In the industry the term refers to the highest quality type of product offering that there is out there. There's triple A console games. There are triple A MMOGs. Those are big brands that are supported by lots of advertising and marketing. Very well established.
Q. Now, if you turn to page four, 5.0 quality control. Do you see that section 5.1, 5.1.1 and 5.1.2?
A. I do see them both.
Q. Okay. Why did Bethesda think it was important to have quality control over the Fallout MMO?
A. Well, because it's our brand. I mean, Fallout is Bethesda's property and IP. It's important to protect it. You can't have -- you can't license your mark to somebody and let them do whatever they want with it willy nilly. Here we had invested millions of the dollars to make Fallout Three over multiple years, hundreds of people working on it. We had this -- We now have an IP in Fallout that's extremely value, and in any licensing agreement anywhere I would want to protect the integrity of my brand and my mark so that it is not diminished in the mind of the consumer or degrades something else that I'm building.
Q. And how does Bethesda accomplish that by the quality control provision in front of you?
A. Well, in 5.1.1 it says that Interplay knows how important Bethesda's good will is in all of that. And in 5.1.2 it says that Interplay warrants that the licensed product shall meet or exceed such quality standards. I'm not reading the whole section. Would you like me to or --
Q. No. That's fine?
A. I'm just paraphrasing.
Q. The last sentence refers to the same quality or exceed in quality the quality of a licensed product in connection with which Bethesda has used the licensed mark after the effective date. It's a lot of legalese. Can you tell me what that means?
MR. GERSH: Objection, Your Honor. His interpretation of what it means is irrelevant as to what the document says.
THE COURT: Sustained.
Q. Okay. What licensed product -- What licensed product did Bethesda use the licensed marks after the effective date of April, 2007?
A. Fallout Three, which was a triple A quality brand, and basically 5.1.2 refers to the fact that anything going forward has to be at or exceed the quality of Fallout Three.
Q. Please turn to page eight of that same agreement, section 9.3.5, which is in the middle of the page.
A. Nine point three point five. Yes.
Page 94, lines 8-16
Q. You never built a MMOG, have you?
A. We're building one right now.
Q. Prior to the time of the APA and the TLA, Bethesda and ZeniMax never built an MMOG, did they?
A. Bethesda began development with ZeniMax Online Studios -- ZeniMax Online Studios began to put together its design in I think late 2006, around 2007, so it's in development. Started around then and it's currently in development, it's been in development for a number of years.
Q. And not completed, right?
A. It is not completed.
Q. Okay. You told me yesterday that full scale development is a very complex concept, didn't you?
A. I believe I told you that making a MMOG is a very complex undertaking.
Q. And you did tell me also that an MMOG is a complex undertaking. So, you also told me that full scale development means all these different things to you, a fully scaled, assembled team, a lot of technical hurdles, undefined, that have to be overcome, the team is actually generating final product, whatever that means. And then you went on to say "And as I said, it's complex." Do you remember that?
MR. MARBURY: Objection, Your Honor. This is exactly the type of testimony that I tried to elicit and --
THE COURT: I'll accept that you think the term doesn't need definition and he's trying to show that it does.
MR. MARBURY: Well, if he's impeaching the witness with his testimony --
THE COURT: Okay.
MR. MARBURY: -- we'd appreciate it --
THE COURT: What would be more helpful is if you just ask him a question rather than try to ask him to remember exactly what he said at a deposition, even though it might have been just yesterday.
MR. GERSH: I will do that, Your Honor.
THE WITNESS: Thank you.
Q. Defining what is full scale development is very complex, correct?
A. I don't believe defining full scale development is complex.
Q. So it's very simple, then?
A. I believe that there is an industry definition of what full scale development is.
Q. Well, I want to pull us back to the agreement, okay. You told me at one time the MMOG is complex, correct?
A. It's very complex to make an MMOG, correct.
Q. And you'll agree that you've got to have some kind of team, but you don't know how many, and you've got to have technical hurdles, but those are not defined any why in the agreement, right?
A. No. I believe yesterday when you asked me that I told you my definition of what an assembled team would be and I referenced the one that we're building on today. Like currently my frame of reference for what it takes to make a triple A MMOG, I have about a hundred people assembled at ZeniMax Online Studios that's doing that.
So I can tell you that right now, and it's not finished, you know, that's where we are and it's growing. It's only going to get bigger as we get further down the pipe, so I have an idea of how many people it takes.
Q. Well, quality MMOGs can be created with a lot less people, can't they?
A. None that I can point to. I don't know if you point to any. If you can point me to some, I'd like to hear them.
Q. Who is Matt Frior?
A. Matt is the President of ZeniMax Online Studios.
Q. He created an MMOG that was critically acclaimed with 25 people in 18 months, didn't he?
A. I don't know that to be a fact.
Q. You don't? It's all over the internet.
THE COURT: Okay. Don't argue with the witness, please.
MR. MARBURY: Objection, Your Honor.
Q. Let me ask you this. Your Honor, can I -- I'd like -- Well, you don't have the deposition for me to read from so. We just got the copy sent to us this morning and haven't got the original. I apologize, Your Honor.
Yesterday, do you recall testifying that in relation to full scale development, and I quote "That there's a whole lot of stuff, very complex stuff, with no definition to this word in the agreement." Do you remember that?
A. Again, if you could --
Q. I'll --
A. -- I mean, do I recall --
Q. I'll bring the original deposition --
A. Do you recall the exact words. Your Honor, I don't remember the exact words.
MR. GERSH: I'll have to bring the original transcript after lunch, Your Honor. I think that'll be the better way to do it.
THE COURT: Okay. We're close to 12:00 if this is, if you're going to have to move into another area.
MR. GERSH: That's fine, Your Honor. Why don't we do that.
Page 137, line 19 through Page 138, line 12.
Q. Okay. In the upper right-hand corner, just above the word "Fallout," it clearly identifies that this book contains three smash hits in one radioactive pack, doesn't it?
A. That's what it says.
Q. And right underneath the word "Trilogy," it also shows what's purported to be in that box, Fallout, Fallout Two and Fallout Tactics, correct?
A. That appears to be the case.
Q. And all three of those games are pre-existing games that Interplay has the right to distribute, correct?
Q. And I believe that you testified earlier that there's no restrictions on Interplay creating compilations of its games of pre-existing works, correct?
A. So long as it met the specifics of that clause in the APA that required all packaging to be pre-approved by Bethesda.
Q. Is that all packaging to be pre-approved by Bethesda from the date of the agreement of April 7, 2007 to date?
A. All packaging means all packaging.
Page 115 of 218
Q. As a matter of fact, you were provided, that is Bethesda was provided with a schedule of games that Interplay had licensed in foreign countries as part of the Asset Purchase Agreement, correct?
A. I believe that that section 3.13 that we talked about, correct.
Q. And in the exhibit book before you that your counsel has provided, there is the Exhibit one, I believe is --
A. Is that tab one, sir?
Q. Yes, sir. Exhibit one is the Asset Purchases Agreement and Exhibit two is the Trademark License Agreement, correct?
A. Exhibit one is the Asset Purchase Agreement and Exhibit two is the TLA, yes.
Q. But, in fact, putting those two agreements together does not create the entire Asset Purchase Agreement, does it?
A. I believe there is a list of what comprises the entire Asset Purchase Agreement.
Q. Well, exhibits and other documents relating to the Asset Purchase Agreement have been left off of the exhibit that have been provided to you by your counsel, right?
A. Again, I haven't going through every tab here, sir, so I don't know exactly what has been provided with respect to the listing and the Asset Purchase Agreement.
Q. Well, you know there's exhibits and you know there's an Exhibit 3.13, which is a disclosure schedule, and you know there's references to trademarks and other things that went with the APA, and they're not part of your exhibit, are they?
A. They're not in this book. I mean, looking at only those two exhibits that you pointed me to.
MR. GERSH: Your Honor, may I mark as Interplay Exhibit two the complete version of the APA?
THE COURT: Well, you can mark what you say it is. If they don't agree, I don't know what you do.
MR. GERSH: Okay.
MR. MARBURY: Just to complete the record, Your Honor, there is a little confusion about what's actually in the document that he's using.
Q. Rather than me characterize this as being the complete version, let me just ask you a couple questions about it, if I may.
The first part of the document, and that is the first page says it's the Asset Purchase Agreement between Interplay and Bethesda Softworks LLC, dated April 4, '07, correct?
A. That's what the document you handed to me says.
Q. Okay. And then right after that we have the first 15 pages of the Asset Purchase Agreement, is that correct?
A. Well, I mean, without verifying this against the, I don't know if all 15 pages are here, and I would have to compare it against, with my counsel, if it was the first 15 pages, but taking you at your word, I understand what you're saying.
Q. Let's try to be a little more specific. We'll get you there? The bottom of page one, do you see some initials on there.
A. I do.
Q. And there's a circle on one of those initials that I asked you to make yesterday. Do you see that?
A. You asked me to make a circle with a blue pen, sir.
A. This is a circle with a black pen.
Q. Well, it's a photocopy.
Q. Is there a circle around it?
A. There is a circle around one set of initials.
Q. And whose initials are those?
A. I believe those to be Mr. Andonov's.
A. If this is the same copy you showed me yesterday.
Q. I represent to you that it is. Would you look at all 15 pages and tell me if Mr. Andonov's initials appear on all 15 of these pages?
A. It appears Mr. Andonov's initials appear on 14 of the pages. his signature appears on the final page.
Q. And you recognize the signature above his name, Vlatko Andonov?
Q. On then on the Trademark Licensing Agreement, do you see that document?
A. Is it attached to the set, sir, or did you want me to go back to the binder?
Q. No. I want you to continue to look at this document.
A. Okay. I'm there now. I think it says page one of 11.
Q. And do you see Mr. Andonov's initials on the bottom of any of those pages for the Trademark License Agreement?
A. I do. I mean, in this photocopied set I see it.
Q. Okay. Turn to the second to last page of this document.
A. Would that be the TLA or the entire document?
Q. The entire document, second to last page.
A. Got it.
Q. Do you see where it says part 3.13 of disclosure schedule?
A. Yeah. It's punched out a little bit here, but at the top of the page I do see part 3.13 of the dis and then it's missing a whole bunch, and it says "schedule." Got it.
Q. Do you see Mr. Andonov's initial on the bottom right hand corner of that document?
A. I believe I do.
Q. And on the left hand said it talks about Fallout current licenses?
A. As of March 30, 2007.
A. Correct. I see that.
Q. Bethesda, when it did its due diligence to complete this transaction, never asked Interplay to provide all of the box art that went with each one of the licensees that are set forth on this schedule, did it?
A. I'm not sure if they did or did not. I don't know if they did.
Q. You told me yesterday they didn't. You don't recall that?
A. I haven't seen it, so. Maybe you asked the question differently today. The way I heard your question just now is whether or not they had asked for it. But, okay. I haven't seen it. I don't believe Bethesda has seen the box art.
Q. At the time of the transaction, that is as of April of 2007?
Q. Bethesda didn't ask Interplay to provide it with all of the box art and look at it to see exactly what Interplay was already doing with it's licensees, did it?
A. Well, in the APA there's four games that are spelled out in that merchandising provision. And those four games were known games. I see the names of those games on this list. So, asking for box art of what was known, and in that section of the agreement, I mean they knew what was in the APA, those four games, and here's a listing of Fallout, Fallout Two, Fallout Tactics. I mean, these are the same names that appear in that same section.
Q. They're also the same three names that appear on Trilogy, aren't they?
A. Am I going back to look at that picture again?
Q. You don't remember the three names that are on the Trilogy game, Fallout, Fallout Two and Tactics?
A. Correct. They are the same names here that are on the front of this image.
Q. And does the box art that appears on Trilogy appear to be the same box art that Interplay was using at the time of the APA for Fallout, Fallout Two and Tactics?
A. I don't know what they were using at that time.
Q. Okay. No consumer has ever contacted Bethesda and said they bought Fallout Trilogy believing it was Fallout Three, did they?
A. I don't recall an incident. I don't recall an incident of that.
Q. And earlier today you testified, I believe, I think your word was "numerous people" had called your customer support for a patch, thinking that Bethesda had made the Fallout Trilogy game when, in fact, it was Interplay's game and they had to be redirected. Do you remember that?
A. Yeah, I did say that, because, you know, there was confusion in the consumer's mind that was calling, obviously. They thought the game was made by Bethesda. At one point there was a website up, I believe it was at Amazon.com, and it had the incorrect logo associated with, you know, either one of Fallout, Fallout Two, Fallout Tactics, associating it with Bethesda. So there was confusion in the marketplace and so that consumer that called was confused.
Q. Millions and millions of Fallout Three games were sold, right?
Q. And out of those millions and millions of games, are you telling me you got one call from one consumer that said "I have a problem with this game. I need help."
A. Again, the call wasn't from a consumer that purchased Fallout Three. The call was from a consumer that had purchasedFallout Trilogy and inadvertently thought that Bethesda was the publisher providing customer service. So the millions and millions of units of Fallout Three, I don't know how many units of the game that the consumer called about were actually sold and in the market at the time of the call.
Q. How many other consumers called that had purchased Fallout Trilogy, believing that Bethesda was the publisher, after the million and millions of Fallout Three games were distributed by Bethesda?
A. Okay. Again, I think you lost me, because I think that's the same question that you asked. I'm hearing it the same way, so --
Q. I'll try to rephrase it. How many consumers called Bethesda's customer support, believing that Fallout Trilogy was in fact manufactured by Bethesda?
A. A number of them. I don't know the actual count. I heard of incidents of calls that had happened with our customer service group.
Q. Yesterday you told me it was a couple. Now it's a number of them. Do you remember that from yesterday?
A. If that's what you're telling me that the transcript says. Yeah, I mean, a couple, a number of them. I'm not telling you -- I heard of a number of incidents, okay. So I used a different word. I'm sorry.
Q. Page 250, lines five through 16.
A. I don't know which one. Where am I looking, in this?
Q. In the small book of your deposition.
A. Um hum.
MR. GERSH: May I read from it, Your Honor?
THE COURT: Um hum.
A. Again, where are we, so I can follow?
Q. Page 250, line five through 15.
"Q: Has, have you received, has Bethesda received any complaints from customers concerning Fallout Trilogy?
A: I was made aware through our customer service group of a couple of calls into the call center. A number of them were people were complaining about something to do with a patch that they had inadvertently confused the Fallout Trilogy with the Bethesda title. They were informed by our customer service that they weren't and that they needed to get the support they needed from Interplay at Interplay's website."
Now, other than the use of the word "Trilogy" on the Fallout Trilogy game released by Interplay --
A. That's correct.
Q. You can look at that.
Q. Let me back up. Other than these couple of calls, there's been no other incidents of alleged consumer confusion between Bethesda's version of Fallout and Interplay's version of Fallout Trilogy, correct?
A. Well, I'm telling you that I got email and a photo from my sale guy who's saying that this is next to it on, I think it's Exhibit 22, on the shelf and, you know, he's confused as to what's going on, so --
Q. He's confused. Who is he?
A. Ron Seager.
MR. GERSH: Your Honor, there's no declaration from Mr. Seager. It would be pure speculation as to what his state of mind was.
THE COURT: Okay. Is it Plaintiff's contention that these can't be sold on the same shelf? I guess I'm confused. I don't -- These are legitimate Fallout games, the Fallout, Fallout Two and Fallout tactics. They're not allowed to, what is it they did wrong? I thought you told me it was just the use of the word "Trilogy."
MR. MARBURY: That's right, Your Honor. The use of the word "Trilogy," and what we're showing on other things, as I described earlier, elements of trademark infringement require, among other things, similarity in the goods and sales channels.
THE COURT: I just, I'm trying to find out what you think the violation is. On their boxes it says Interplay. On your boxes it says Bethesda, right. Is there anything they're suppose to -- I mean sometimes like with Burlington you see "Not a division of Burlington Industries." Are they supposed to say "Interplay not a division of Bethesda." I don't see that written down anywhere. Are they supposed to do that?
MR. MARBURY: Well, they're required to put the Bethesda marks on the back of the box for sure, Your Honor. But, no, they're not required to do that. I guess the point is a broader one that when someone makes a purchasing decision, they often do it, they don't come up and read the fine print, and when you look at these boxes side by side, you don't see the fine print where it says Bethesda or Interplay. So I think they're misleading and that's what the purpose --
THE COURT: What is misleading?
MR. MARBURY: Fallout Trilogy and Fallout Three both refer to the number three. It came out --
THE COURT: That's all you think is wrong. They're not, there's nothing else wrong with them selling their own product, at least at the time this was happening, without saying "not related to," or ...
MR. MARBURY: I think the problem that we're showing here in this picture is the fact that the word "Trilogy" is used right next to the word "Fallout."
THE COURT: Okay. That's all their contention is, so don't ask him whether he thinks there's something else confusing, because that's all they've told me they think is confusing.
MR. GERSH: Thank you, Your Honor. I appreciate the clarification.
Q. One last question about confusion. Nobody has ever contacted Bethesda, saying they thought they bought Fallout Trilogy believing it was Fallout Three, did they?
A. Are you saying that they're mistaking one product for the other? I think my question --
Q. Sir, listen to me, please. Just try to listen to my question. It's simple.
A. I am, sir. I am.
Q. I'll try to ask it again. Simple question. Has anybody. To your knowledge, ever contacted Bethesda and told Bethesda that they bought Fallout Trilogy believing they were buying Fallout Three, yes or no?
A. I don't know. I can tell you that by looking though at that image in 22, and the marks that you presented to me, beyond the fact that the three games are represented, which Interplay had the right to sell, the style of the packaging also is part of the brand integrity and the brand mark. And that --
THE COURT: Please just answer the question. Did somebody buy a $20.00 box of three of the original Fallout series thinking that it was the $50 Fallout Three game?
THE WITNESS: I don't know.
THE COURT: He has no information that anybody did that.
MR. GERSH: Thank you, Your Honor.
Q. In your declaration you mentioned something in your testimony about Amazon.com creating some confusion?
A. Yeah. I believe that it was mismarked who the publisher was.
Q. And when Interplay became aware of that, through Bethesda, they changed that immediately -- it got changed immediately, didn't it?
A. I believe it got changed. I don't know when they changed it.
Q. Okay. But it get changed immediately after they knew, right?
A. Again, it got changed, sir. I know it got changed.
Q. Okay. And did anybody contact anybody at Bethesda who had looked at the Amazon site and say "We're confused about who owns which game, Fallout Trilogy, Fallout Three," because of the Amazon mistake?
A. Again, I don't know.
Q. There was some mention earlier in your testimony about digital downloads. Do you remember that, when Mr. Marbury was asking you questions?
A. I do.
Q. There's nothing in the APA that restricts Interplay from having the ability to sell the pre-existing Fallout games via digital downloads, is there?
A. The APA talks about those games being manufactured.
Q. Sir, under 5.10 of the agreement, it not only talks about Interplay's rights to manufacture the agreement, but it talks about Interplay's rights to manufacture, have manufactured, sell and distribute, doesn't it?
A. I'm sorry. I don't know which deck I'm looking at here.
THE COURT: It's tab one, page 11.
THE WITNESS: Thank you.
A. It says that the seller has, that the purchaser authorizes the seller to exclusively manufacture and have manufactured, sell, distribute, pre-existing Fallout games and then it lists those games as pre-existing Fallout games.
Q. Okay. And there's nothing in this paragraph that says they couldn't sell or distribute those games via digital downloads, is there?
A. Well, there's nothing that says that they can either.
Q. But if you had wanted to restrict them, with all the lawyers and all the people looking at it, you could have simply put in the agreement "You do not have the right to sell via digital download," couldn't you?
A. As easily as Interplay could have put in the agreement that they want the rights to digital download.
Q. At the time you entered into the APA, that is Bethesda enter into the APA, you were aware that Interplay was selling games via third party distributors, correct?
A. Correct. That was that section that you pointed me to before, 3.13.
Q. And nothing changed by virtue of entering into the APA where Interplay couldn't continue to sell to those people, right, or through those people?
A. I believe that's why that exhibit was listed, so they could continue to sell these four titles to those people.
Q. And since the date of the APA, Bethesda never sent a letter to Interplay and said "Hey, by the way, you have to change the box art that your distributors are selling," did they?
A. I don't believe Bethesda did.
Q. And that --
A. I'm sorry.
Q. That has gone on through today. At no time did Bethesda tell Interplay something has to be changed with what you were doing previously, correct?
A. With respect to the fourth products being distributed through those distributors, the agreement does say that all packaging has to be approved by Bethesda. The obligations would be on Interplay to provide me the packaging that they're selling, or continue to sell.
That exhibit shows me who they're selling to, that's all. It's pre-approving those, the titles to those exhibitors. It's not showing me what's being sold.
Q. All you had to do was look at the documents and ask for them to know what was being sold, right, and you didn't do that.
A. But the obligation here is for them to provide me all packaging, so ...
Q. Well, you also had the right not to enter into this APA pursuant to this agreement specifically, if you didn't approve of what Interplay was doing, right?
A. We approved of those distributors, sir.
Q. Well, then you approved of the art work they were using also, right?
A. Not necessarily. If you're creating new packaging, if you're coming up with a new Trilogy box that is a compilation of the three games and you're stylistically putting in something in that looks like this, with the diagonal stripes in yellow that has nothing to do with the brand's integrity.
I mean, that's something that I would want to see to protect the integrity of my property. I've invested millions and millions of dollars marketing this game around the word with a look and the feel as a premium band. There is legacy product here that's been pre-approved in it legacy packaging. This is new packaging to me. I've never seen this and so this does not fit the style of the brand. And as such a consumer that walks in and sees this on the shelf would say "Hey, you know, Fallout. I get it. Fallout Trilogy. Three. I don't know. But, boy, what is this? This doesn't look like it," and as such it may degrade my brand.
Q. It may. It may not. It also may boost your brand too, might it?
A. I doubt it. I don't find this packaging looking very attractive. This is pretty obnoxious packaging.
Q. Have you done a consumer survey, sir, to come here and time us what consumers think both the Fallout Trilogy packaging, and whether it degrades your brand or not?
A. I don't have to. I think I --
Q. Have you talked to --
A. I think Bethesda has approval over all packaging, and so ultimately I wouldn't have to do that research, sir, in order to come up with a new package. I would entrust my marketing groups and they may go out and conduct research on packaging and they would come up with a style for the brand that fits with the overall program. That's what we would do.
Q. This is all your speculation about what may be and what may happen and what might happen, but you don't have one consumers, you don't have any document, you don't have any records, you don't have any survey, you don't have anything that says this is a problem and we don't like it?
A. I'm looking at tab 22 and I can tell you that next to the Fallout Three packaging in the green sepia tones, that the package that says "Fallout Trilogy" on it does not fit the look and feel of the overall brand. I can tell you that definitively.
Q. Well, your counsel has already told us that the problem is with the word "Trilogy." Are we expanding this now to something else?
A. I believe we talked at the beginning that we had bought all the IP. We own the marks, the name, the look, the feel, everything. I mean, this is all part of the investment that my company made in millions of dollars over a number of years, with hundreds of people working on this, in order to create a triple A product. The triple A product is the one on the right, sir. The one that says "Fallout Three," that's the award winning franchise. And as a company we want to do everything to protect that brand, that mark, that award winning program, and continue to further it so that we have a franchise in the future.
Q. Interplay won awards with their Fallout games, didn't they, as well?
A. I believe they did.
Q. Please take a look at page seven under tab two.
A. Okay. I'm looking at the TLA on page seven.
Q. Do you see paragraph 9.1?
A. I do, sir.
Q. This is under the TLA. Now, do you see where the termination provision says that Bethesda has to give in essence 30 days notice to Interplay to cure any default under the agreement?
A. That's at the bottom of the paragraph. Yes.
Q. Do you see that?
A. I do.
Q. Bethesda never gave Interplay 30 days notice to terminate the agreement, did they? Strike that. Bethesda never gave Interplay 30 days notice to cure any default before terminating the agreement, did they?
A. I don't believe they did, no.
Q. In fact, Bethesda terminated the agreement immediately, three days after April 4, 2009, correct?
A. I believe Bethesda terminated this, yes, correct, through that letter. Right.
Q. And nowhere in the letter, I think you're referring to tab number six now.
A. Um hum.
Q. Did your counsel, Mr. Lesher, tell Interplay "You have 30 days to cure before we terminate," did he? He just terminated it?
A. He says "Should you wish dispute the forfeiture of licenses, we're willing to review any documentation you care to make available which you believe establishes compliance. Please advise us within seven days of this letter if you intend to provide such documentation." So he is saying if there is proof based on the letter that you sent that you are, that you've met those two hurdles and, in the TLA, go ahead. Provide it. Give us, I don't believe we heard anything back, though.
Q. Would you read the last line of that same paragraph for the Court, please.
A. "The stated willingness to review documentation does not in any way extend your time for satisfaction of section 2.3, nor does it affect the above noted forfeiture of license rights under the MMOG agreement."
Q. So Lesher didn't give them 30 days or seven days or two days or any amount of time to cure any default. That sentence clearly says "This agreement's been forfeited no matter what
5 you do," doesn't it?
A. It says if you wish to dispute it, you've got a period of time to do that.
Q. And it also goes on to say it's been forfeited no matter what you do, right?
A. It says it has, yes.
Q. Okay. I think we established earlier this morning that a natural consequence of future games being released by Bethesda, whether it's Fallout Three or Fallout Four, or whatever it happens to be, would be that the pre-existing games would increase in sales, correct?
A. It's likely. It's a likely assumption, yeah.
Q. Okay. So going into the APA, Bethesda knew that when the Fallout Three game was released, with it's mark and it's good will, and it's image, that it would, Interplay would in essence be trading upon, by selling games, the image of the Fallout brand, correct?
A. It wouldn't be trading upon the image. They were granted merchandising rights to sell that pre-established product. And if you're asking me would they sell more of that pre-established product, they likely would if the game was a huge success. At the time that we entered into the agreement though, the game was still in development.
Q. That is Fallout Three was still in development?
A. Fallout Three, correct, was still in development.
Q. Okay. And the good will associated with Fallout Three, the natural consequence would be that it would trickle down to the pre-existing games?
A. The good will?
A. That Bethesda owns?
A. There would be good will to the property if it was a successful game overall for the Fallout brand, correct.
Q. Part of which Interplay the right to distribute?
A. The merchandising right for those four titles, the pre-existing four title, correct.
Q. There is nothing in the TLA that prohibits Interplay from creating a post-apocalyptic game on it's only, is there?
A. Well, they have the exclusive rights to the Fallout Three license, but there is nothing, which is a post-apocalyptic game, but there is nothing that prevents them from doing a game in a post-apocalyptic setting, as long as it didn't trade on the assets of Fallout. You know, the themes, the vaults, the looks, the style, the things like that. But to do a Mad Max game in a post-apocalyptic world, there is nothing in there that prevents it.
Q. Correct. So there's nothing to stop Interplay from continuing to manufacturing their trade, their MMOG, even if it's a post-apocalyptic game version, so long as it doesn't trade, ultimately when it's completed, and not approved, I'm assuming, on the image and the likeness of the rights owned by Bethesda, correct?
A. Well, that's correct. And if that is the case, given that they didn't pass those two hurdles in that test, you know, I would want the rights back so that I would know what to do with my post-apocalyptic franchise in the MMO space. If they had chosen the direction that you're talking about and create a Mad Max post-apocalyptic world, yeah, they can do whatever they want. But, you know, there are two very specific tests that they have to get over in order to hang on to my brand, and continued development of my brand. So, fine. Go ahead. Do it.
Q. Bethesda hasn't started at all to do anything to make a Fallout MMOG yet, correct?
A. That is correct.
Q. And I believe you told us earlier this morning that the first time ZeniMax Online started working on whatever MMOG it's working on was in 2006?
A. I believe it was around that time, yes.
Q. But that date's not correct, is it? It was actually 2007, wasn't it?
A. Well, I think the team was beginning to be assembled in 2006 and, you know, initial work, the production path was actually beginning to layout in 2007.
Q. You told us yesterday that ZeniMax started working on the online MMOG in late spring or summer of 2007. Do you recall that?
A. Yeah. I was referring to actually, you know, working and getting up in development. They were hiring people before that, so I'm clarifying it today. They started a little earlier.
MR. GERSH: One moment, Your Honor. One second, Your Honor, I may be done. Try to move this along. Your Honor, I don't have any more questions for the witness at this time.
THE COURT: Redirect.