Fansite Duck and Cover recently quoted an Interplay investor who said Bethesda had dropped its lawsuit against the studio, but according to Bethesda, the battle continues

Fans of the legendary Fallout video game series breathed a collective sigh of relief earlier yesterday, when fansite Duck and Cover quoted an Interplay investor who said that Bethesda Softworks finally dropped its lawsuit against the studio over its Fallout MMO (codenamed "V13"). Unfortunately, the elation was short-lived after Bethesda shot down the rumor in response to Kotaku's inquiry. [via MMORPG] Duck and Cover's initial forum announcement quoted Interplay investor Frymuchan, who gave the following statement:

Bethesda dropped their appeal of the lawsuit with Interplay and a secret deal was struck (maybe they will release the terms of the deal soon, probably so). Anyways, this is awesome news for Interplay stock. The appeal by Bethesda was dropped yesterday. I'm assuming part of the deal was that Interplay drop their countersuit against Bethesda. At any rate, this will likely mean that V13 will be moving full steam ahead, terms of the new deal not yet known but the fact that the game will be made is nothing but good news for Interplay.

Frymuchan provided text from the appeal dismissal, citing a court document from Bethesda's law firm, Steptoe and Johnson. However, the settlement turned out to be a "minor procedural thing," according to Bethesda's Pete Hines, who replied to Kotaku's inquiry in the aforementioned article. It turns out Bethesda's dismissal for appeal, filed in this report on April 21, was merely related to Interplay's right to keep selling Fallout game properties and continue development of its Fallout MMO, as we reported back in December. "The bottom line is it's an ongoing legal matter, it's in no way, shape or form done," Hines told Kotaku. "We're going to let the process play out in the courts, which is what we've said all along, but beyond that I can't give specifics as to procedures."

Bethesda filed the original lawsuit last spring, after Interplay couldn't meet the funding and deadline requirements of its Fallout MMO licensing deal with the company. To learn more, check out our coverage from September 2009. Despite Interplay's setbacks and the lawsuit it's facing, development art and screenshots were occasionally "leaked" online, indicating that the MMO is still under-development. For now, the fate of "Project V13" might be uncertain, but at least Interplay retained its rights-to-develop; we can't dismiss it as vaporware yet, even if Bethesda's lawsuit still looms overhead.