Bethesda initial sought an injunction against Interplay in 2007 to stop them from using the Fallout license. The move was to effectively stop Interplay from working on a Fallout MMO, rumoured to be called Project V-13.
However, Duck And Cover reports that Bethesda decided to back down following an out of court settlement between the two parties.
However, Interplay has indicated it will press ahead with its countersuit against Bethesda as their lawyers argued that Bethesda tried to drag the case out to exploit Interplay's "negative financial situation".
Regardless, Bethesda's move frees Interplay to continue working on their Fallout MMO.