Atari Sues Nestle Over A KitKat Commercial With An Homage To 'Breakout'

from the gimme-a-break dept

A few decades ago, Atari was one of the few indisputable titans in the the early gaming industry. With early titles like Pong and Breakout, Atari became a household name for gamers. At the present, however, Atari is little more than an intellectual property troll, scouring the world for anything it might frame as copyright or trademark infringement, often to laughable lengths. For the rest of this post, it is important to keep in your mind the fact that this is now Atari’s chief industry: licensing and lawsuits.

In 2016, Nestle unveiled a new commercial for its KitKat candy. That commercial, entitled “Breakout”, can’t currently be shown as it appears it’s no longer available on YouTube or Vimeo. It’s unclear who is responsible for the commercial no longer appearing on those sites, but it’s certainly clear that they were taken down in relation to a lawsuit filed by Atari against Nestle for both trademark and copyright infringement around the video.

In a complaint filed on Thursday in federal court in San Francisco, Atari said Nestle knowingly exploited the “Breakout” name, look and feel through social media and a video, hoping to leverage “the special place it holds among nostalgic Baby Boomers, Generation X, and even today’s Millennial and post-Millennial ’gamers.’”

The commercial did this by encouraging customers to “breakout” and eat KitKat bars, while replacing all of the iconic imagery from the original game Breakout with Nestle imagery, such as replacing the blocks in the game with KitKat bars. For these sins, the lawsuit filed by Atari claims both that customers could be confused into thinking there was some association between the two companies and that the imagery Nestle used in the commercial constituted copyright infringement on the original game. Both claims stretch this writer’s credulity quite thin.

On the trademark claim, Atari goes to some lengths to detail the history of the game and the vaunted status the company once held in the industry. In doing this, it notes that it has held trademarks on varieties of the term Breakout for nearly forty years. The problem is that all of these trademarks are for goods and services that have nothing to do with the food or confection industries. To get around that, Atari itself admits it isn’t really in the gaming business any longer, but rather in the licensing business. So, by using the term “breakout” in its ad campaign, Atari claims it has been harmed by Nestle’s use of the term in that it wasn’t allowed to license that term to the very same Nestle.

Atari’s IP licensing activities are responsible for a significant portion of its annual revenues. Revenues from its best-known games make up a significant portion of those revenues. Without the benefit of its licensing revenues, profits of Atari would be significantly lower. As an initial, straightforward matter, Nestlé has denied Atari the licensing fees it would have charged Nestlé for use of Atari’s intellectual property in the widely distributed KIT KAT “Breakout” campaign, had Atari agreed to such use.

Sophistry in a trademark case? Gross. Nestle goes on to note that it has been harmed because now it won’t have the opportunity to license other classic games like Asteroids and Centipede to the massive candy market. The problem is that this isn’t how trademarks work. Certainly, had Nestle attempted to make an actual video game to market its KitKat bars and called it Breakout, Atari would have valid reason to go ballistic. This isn’t what happened. Nestle made a commercial for candy. Atari does not sell candy, nor does it hold any trademarks for “breakout” for the candy industry.

On the copyright side, the claims are even more laughable.

In at least one video advertisement, Nestlé’s ad begins with four actors – two young, two middle-aged, in keeping with Breakout’s multi-generational appeal – sitting on a couch playing a video game. The game is revealed to be Breakout, with the nominal and insignificant difference between the classic version and Nestlé’s unauthorized version being that the long, rectangular bricks players “break” in the former are replaced with long, rectangular bricks made of KIT KAT chocolate bars in the latter.

Nestlé’s “Breakout” video advertisements depict imagery of the Breakout game which is covered and protected by Atari’s valid registered copyrights. The game simulation depicted in Nestlé’s video advertisement is substantially similar to the Breakout graphics covered by Atari’s valid registered copyrights.

Here again, Atari seems to be confused what its intellectual property rights actually protect it against. The copyright for Breakout covers its specific expression. By Atari’s own admission, Nestle transformed that expression to serve as an homage to the game while relating it to KitKat bars. On top of that, Nestle did not make a video game. They simply created images that looked like one. Calling this copyright infringement is akin to the NFL suing Mars for its “Want to get away” Snickers commercial that showed an NFL referee in the middle of a football game as if Mars was putting on a football event. That would rightly be called crazy. Claiming copyright here is the same thing.

Too many lawsuits these days try to marry trademark and copyright infringement claims, trying to bolster one with the other. But this one from Atari is pretty special in its brave hilarity. Fortunately, Nestle is an organization with the resources to fight back against a once proud gamemaker that has since gone full on troll.

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Companies: atari, nestle

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Comments on “Atari Sues Nestle Over A KitKat Commercial With An Homage To 'Breakout'”

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That Anonymous Coward (profile) says:


Seriously, courts are wasting time on this ground breaking idea that an image in a commercial is stealing the thunder of a computer game.

Its a pity copyright is forever, otherwise they could have made this commercial & maybe that would have lead to someone making a new game… but we need to keep the sacredness of breakout in the hands of a few to reap every trillionth of a cent from… thats totally more important than a public domain or intelligent laws.

Thad (user link) says:

Re: Re:

Not really; there have been a hell of a lot of Breakout knockoffs over the years and there’s not much Atari can do about it.

Ars had a pretty good article a few years back about how hard it is to win a copyright infringement suit over a game, even an obvious knockoff: Game makers face uphill battle proving copyright infringement in court

Hell, Breakout itself is just a one-player version of Pong.

Anonymous Anonymous Coward (profile) says:

Sad, sad, sad

In order to remain profitable, Atari went from a company making games to a company that mines profits from the intellectual property rights from their former heyday. To bad intellectual property rights mining is not like a gold mine, where when the veins run out, the mine closes. In this case, the vein was game making. But then the Disney copyright extension was intended to pay the college tuition of the grandchildren and maybe great grandchildren of the creators. Promoting innovation and new creation…HA!

Thad (user link) says:

Re: Sad, sad, sad

Atari went from a company making games to a company that mines profits from the intellectual property rights from their former heyday.

That’s not really accurate. Atari’s name and copyrights have moved through multiple companies at this point. The current Atari is not the Atari that made games in the 1970s and ’80s, it’s the company that bought the assets from the company that bought the assets from the company that bought the assets from the company that bought the assets from the Atari that made games in the 1970s and ’80s.

Thad (user link) says:

Re: Re: Re: Sad, sad, sad

A glance at Wikipedia shows a real tangle. Atari Inc was the original company founded by Bushnell, ’72-’76. Then Bushnell sold it to Warner; he left the company in ’78. Warner sold the console and PC divisions to Tramiel Technology in ’84 and the arcade division to Namco in ’85. Tramiel sold to JTS in ’96; they sold it to Hasbro in ’98; they sold it to Infogrames in ’01.

So I guess the breakdown goes something like:

  • Atari Inc (1972-1976)
  • Warner/Atari Inc (1976-1984)
  • Tramiel/Atari Corp (1984-1996)
  • JTS Corp/Atari Corp (1996-1998)
  • Hasbro/Atari Interactive (1998-2001)
  • Infogrames/Atari SA (2001-present)
Anonymous Coward says:

Different Ataris

A few decades ago, Atari was one of the few indisputable titans in the the early gaming industry. … At the present, however, Atari is little more than an intellectual property troll

Correction: Atari was the name used in the 80s by a famous video-game company. Atari is now the name used by an unrelated company (formerly Infogrames). They bought the name and copyrights, but there was no company "Atari" that turned into a troll.

The original company was split in 2, one merging with JT Storage in 1996 and becoming (chapter 7) bankrupt in 1999, the other ending up inside Midway Games before being disbanded in 2003.

JoeCool (profile) says:

Re: an important question

Lots of people. More than you would think. And it’s nearly every old console, not just the old Atari consoles. There are sites dedicated to fans of these old consoles where discussions occur on playing the games, and sometimes modifying them to be better, like the improvements made to the 2600 versions of PacMac and Asteroids and ET.

Stephen T. Stone (profile) says:

I’ve crunched the numbers here, and unless NestlĂ© has a sugar daddy waiting on 5th Avenue, this looks like a hefty pay day for Atari. Then again, maybe NestlĂ© has mounds of evidence to work in their favor—life savers, if you will. I just hope they don‘t let it all slip through their butterfingers and into the hands of a bunch of nerds who can sell it to the Atari people for a hundred grand.

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