Atari Gets The Settlement It Was Surely Fishing For Over An Homage To 'Breakout' In KitKat Commercial

from the gaming-the-system dept

As readers of this site will know, once-venerated gaming giant Atari long ago reduced itself to an intellectual property troll mostly seeking to siphon money away from companies that actually produce things. The fall of one of gamings historical players is both disappointing and sad, given just how much love and nostalgia there is for its classic games. It was just that nostalgia that likely led Nestle to craft an advertisement in Europe encouraging buyers of candy to “breakout” KitKats and included imagery of the candy replacing a simulation of a game of Breakout. For this, Atari sued over both trademark and copyright infringement, stating for the latter claim that the video reproduction of a mock-game that kind of looks like Breakout constituted copyright infringement.

As we discussed in that original post, both claims are patently absurd. Nestle and Atari are not competitors and anyone with a working frontal lobe will understand that the ad was a mere homage to a classic game made decades ago. If the products aren’t competing, and if there is no real potential for public confusion, there is not trademark infringement. As for the copyright claim, the expression in the homage was markedly different from Atari’s original game, and there’s that little fact that Nestle didn’t actually make a game to begin with. They mocked up a video. Nothing in there is copyright infringement.

It was enough that I’m certain some of our readers wondered why Atari would do something like this to begin with. The answer is the recent news that a settlement has been reached in the lawsuit, and it was almost certainly that settlement that Atari was fishing for all along.

Vintage gaming company Atari has settled a lawsuit accusing Swiss foods giant Nestle of using one of its classic video games to sell Kit Kat bars to nostalgic gamers without permission. On Wednesday, U.S. District Judge Yvonne Gonzalez Rogers approved Atari’s request to voluntarily dismiss the case with prejudice.

Both parties reached a settlement during a conference in Magistrate Judge Sallie Kim’s courtroom on Dec. 12, 2017, according to court records. The terms of the agreement are confidential.

So, while we don’t know the terms of the settlement, it’s incredibly common for megaliths like Nestle to throw settlement money at pests like Atari to make them go away. The settlements are often not anything like the potential rewards for the plaintiff if the case had gone to trial, but that’s entirely besides the point. The point is to get the settlement. It’s essentially free money, after all, reliably gained by filing lawsuits trolling successful companies with spurious legal claims that at best skirt the line of what intellectual property laws actually say.

It’s for that reason that trolls like Atari seek treble and punitive damages in these suits, merely as a way to alter the risk calculation for the legal teams of their victims. A company like Nestle, worth hundreds of billions of dollars, has easy math to do when it comes to deciding how to make this all go away. The problem with this is, of course, that not every company has billions of dollars of revenue coming in. It’s the smaller companies that are truly victimized by IP trolls that fill their war chests with these kinds of easy settlements.

Filed Under: , , , ,
Companies: atari, nestle

Rate this comment as insightful
Rate this comment as funny
You have rated this comment as insightful
You have rated this comment as funny
Flag this comment as abusive/trolling/spam
You have flagged this comment
The first word has already been claimed
The last word has already been claimed
Insightful Lightbulb icon Funny Laughing icon Abusive/trolling/spam Flag icon Insightful badge Lightbulb icon Funny badge Laughing icon Comments icon

Comments on “Atari Gets The Settlement It Was Surely Fishing For Over An Homage To 'Breakout' In KitKat Commercial”

Subscribe: RSS Leave a comment
Anonymous Coward says:

Wrong way to go about it

A company like Nestle, worth hundreds of billions of dollars, has easy math to do when it comes to deciding how to make this all go away.

I believe there is an old saying "Once you pay Danegeld, you never get rid of the Dane".

The proper way, in my opinion, to go about this would be to buy Ninteno, then fire the C level execs and legal folks.

Anonymous Coward says:

Whatever ever value there is to the name, Atari owns it, NOT Nestle.

“it’s incredibly common for megaliths like Nestle”

FIRST, do you know, or have ANY idea what a “megalith” is? Prove it by quoting a definition. Because I say you are an careless ignorant boob and/or drunkenly mistaken.

2nd, a “megalith” should have lawyers that know better, so boo hoo. Trying to plug “the little guy” as hypothetical victim here fails, just more of Techdirt’s characteristic exaggemeration in absence of any definite harm.

That Anonymous Coward (profile) says:

I want to feel bad, but corporations have been engaging in IP warfare for years. Even some of the ‘good guys’ can’t look away from the money a questionable patent can rake in. The legislatures around the globe are willing to hand more & more power & protection to IP, why are we shocked it ends up leveraged to extract cash from each others coffers?

The imaginary 100 Trillion Dollars ‘stolen’ by IP theft can be recovered the lawyers tell them. Each garden getting more walled & more hostile while passing the costs onto consumers who didn’t think there was a KitKat Breakout game but will pay a bit more for kitkats.

Once upon a time they tried to make new cool things, now they are focused on how they can twist IP to cover more things & get paid again and again.

We built the tools & made it to the moon using our ideas.
Today some chick who rolled a sex tape into an empire is worth a stupid amount of money b/c makeup.

A majority of people have given up on creation, someone will claim to own the idea or concept & it isn’t worth trying when you know you’ll be killed by the parasites who offer nothing to the world but ‘interesting’ paths to say a filing cabinet is totally the same as a hard drive because they both have folders so we are owed 32 billion!!!

JoeCool (profile) says:

Re: Re:

Once upon a time they tried to make new cool things, now they are focused on how they can twist IP to cover more things & get paid again and again.

Those at Atari who used to make things have long since moved on, many retired, and some even dead. The problem was that the last time Atari passed hands, the ‘people’ who bought it were lawyers with a plan to monetize the IP. The moment you learned who bought Atari, you knew it was over.

Thad (user link) says:

Re: Re: Re:

Indeed. I talked about this in the previous thread; here’s an excerpt:

  • 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)

The current Atari has nothing to do with the original company; it’s the fifth-hand buyer of that company’s assets.

ECA (profile) says:

Re: Re: Re: Re:

And WHEn does game/program CR end??
Atari, has been releasing the SAME games, over and over, for ANY console/PC out there…Every year..
Since the original was created for the Atari 2600..1976..
That is over 40 years.
NOT even on the same hardware..(dont think there was any hardware)

And has been Copied so many times, with MANY versions and variations..
But a Claim that they damaged Many other titles, because of this..

Damage? Why not consider it an Advert..FREE ADVERT..
I havent seen 1 Atari commercial in YEARS..

Add Your Comment

Your email address will not be published.

Have a Techdirt Account? Sign in now. Want one? Register here

Comment Options:

Make this the or (get credits or sign in to see balance) what's this?

What's this?

Techdirt community members with Techdirt Credits can spotlight a comment as either the "First Word" or "Last Word" on a particular comment thread. Credits can be purchased at the Techdirt Insider Shop »

Follow Techdirt

Techdirt Daily Newsletter

Techdirt Deals
Techdirt Insider Discord
The latest chatter on the Techdirt Insider Discord channel...