Trademark

by Timothy Geigner


Filed Under:
breakout, candy, kitkat, trademark, video games

Companies:
atari, nestle



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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  1. identicon
    Anonymous Coward, 25 Aug 2017 @ 3:57pm

    The tale of Atari has taken a sad twist

    In old age, Atari started attacking others and claiming they infringed upon their work. Atari was clearly deranged at this point though and eventually one of those attacked was forced to put Atari out of its misery to prevent further attacks on the innocent.

    reply to this | link to this | view in thread ]

  2. icon
    That Anonymous Coward (profile), 25 Aug 2017 @ 3:58pm

    WE DIDN'T GET PAID!!
    MAKE THEM PAY US!!!
    WE EXIST TO GET PAID!!
    GIVE US MONIES!!

    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.

    reply to this | link to this | view in thread ]

  3. identicon
    Thad, 25 Aug 2017 @ 4:11pm

    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.

    reply to this | link to this | view in thread ]

  4. icon
    Anonymous Anonymous Coward (profile), 25 Aug 2017 @ 4:25pm

    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!

    reply to this | link to this | view in thread ]

  5. icon
    Unanimous Cow Herd (profile), 25 Aug 2017 @ 4:39pm

    Dear Atari

    Attacking candy companies will do little for your public image at a time when you are getting ready to launch a new console. Kids like candy AND video games.

    reply to this | link to this | view in thread ]

  6. identicon
    Anonymous Coward, 25 Aug 2017 @ 4:59pm

    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.

    reply to this | link to this | view in thread ]

  7. identicon
    Thad, 25 Aug 2017 @ 5:06pm

    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.

    reply to this | link to this | view in thread ]

  8. icon
    Anonymous Anonymous Coward (profile), 25 Aug 2017 @ 5:18pm

    Re: Re: Sad, sad, sad

    Aha! Well, that saves the integrity of the original Atari, somewhat, but denigrates all the antecedent Atari's. So when there are all these Atari's around, how is one to know which is the good one?

    reply to this | link to this | view in thread ]

  9. identicon
    Anonymous Coward, 25 Aug 2017 @ 5:32pm

    To get around that, Atari itself admits it isn't really in the gaming business any longer, but rather in the licensing business.

    Seems like this could be used to invalidate the trademark altogether, as the company hasn't functioned in the industry it holds a trademark for in many years.

    reply to this | link to this | view in thread ]

  10. icon
    Ryunosuke (profile), 25 Aug 2017 @ 5:37pm

    an important question

    Who the hell plays an Atari 2600/5200/7800 anymore?

    reply to this | link to this | view in thread ]

  11. identicon
    Thad, 25 Aug 2017 @ 5:45pm

    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)

    reply to this | link to this | view in thread ]

  12. identicon
    Pixelation, 25 Aug 2017 @ 6:02pm

    Good thing Atari is protecting their IP. I mean, how else will they be able to promote the progress of science and useful arts?

    reply to this | link to this | view in thread ]

  13. icon
    Stephen T. Stone (profile), 25 Aug 2017 @ 6:19pm

    I’ve crunched the numbers here, and unless Nestlé has a sugar daddy waiting on 5th Avenue, this looks like a hefty pay day for Atari. Then again, maybe Nestlé 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.

    reply to this | link to this | view in thread ]

  14. icon
    Anonymous Anonymous Coward (profile), 25 Aug 2017 @ 6:53pm

    Re:

    Then again, baby ruth might have a few reeses pieces to add to their almond joy.

    reply to this | link to this | view in thread ]

  15. identicon
    Nick-B, 25 Aug 2017 @ 9:32pm

    At the thought of getting free publicity and having their brand associated with a popular candy bar....

    Atari sues.

    reply to this | link to this | view in thread ]

  16. identicon
    ryuugami, 25 Aug 2017 @ 10:47pm

    Typo alert!

    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.

    That should be "Atari goes on..."

    reply to this | link to this | view in thread ]

  17. icon
    David (profile), 26 Aug 2017 @ 11:56am

    Next step?

    I guess they will be going after acne medicine companies next.

    reply to this | link to this | view in thread ]

  18. icon
    JoeCool (profile), 26 Aug 2017 @ 11:58am

    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.

    reply to this | link to this | view in thread ]

  19. identicon
    Anonymous Coward, 26 Aug 2017 @ 1:39pm

    Ok, hands up whose first thought was "Wait, Atari still exists?"

    reply to this | link to this | view in thread ]

  20. identicon
    Anonymous Coward, 27 Aug 2017 @ 7:26am

    Re:

    If people are not forced to pay, licensing business people will not continue to create more licenses.

    The horror!

    reply to this | link to this | view in thread ]

  21. identicon
    Anonymous Coward, 27 Aug 2017 @ 7:27am

    Re: Re: an important question

    My original nintendo still works :)

    One of the controllers is a bit goofy.

    reply to this | link to this | view in thread ]

  22. icon
    JoeCool (profile), 27 Aug 2017 @ 8:40am

    Re:

    Only as a group of lawyers hoarding some ancient trademarks and copyrights.

    reply to this | link to this | view in thread ]

  23. identicon
    JEDIDIAH, 28 Aug 2017 @ 5:37am

    It's better than that even.

    Not only that but some of us remember playing Arkanoid on the ST 30 years ago.

    reply to this | link to this | view in thread ]

  24. identicon
    Thad, 28 Aug 2017 @ 7:38am

    Re: It's better than that even.

    Sure. Arkanoid, Alleyway, there were a *lot* of Breakout knockoffs over the years. I had a programming book back in the 1990s whose first lesson was a Breakout clone that it called "Break-Thru".

    reply to this | link to this | view in thread ]

  25. icon
    wshuff (profile), 30 Aug 2017 @ 6:51am

    Re:

    I dunno. Atari might think they're going to roll through this case like a tank and defeat this space invader, but if Nestle has a good defender then the battlezone may turn out to be more pitfall than adventure. That is the risk you take when you go berzerk and start suing.

    reply to this | link to this | view in thread ]


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