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The History of Videogame Lawsuits

AsiNisiMasa writes "1UP is running an interesting piece detailing the history of lawsuits in the gaming industry. It reveals a bit about Nintendo's old strong-arm tactics, the origin of the third party developer, Electronic Art's employee abuse, and of course plenty of violent games being 'linked' to violent behavior. Jack Thompson gets an entire page to himself." From the article: "To show their appreciation, Atari took Activision to court, claiming that the company didn't have the right to develop Atari games. Atari lost, and more companies decided to follow in Activision's footsteps, creating the concept of third-party developers. It was a defining moment for video games."

13 of 116 comments (clear)

  1. Re:Infogrames by CastrTroy · · Score: 3, Informative

    Infogrames also made the Alone In The Dark Games. At least the first 2 or 3, when they were really good. Every game production company has their good games, and their bad games.

    --

    Anthropic principle: We see the universe the way it is because if it were different we would not be here to see it.
  2. Atari also won against Sega by smaffei · · Score: 5, Informative

    Atari won a lawsuit against Sega in the mid-90s. I think it had to do with the fact that Atari had a copyright on certain types of scrolling backgrounds in games. Sega used a lot of scrolling backgrounds in their late 80s / early 90s games.

    The Tramiels used the 90+ million dollars they won to keep Atari afloat until '96.

    --
    Sure, Windows PCs dominate the market. But so do cheap toupees.
    1. Re:Atari also won against Sega by Anonymous Coward · · Score: 2, Informative

      Actually, that's why all the advertizing says "Peter Jackson's King Kong" They do own that title and all inherant merchansizing $$ it comes with.

    2. Re:Atari also won against Sega by iphayd · · Score: 5, Informative

      I would imagine that all of these companies know full well that while the name and idea of King Kong are public domain, the current likeness is not. Using it in their marketing campaign would be legal suicide.

      Also, these companies know full well that they must use the CGI Kong, as to use the public domain one would not attract the young people that the movie is aimed at.

  3. Re:Shocking by AKAImBatman · · Score: 5, Informative

    Atari took no precautions to prevent third party games. The judge ruled that Atari didn't have a legal leg to stand on.

    Nintendo took a look at the case and added a patented algorithm to their systems called the "Lockout Chip". Atari asked the patent office for the info on the lockout chip so that they could reproduce it without paying Nintendo royalties. Nintendo sued on patent infringment and won.

    Nintendo was WAY more cut-throat than Atari ever was. Atari was just... bumbling.

  4. Atari lawsuit myth by Anonymous Coward · · Score: 1, Informative

    David Crane was on "The Screen Savers" when Tech TV existed and mentioned that Activision settled with Atari, and paid royalties to Atari on every cartridge.

    Coleco also paid royalties on their VCS emulator / expansion module. Atari made tons of money off of the bad games since they got a royalty from everyone basically. The myth got started because the settlements were non-disclosed. Atari was the first collectors of licesenses and they didn't care how bad the games were as long as they got their cut. And Atari had some of the most tennacious lawyers in the business. A month wouldn't go by before some lawsuit was announced from Atari-Warner.

    What - you think Atari became as large as they did so fast because of sales of Pac Man and ET?

    1. Re:Atari lawsuit myth by The+Lynxpro · · Score: 5, Informative

      "Coleco also paid royalties on their VCS emulator / expansion module. Atari made tons of money off of the bad games since they got a royalty from everyone basically. The myth got started because the settlements were non-disclosed. Atari was the first collectors of licesenses and they didn't care how bad the games were as long as they got their cut. And Atari had some of the most tennacious lawyers in the business. A month wouldn't go by before some lawsuit was announced from Atari-Warner.
      What - you think Atari became as large as they did so fast because of sales of Pac Man and ET?"

      Uhm, excuse me. Atari had a 90% stake in the industry before 1982, which was before the 2600 versions of Pac-Man and E.T. debuted. Atari sued because it held a ton of intellectual property which was something they learned to do because Ralph Baer and Sanders/Philips sued all the game companies based upon the intellectual property they had from the original Odyssey system. So if you want to blame the litigation trend on anyone, dump it on the doorstep of Ralph Baer because he couldn't handle the fact that his games essentially sucked and Atari did it better. Activision paid royalties to Atari because most of the early Activision games were created when the programmers had worked at Atari and took the stuff with them when they defected and founded Activision. Why do you think tech companies like Apple today insist upon coding rights to anything an employee of theirs created during their employment at Apple even if it was on their off-hours?

      The whole debacle on E.T. was because of Warner Communications. You can read about it in the biography of Steve Ross, the chairman of Warner Communications who was the first media person to see the value of videogames and multimedia (he bought Atari back in 1976), and later spearheaded the merger of Time and Warner before dying of prostate cancer. Ross wanted to get Steven Spielberg away from Lew Wasserman of MCA/Universal. So Ross did things like befriending Steven, having Warner pay for his house and moving costs, and then instructing Atari Inc. from above (and above Atari's objections) to pay Spielberg $25 million for the videogame rights to E.T. The gamble worked because Spielberg then decided to make half his movies for Warner Bros. and the other half still for MCA/Universal based upon personal loyalty to Wasserman. However, the gamble contributed to the collapse of Atari and the game industry (because E.T. sucked due to its rushed production) which hurt Warner's stock and triggered Rupert Murdoch's hostile takeover attempt which in turn prompted Warner to jump the gun and sell Atari way too cheaply just to get its bad news from continuing to depress the Warner share value.

      Remember...before Netscape, Atari was the fastest growing company in the history of American business. In 1980, Atari wanted to build a $500 million campus to consolidate itself in a central location in Silicon Valley instead of being spread through 75 different buildings at the time. Warner rejected the Company's request.

      Had Warners administered Atari a little more independently, today, the computer and videogame industries would be dramatically different, in my humble opinion. We certainly would not be running Microsoft Windows on the majority of computers sold today, for one...

      --
      "Right now, somewhere in this world, Scott Baio is plowing a woman he doesn't love," - Peter Griffin, *Family Guy*
  5. Re:kind of interesting by oberondarksoul · · Score: 5, Informative
    At the time it was necessary for them to be cautious with who they allowed to develop for their platform. The 1984 computer games crash was, in part, due to the massive flow of low-quality software being pumped out primarily for the Atari 2600; at the time, even Quaker Oats were developing games. Nintendo saw that there needed to be at least some regulation when they attempted to restart the games market; whilst they were heavy handed to the extreme, it did the trick.

    Nintendo were happy to let third parties develop for the NES, just so long as they played by Nintendo's rules.

    --
    And tomorrow the stock exchange will be the human race
  6. Cribbed from a better source... by mookoz · · Score: 2, Informative

    This whole article reads like a 6th grade book report on the Steven Kent book.

    http://www.amazon.com/gp/product/0761536434/qid=11 34956685/sr=8-1/ref=pd_bbs_1/002-3046164-8793630?n =507846&s=books&v=glance

    Get the book, it's a better read and a lot more detailed.

  7. Some bad info, lots of missing info. by CJayC · · Score: 5, Informative

    An interesting article, but seems to be missing a ton of research.

    That article completely reversed the actual story on the Nintendo vs. Blockbuster lawsuit. Nintendo won part of their case against Blockbuster for copyright infringement because Blockbuster was handing out photocopied manuals with the games. After the lawsuit, BBV could only either hand out the original manual (which were often never returned or damaged) or a short generic instruction sheet.

    The article also completely skips some of the more important lawsuits. Atari v Coleco (the mother of all emulation lawsuits), Nintendo v Prima (game maps ruled not copyright infringment), Nintendo v Color Dreams (an interesting case of clean-room reverse engineering), Sega v Accolade (another case of working around a lockout), Sony, Nintendo and Microsoft vs. Lik Sang (mod chips and flash carts), Sony vs. Bleem! (more emulation fun), and doesn't even begin to address the huge effects the DMCA had on the whole industry.

  8. Re:Shocking by The+Lynxpro · · Score: 5, Informative

    "But then Nintendo took Atari to court for creating third-party games for the NES and somehow got the opposite result. I do wish there were penalties for paying off judges in the United States."

    Different Atari. The Atari that took Activision to court (mainly because Activision was made up of ex-Atari programmers whose games had mainly been coded on "Company" aka Atari time before they left). That was the unified Atari Inc. which encompassed both the arcade division and the consumer (home videogames and computers) divisions. Post-1984 Atari was split into two different companies when Warner sold out to try to stop Rupert Murdoch (who later bought Fox) from taking over Warner. The consumer division became Atari Corp., owned by Jack Tramiel (well, 75% owned by them and 25% by Warner, later known as TimeWarner), and the arcade division called Atari Games Corporation (75% owned by Namco of Japan and 25% by Warner). Atari Games Corp. owned the rights to the name "Atari" for arcades only; Atari Corp. controlled the rights to the brand for home videogames and computers. Thus when Atari Games wanted to get into the home gaming business, they named their division "Tengen" and signed up to become an NES licensee. They then reverse engineered the NES authorization chip and tried to be an independent third party developer because they claimed Nintendo shorted them authorized cartridges to the benefit of Nintendo's other favored third party developers. TimeWarner jumped back in and bought out Namco, and then proceeded to try to get Atari Games and Atari Corp. to work together (and they tried reacquiring Atari Corp. too) which led to the cross licensing of post-1984 Atari Games Corp. arcade titles which then appeared for the Atari Lynx game system. Atari Games Corp. sued Nintendo for monopolizing the home videogame industry in America (which they did) based upon the exclusive contracts regarding supplying authorized cartridges whereas Atari Corp. sued Nintendo on antitrust grounds for prohibiting the NES licensees from porting their titles to non-Nintendo game systems (such as the Atari 7800, the Sega Master System, and the NEC TurboGrafx-16). Somehow Atari Corp. lost their side of the case, and then proceeded to hit Nintendo upside their heads over patent infringement and they settled for nearly $200 million.

    Funny how modern day Nintendo fanbois forget how vile Nintendo conducted its business back in the mid 80s to the early 90s...and its also helps to remember that once Nintendo was essentially forced to clean up its act, it lost its industry dominance to first Sega, and then Sony.

    As for Atari, its the name of Infogrames American division. It is comprised of all of the American interests of Infogrames as well as the properties that Hasbro Interactive had acquired before selling out to Infogrames (including the brand, titles, and intellectual property of the former Atari Corp as of 1996). The Atari Games Corp. was sold off to WMS Industries in 1996/97 when TimeWarner rejected a bid by Nolan (King Pong, founder of Atari) Bushnell to take over the company. WMS spun off its videogame interests (the former Williams and Bally-Midway arcade companies and the formerly TradeWest home game company) into what is now known as Midway Games. Which is why you'll see such (post-1984) Atari specific classic arcade games such as "Gauntlet" comprised (and or updated) in Midway's Greatest Hits titles even though they weren't Midway titles back in the day...

    --
    "Right now, somewhere in this world, Scott Baio is plowing a woman he doesn't love," - Peter Griffin, *Family Guy*
  9. Re:IF only... by Xserv · · Score: 4, Informative

    As a former general manager and arcade technician of an amusement center that had several DDR machines, Pump-It-Up (PIU) and the incarnation of the DDR clone, "In The Groove" (ITG), I can tell you that the only one that held any salt with the dance simulation fans was the DDR. We had DDR from 3rd Mix all the way through DDR Extreme (8th Mix) and it was the only one that remained popular.

    The pad design on the PIU was pure garbage. The corner/center arrow layout was difficult for kids to use because the transitions across the board were quite far. Most kids abandoned it after a few honest plays. The use of the center arrow was poorly done. It appeared to the player that they only put the Center step into the song steps because it was on the board and for no other real reason. The stepping patterns were not well thought out. Moreover, the graphic engine's sync with the steppnig patterns continually lagged. Let's not even mentioned how many of the Sub amps that had to be replaced by a faulty design. Now, the latest release by Andamiro for the PIU series wasn't too bad. I got to play this piece at the most recent IAAPA convention and was mildly impressed by the visual improvements and song selection which was majorly lacking in previous versions.

    As far as In The Groove, or ITG, which is based on the Stepmania PC versions that were out there, it was pretty solid. If my memory servies me correctly, ITG ran on *BSD. It was a "kit" for a DDR cabinet. The purchase price when I bought them were $2000 which included the ROMS, the decal set, USB card reader (which was always flaky) and the flimsy instruction manual. Not a bad upgrade. This software had some pretty great songs and step patterns that the arcade players enjoyed but the release was plagued by missed deadlines of song upgrades (we were promised semi-annual availability of new songs and "song packs" that we were never able to obtain). No new songs means no new players and the players that had been following it died off exponentially. Needless to say, after one year the game pretty much flopped and we converted it back to a DDR with increased earnings.

    As far as lawsuits in this area are concerned, Konami's suit against Andamiro was a long, drawn out process that wasn't over until the market for dance simulators was dead. A game genre that was on top of the arcade gaming community was dead in 3 years.

    Xserv

    --
    "I love lamp."
  10. Re:Shocking by AKAImBatman · · Score: 4, Informative

    That's because there was no such thing as a third party video game company when the Atari 2600 VCS originally debuted in 1977.

    It's even more complex than that. The VCS was only intended to play the dozen or so games released at launch. The idea of a truely generic console hadn't entered anyone's mind yet. Activision was one of the driving forces behind the idea that the VCS could be used generically.

    he renegade Atari employees who created Activision founded the third-party industry. The same industry that pretty much caused the 1982-84 videogame industry collapse that ruined Atari which it never truly recovered from which is why "carpet-bagging" companies like Sony and Microsoft now control the industry.

    Atari killed Atari. Sure, they were making a pretty penny off the VCS, but they assumed the revenue and continuously overspent. The market crash thus creamed Atari, but didn't kill them. Atari still released the 7800 post-crash, but wasn't able to convince the market to pick it. Further mis-management caused Atari to miss the boat on licensing the Nintendo, causing them to get their asses handed to them on a plate in the market.

    Sony gained control of the market much later thanks to a screwup by Nintendo which left Sony with Nintendo's next-gen hardware. (i.e. The Playstation) Microsoft just forced their way into the market, and hasn't had anywhere near the success as they'd have people believe.

    Nintendo put a lock-out chip in the NES to prevent games like *Custer's Revenge* from ever appearing on their console.

    That's only half the story. Nintendo definitely didn't want another Custer's Revenge (which didn't stop a few from coming along anyway), but they realized that the real problem was the glut of games. Quality suffered because there was no incentive to produce a good seller. So Nintendo restricted licensees to only 5 games per year. This restriction was mostly effective, and didn't produce problems similar to the crash of '83 until late into the Nintendo's life. The fight with the Genesis and the release of the Super Nintendo both headed off another crash.

    It should be remembered that Atari gained a 90% controlling interest in the earlier gaming industry without such tactics.

    Atari had competition from the Channel F (VES) before it ever released the 2600. However, the market was still fresh at the time, and the two consoles didn't directly compete like consoles do today. (Remember, the Atari 2600 was created only for a few games. It wasn't intended to be generic.) The Video Game crash of 1977, however, caused the Channel F to exit the market, leaving Atari with a 100% market share. That share would later be challenged by the more expensive Intellivision and Colecovision, but those two consoles would suffer heavily in the '83 market crash, again giving Atari the lead.

    The 7800, BTW, also had a lockout system to prevent a situation like the '83 crash.