Atari Settles Suit With Nestle Over Kit Kat Ad

By Jeffrey Yano, Esq. on January 25, 2018 | Last updated on March 21, 2019

The Kit Kat chocolate video game lawsuit is over. Nestle SA, the Swiss food company, has settled a lawsuit brought against it by video game maker Atrari Interactive. Judge Yvonne Gonzalez Rogers of the U.S. District Court for the Northern District of California issued an order Wednesday dismissing the case following the parties' resolution.

Kit Kat: Breakout

The dispute arose after the chocolate-maker used the 1975 game "Breakout" to promote its Kit Kat bar in commercials and on social media without permission. As Reuters notes:

"Breakout," a follow-up to the classic game "Pong," was created by Apple Inc co-founder Steve Wozniak with help from fellow co-founder Steve Jobs. It required a player to knock down rows of colored bricks with a paddle.

Atari accused Nestle of replacing the bricks with brown Kit Kat bars and using them in a Kit Kat Bites commercial titled "Kit Kat: Breakout" that showed adults and children using paddles to knock the bars down.

Atari sued, contending that Nestle's advertising amounted to copyright infringement, trademark infringement, false designation of origin, and unfair competition, among other business and intellectual property claims. While the two sides at first disputed where the lawsuit should be heard and the potential damages involved, the settlement seems to suit both parties. Terms of the confidential settlement were not disclosed.

Copyrights and Commercials

Gamers of a certain age who haven't heard of Atari aren't alone. As we've previously noted, the company's attempts to protect its various trademarks and copyrights has made it a known player in the intellectual property law world and somewhat of a bogeyman among game developers. Nestle's somewhat mystifying use of the game in its advertisement offered a fairly straightforward case, however.

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