The History of Video Game Lawsuits

For as long as there has been a video game industry, people and companies have been suing each other over video game related issues. There are numerous well-known and ludicrous legal disputes that have transpired over the video gaming ages, some of which border on a devilishly clever marketing campaign. In this article, MyGaming takes a look at the history of video gaming legal disputes, and appropriately, the first big legal issue arose between the first titans of the video game industry.

Anyone for tennis?

In 1975 Ralph Baer and Magnavox, creators of the first home console system – the Magnavox Odyssey – sued Atari (and many other companies) for their clones of the Magnavox Odyssey’s ‘Tennis’ game. The Atari game in question was ‘Pong.’

Due to the patents held by Baer and Magnavox parent company Sanders Associates, and coupled with the fact that there was ample evidence of Atari founder Nolan Bushnell having played ‘Tennis’ at a product exhibition, Atari decided to settle the case outside of the courts. Other companies were also forced to pay royalties for similar ‘Pong’ clones.


As part of the June 1976 settlement, Magnavox would obtain rights to any Atari products released for the next year. Atari therefore decided not to release any new titles for the next year. This was the first strike from Magnavox, Sanders and Baer in what was to become a lucrative business of defending their intellectual property and receiving license fees.

In 1985 Nintendo was fast becoming a video game titan themselves, leading the invasion of the third generation of consoles, but even they could not stand up to the watertight patent laws, and after attempting to invalidate Baer’s patents, they were forced to continue paying royalties to Sanders.

Activision – the good guys

In what would lead to another defining moment in the video game industry, in 1979 a number of disgruntled Atari employees left the company to form their own – Activision – with the vision of crediting and promoting game developers along with the titles they developed, contrary to the policy of Atari. Ironically, this is rather contradictory to the treatment Activision Blizzard currently subjects it employees to (if you believe the media reports).

Activision created a number of popular titles for the Atari 2600 console, and many were even more popular than original Atari titles. These titles helped increase sales of the 2600 but even so, Atari decided to sue Activision. Atari eventually lost the case in 1982, and the concept of the third party developer was born.


Atari refuses to Pac it in

In 1981, Phillips released ‘K.C. Munchkin!’ for their Odyssey II console – quite obviously inspired by the 1980 arcade phenomenon ‘Pac-Man.’ Munchkin! was greatly improved however and had an altered gameplay with players chasing down mobile dots, rather than gobbling up stationary ones.


Atari, who owned the exclusive rights to produce home versions of ‘Pac-Man’ games, wasn’t too pleased and decided to sue Phillips, and they actually won a case for once. The courts decided that the changes in appearance emphasised the plagiarism of the concept, and set a precedent for how the look and feel of software would be evaluated in future copyright lawsuits.

Damned if you Nintendo, damned if you Nintendon’t

Nintendo initiated and defended against a number of lawsuits during their 1980’s reign. In a case with an amusing and ironic outcome (that would have had Sega and Atari executives slapping their collective foreheads and shouting “D’oh!” had Homer Simpson mimesis been ingrained in the collective psyche at the time) Nintendo was sued under anti-trust laws.


Controlling the majority of the home console market, Nintendo was found guilty of squeezing out their competitors, and rather strangely was ordered to issue US$25 million in coupons to customers who purchased a console between June 1988 and December 1990. The flood of US$5 game discount coupons boosted game sales and probably did nothing to help Atari and Sega’s cause.

It doesn’t stop there

Lawsuits continued to fly thick and fast over the years. Platform emulation software makers were sued, as were those providing cheat systems such as the Game Genie. The most recent trend is to blame video games for the violence in modern society, highlighted by the tragic Columbine High School shooting incident, for which ‘Doom’ received a substantial amount of blame. In other cases games are used as a scapegoat for the irresponsibility of players which leads to their ill health and death, such as numerous incidents of gamers dying after marathon sessions of popular MMO’s.


Most gamers will probably recall the ‘Hot Coffee’ incident of GTA: San Andreas, in which a simple text file modification enabled a sex mini-game. Rockstar games was accused of fraud and of bamboozling the ESRB in order to gain a rating lower than ‘Adults Only 18+.’ A settlement has been reached in the case, and the details of the settlement were updated as recently as February 2010, which will see claimants receiving up to US$35 in compensation or a replacement disc with the ‘Hot coffee’ content removed.


Currently, the most interesting and impactful case pending is that between ex-Infinity Ward studio leads and Activision. Jason West and Vince Zampella are seeking royalties due from Activision as a result of the success of Modern Warfare 2, and rights to the Modern Warfare brand. The pair claim that Activison engaged in an elaborate scheme to dismiss them on the basis of ‘insubordination’ and ‘breach of fiduciary duty.’

Be sure to stay tuned to MyGaming for developments on this case, and why not discuss your opinions on video gaming lawsuits in the forums.

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The History of Video Game Lawsuits