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Atari v coleco lawsuit


Rudy

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From http://mcurrent.name/atarihistory/wci_games.html

 

December 8, 1982: Atari announced that it had filed suit in U.S. District Court, Northern District of Illinois, Eastern Division against Coleco Industries, charging patent infringement and unfair competition under State and Federal law. Atari's lawsuit sought a preliminary and permanent injunction against the manufacture and sale of Coleco's Expansion Module No. 1 which was intended to allow Atari's VCS compatible cartridges to be played on the Colecovision home video game unit. Atari claimed that the Coleco cartridge adapter infringed two basic video game patents held by Atari--U.S. Patent No. 4,112,422 covering motion objects commonly referred to as players, missiles or sprites and U.S. Patent No. 4,314,236 relating to digital generation of sound and noise especially suitable to video games. Coleco said it would file a counterclaim charging violations of antitrust law by Atari.

 

March 11, 1983: Atari Inc. and Coleco Industries announced they had settled their December 1982 lawsuits against each other. Under their settlement, the companies said Coleco could continue making and selling its ColecoVision Expansion Module No. 1 and also could ship its planned Atari 2600-compatible Gemini Video Game System. However, Coleco would do so as a licensee of Atari's patents, and would pay a royalty to Atari.

 

This is probably why there was no order I could find. The case settled without being decided. But everyone I found commenting on this said there was a court order giving Coleco a decisive victory because it was possible to build a VCS with off the shelf parts and therefore there were no patents violated. Odd.

 

Here's one of the Atari patents: http://en.wikipedia.org/wiki/POKEY

Edited by Rudy
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2600 couldn't be built with off-the-shelf parts, although TIA is the only proprietary chip in the machine.

 

The Coleco effort is a workalike, really not much different from MOS offering the 6502 as a 6800 workalike/alternative - it was developed to function the same but was built from the ground up. Although of course since ex-Motorola engineers worked on the 6500 series it could be argued that design elements were directly duplicated.

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I've searched for this case in the Northern District of Illinois where it was reported by contemporary newspaper articles to be filed. I searched under the names of the companies ("Atari" and "Coleco") in that district, and under the two Atari patents claimed to be violated. No order came up. But I'm not finished; I can use the patent numbers to see if anyone put the complaint online, which could be useful to tell us a lot about what happened in the case. And why do people think that Coleco won the case when the information I'm getting is that the case settled? I'm not done with this yet.

 

I searched in the 7th circuit also, nothing. I found plenty of Atari cases, none against Coleco. Could the court order everyone is talking about be vapor?

Edited by Rudy
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2600 couldn't be built with off-the-shelf parts, although TIA is the only proprietary chip in the machine.

 

The Coleco effort is a workalike, really not much different from MOS offering the 6502 as a 6800 workalike/alternative - it was developed to function the same but was built from the ground up. Although of course since ex-Motorola engineers worked on the 6500 series it could be argued that design elements were directly duplicated.

Which is why if there is a court opinion I'd like to see it so I see exactly what was going on. The online descriptions seem too simplistic.

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why do people think that Coleco won the case when the information I'm getting is that the case settled?

 

People assume that Coleco "won" because the Gemini and Expansion #1 remained on the market. Just like a lot of people used to assume that Atari "won" against Magnavox, even though they ended up paying royalties for a long time, if I recall correctly. The average person's understanding of law, especially IP law, is shaky at best (myself included).

 

I always suspected there was more going on, especially given that the TIA wasn't off-the-shelf as mentioned above. But you're right, pretty much *everyone* claims that Atari "lost". What I find interesting is that I don't recall any mention of clean-room reverse engineering ever being mentioned, like in the Compaq case. Which is why I've always thought that there had to be a patent royalty involved. The 2 patents mentioned probably aren't as broad as they sound (they didn't used to issue ridiculously broad patents back then) and are likely very specific to the TIA implementation. If I had to guess, anyway.

 

One thing I'm extremely nostalgic for, when it comes to consoles - we'll never, EVER see this sort of thing again. Can you imagine someone coming up with a hardware or software implementation of a competitor's console? Current or previous gen? Bleem was the last anyone even attempted, and they got sued into oblivion (effectively). I'd love it. For the first time in my entire gaming history I'm actually pissed that backwards compatibility isn't present in the current gen. I never cared before, but right now there are still so many 360/ps3 games that I want to play. I won't be changing consoles for a few years at this rate, but if someone made a ps3 unit for a current gen console, I'd be all over it.

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People assume that Coleco "won" because the Gemini and Expansion #1 remained on the market. Just like a lot of people used to assume that Atari "won" against Magnavox, even though they ended up paying royalties for a long time, if I recall correctly. The average person's understanding of law, especially IP law, is shaky at best (myself included).

 

I always suspected there was more going on, especially given that the TIA wasn't off-the-shelf as mentioned above. But you're right, pretty much *everyone* claims that Atari "lost". What I find interesting is that I don't recall any mention of clean-room reverse engineering ever being mentioned, like in the Compaq case. Which is why I've always thought that there had to be a patent royalty involved. The 2 patents mentioned probably aren't as broad as they sound (they didn't used to issue ridiculously broad patents back then) and are likely very specific to the TIA implementation. If I had to guess, anyway.

 

One thing I'm extremely nostalgic for, when it comes to consoles - we'll never, EVER see this sort of thing again. Can you imagine someone coming up with a hardware or software implementation of a competitor's console? Current or previous gen? Bleem was the last anyone even attempted, and they got sued into oblivion (effectively). I'd love it. For the first time in my entire gaming history I'm actually pissed that backwards compatibility isn't present in the current gen. I never cared before, but right now there are still so many 360/ps3 games that I want to play. I won't be changing consoles for a few years at this rate, but if someone made a ps3 unit for a current gen console, I'd be all over it.

 

The funny thing is even Wikipedia reports that Coleco won and cites the off the shelf argument, without citing anything. It sounds like this could be a case of bad information taken as truth. I'm confident the court opinion is vapor unless it was a district court opinion that wasn't appealed. But that doesn't explain the report that the case settled.

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Here's the death knell to there being a mystery court order I couldn't find.

 

http://www.nytimes.com/1983/03/12/business/company-news-atari-coleco-pact.html

 

NY Times

COMPANY NEWS; Atari-Coleco Pact
Published: March 12, 1983

Warner Communications Inc., its Atari Inc. unit and Coleco Industries said they had settled all issues that were the subject of litigation. Under the agreement, Coleco has become licensed on a royalty basis under Atari's patents to continue making and selling the Expansion Module No.1 for the Colecovision video game system and the free-standing Gemini video game system.

 

It's amazing all of this information is available online, and it's even more amazing that it appears that the traditional narrative of how the case went down is completely wrong!

 

Edit: wait : we have a change of fortune!

 

http://www.colecoworld.com/expansion_module1.html

EXPANSION MODULE #1 - ATARI 2600 ADAPTOR:

This expansion module allowed Colecovision owners to play all Atari 2600 cartridges. A great marketing strategy, this allowed Coleco to tap in to the Atari user base and also gave them a game library larger than any other gaming system. Atari of course, promptly sued Coleco for $350 million in December of '82, claiming Coleco ripped off propriertary designs to make their compatible expansion module. Coleco countered with a $500 million anti-trust lawsuit that claimed Atari was trying to discourage retailers carrying Atari products from also carrying Coleco. They also charged that Atari created an unfair advantage in the industry when it bought part of Pac-man inventor Namco, and that it violated anti-trust laws as well. Atari's claims remained unproven and dismissed, and both sets of charges were settled out of court by April 1983 when Coleco agreed to pay royalties. Not all cartridges fit properly in to the module, so Coleco provided an adaptor to anyone that wrote to the company to complain.
Source: gamingmuseum

 

So Atari's case was thrown out of court before the settlement. That's the order everyone is referring to. I need to find that but without the docket number of the case it's going to be hard. It must be a district court order that didn't get reported and which was not appealed because of the settlement.

Edited by Rudy
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Interesting. I don't think I've ever heard of, nor seen this adapter. Unless I'm just having a brain fart.

I have one. I use it instead of a VCS. I was surprised it worked because I remember it was tempermental back in the 1980s. There's a slot in the front of the CV that it fits into. It turned out to be the only released hardware by Coleco that uses it (although homebrew hardware called the SGM would use it later).

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I meant this part:

 

 

I didn't realize there was a size issue with Expansion #1.

 

Yep, some cartridges enter too hard in the Expansion 1, I've broke a Taiwanese cart 32-in-1 this way.

 

Although same happens with the Atari 2600 Jr in another style, the M-Network cartridges easily pop out.

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I've searched for this case in the Northern District of Illinois where it was reported by contemporary newspaper articles to be filed. I searched under the names of the companies ("Atari" and "Coleco") in that district, and under the two Atari patents claimed to be violated. No order came up. [...]

 

I searched in the 7th circuit also, nothing. I found plenty of Atari cases, none against Coleco. Could the court order everyone is talking about be vapor?

 

Are you searching the reported decisions on Westlaw. Only a very small fraction of civil litigation ever results in a published opinion, especially from the trial court level.

 

I don't have access to PACER; does it cover material from as far back as the 1980s?

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Are you searching the reported decisions on Westlaw. Only a very small fraction of civil litigation ever results in a published opinion, especially from the trial court level.

 

I don't have access to PACER; does it cover material from as far back as the 1980s?

PACER is a good idea but I don't have the case docket number. I'd like to find that before I tried PACER because they charge you per page so if your result is 300 pages because you searched by litigation parties you could have to pay $30 or whatever. Also I'm not sure what the parties are styled as, Atari could be "Warner Entertainment" or whatever.

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Unrelated, but fascinating reading. Video games are apparently older than I thought:

 

http://ipmall.info/hosted_resources/Activision_Litigation_Documents/09-12-84_to_12-06-84/Pretrial_Statement_Disputed_Issues_13Dec84.pdf

 

Not quite, you're taking that out of context. Those are simply claims being submitted to try and show prior work and they proven false claims, as they were disproven in relation to actual "video games" (which is a term that was literally a technical descriptive, i.e. describing the technology involved). Activision lost the suit, as did everyone else that tried to claim prior work with these games in an attempt invalidate Baer's patents (which is what the suits were about) over three decades.

 

You can't do research on stuff like that applying the modern pop-culture definition of video game ("anything electronic with a display") in hindsight, it causes a big mess and all sorts of confusion. The term literally rose from being descriptive of the process: Video refers to a raster display method and television by definition, or "relating to the transmission or reception of a televised image" or "the technology of electronically capturing, recording, processing, storing, transmitting, and reconstructing a sequence of still images representing scenes in motion." Or as Webster's defines it - "video (adjective): being, relating to, or used in the transmission or reception of the television image" and "being, relating to, or involving images on a television screen or computer display", (meaning computer displays using the same raster or pixel process). A video signal represents an encoding of a picture and the subsequent transmission process of pixels (i.e. raster) to reproduce that still image. The confusion in this case arises that both raster and vector use a CRT, however a CRT does not imply display method or a transmission signal. A vector driven CRT is not a video display - there is no video signal present, nor signal decoding to generate an image. Rather instead it uses a direct control of the CRT's beam by the computer or electronic device (in the case of an oscilloscope) to generate images like an etch-a-sketch, or what is traditionally called an XY Monitor or "Random Scan" display. Baer and company's patents were specifically in relation to tapping in to a television or video/raster display in conjunction with custom outside circuitry for the purposes of playing a game. Something that's so obvious and common now, but at the time was very unique. How do you generate your own non-broadcast pixel on the screen and directly manipulate then and there for a game? It's a question and process that all the later companies and their efforts expanded on later, hence the suits to try and not have to pay royalties.

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Not quite, you're taking that out of context. Those are simply claims being submitted to try and show prior work and they proven false claims, as they were disproven in relation to actual "video games" (which is a term that was literally a technical descriptive, i.e. describing the technology involved). Activision lost the suit, as did everyone else that tried to claim prior work with these games in an attempt invalidate Baer's patents (which is what the suits were about) over three decades.

I admit I didn't read the whole thing or have any familiarity with the litigation. I just thought it was cool someone was apparently doing some sort of electronic game in the 50s.

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I admit I didn't read the whole thing or have any familiarity with the litigation. I just thought it was cool someone was apparently doing some sort of electronic game in the 50s.

 

Yes, that's pretty much when electronic gaming started. Computer labs of the early 50s onwards. People try and point towards Goldmisth Jr. and Mann's "CRT Amusement Device" from 1947. But that's simply an EM (electro-mechanical game, i.e. pinball) that uses the CRT as a prop. I.E. it could have just as easily used a bed sheet and a flashlight, as the entire game is in the EM components.

 

Are you doing research for fun, or is this for a project?

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Yes, that's pretty much when electronic gaming started. Computer labs of the early 50s onwards. People try and point towards Goldmisth Jr. and Mann's "CRT Amusement Device" from 1947. But that's simply an EM (electro-mechanical game, i.e. pinball) that uses the CRT as a prop. I.E. it could have just as easily used a bed sheet and a flashlight, as the entire game is in the EM components.

 

Are you doing research for fun, or is this for a project?

Eventually I'd like to do an essay on legal ip issues in electronic gaming, but I'm far away from that. I figure figuring what happened with the coleco-Atari expansion module 1 lawsuit is a good place to start

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RR, that was a great description of vector vs raster, and exactly why Video Games are not Oscilloscope Games. Vectrex aside.

 

Rudy, Atari-Coleco is a good one, plus Atari-Magnavox, the GameGenie decision, Activision, Tengen (and by extension the whole morass surrounding Tetris), and a few other biggies come to mind.

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As far as the topic, the reason most online sources were poor about is most websites and such are like playing a bad game of the telephone game. Someone way back started with a kernel of truth which was passed on and continued to morph into the ridiculous story that gets tossed around now. That colecoworld story is one such example, and certainly not a change in fortune, unless you count made up stories good fortune. ;) For instance, Atari never bought part of NAMCO (rather NAMCO had bought Atari Japan back in the early 70s to form their video game division). Such is also the case, as someone mentioned, with the "off the shelf parts" claim on fansites

 

We researched the story pretty thoroughly for our book, plus I'm friends with one of the Atari employees who built the exhibits for the trial (still has a bunch of them with the original court stickers on them), Jerry Jessop. Basically, Warner and Atari saw it more profitable to license to Coleco and make money off the sale of every one of it's 2600 adaptors and Gemini. Patent cases are very very comprehensive and complex (Curt and I have most of the testimony and paperwork from the bulk of the Magnavox vs. trials for instance and the depths both sides go to establishes nuances are insane) so there's no telling which way a judge or jury will go. Jerry felt they would have won had it continued on.

 

BTW, the POKEY has nothing to do with the 2600.

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It appears that I was relying on bad information then. I'm satisfied that there was no court order. Why would coleco have settled if they'd gotten atari's claims dismissed? The only good source of information appears to be the news articles which clearly state the case settled.

Edited by Rudy
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Eventually I'd like to do an essay on legal ip issues in electronic gaming, but I'm far away from that. I figure figuring what happened with the coleco-Atari expansion module 1 lawsuit is a good place to start

 

Main Author: Festinger, Jonathan B.

Title: Video game law / Jon Festinger, Chris Metcalfe, Roch Ripley ; with a foreword by Don A. Mattrick.

Edition: 2nd ed.

Publisher: Markham, Ont.: LexisNexis, 2012.

 

This is a Canadian text, but there is a detailed review of the law in the Unted States, and some coverage for Europe and Japan. I assume that there are equivalent American texts, but my library does not hold any.

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Even as a ColecoVision fan, I really don't think Coleco should have been allowed to get away with this.

 

And Coleco's claim about Atari's deal with Namco being unfair is nonsense. Especially considering that Atari and Namco had a working relationship (and that Namco used to be Atari's Japanese division).

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