How Target Re-Imagined Video Game, Pong, In Stores...
...And How Atari Sued Them For Trademark & Copyright Infringements
They say imitation is the sincerest form of flattery.
By all accounts, Target was paying homage to one of the greatest video games of all time when it rolled out “Foot Pong” at several local stores. Instead, its virtualized projection on store floors allowing kids to use their feet to kick the pixelated ball recently incurred a trademark and copyright infringement lawsuit from fading video game giant, Atari Interactive, reflecting the dangerous synergies between software innovation and intellectual property protection for inventors.
The Birth of Pong
When Pong was released decades ago it distinguished itself as the first commercially successful video game and helped forever etch Atari into the iconic stratosphere of pioneering software development companies. One of the simplest and most elegant games ever invented, it has endured as a symbol of entrepreneurial and technological innovation, building on earlier work by rival Magnavox Odyssey which would later sue Atari for patent infringement.
The two-dimensional game based on table tennis (or ping pong) echoes the early days of Silicon Days when Moore’s Law was still in its infancy and software developers like Allan Alcorn - also an electrical engineer - had to use ingenious ways to extract performance and creativity from limited transistor logic displays found in television sets and in later years, home console gaming devices.
The launch of the game in arcade parlors across the United States, brought an early financial windfall to Atari. However, Alcorn, along with the founders Nolan Bushnell and Ted Dabney, did not patent the solid state technology which would ultimately lead to an army of Pong clones invading the marketplace.
Press Play: The Rise of Video Games
Nevertheless, Pong is universally credited for launching the video game industry and continues to hold sentimental value for those old enough to remember it and a new generation of kids who savor its vintage simplicity. It also recently regained the limelight when Google announced it had used the game to advance its machine learning algorithms that would eventually go on to beat the world’s best players in chess and the Chinese game, Go.
It’s for this reason that Target’s design and marketing teams rolled out a new virtual incantation of the game at 40 of its stores in and around the children’s clothing and shoes section. Using a ceiling projector, the ingenious contraption displayed an interactive Pong projection on the floor for kids and parents to hit the ball back and forth with their feet.
Two vertical lines on the far side of each court are shuffled by the player’s feet to volley the ball back to the opponent, approximating the way the game is played on a video console. If the player misses the ball, it disappears. A scoreboard at the top of the virtual screen tabulates points during the game.
It’s a clever idea showing us the infinite ways original, older ideas may be re-crafted, re-expressed or repurposed in the software age. (For an inverse example, read Unlocking The Secrets of the Cube For Inventors, which shows how the vintage toy, Rubik’s Cube, is being re-imagined for puzzle solving as a smart cloud-connected speed cube.)
Unfortunately, Target’s product development team did not fully consult with a software patent & trademark attorney prior to launch, drawing the attention of Atari’s intellectual property team. In a multi-pronged law suit, Atari claims that Target willfully violated trademarks and copyrights diluting the brand equity of Pong and its value to the Atari product line.
While a cease and desist letter was submitted to Target, the powerful retail brand confirmed it would not retract the Pong projectors from its stores setting up an intriguing legal battle.
Video Game Company
"Target has made substantial sales and profits and Atari has been damaged and deprived of substantial sales and profits, as well as of the value of its trademarks as commercial assets," said Atari.
The Case For Atari
Ultimately, Atari is seeking over $2 million in damages from Target claiming the store never sought permission to use the trademarks and copyrights in its limited store rollout.
Many would argue that Atari is a spent force in video game development and unnecessarily seeking damages for a game that no longer has the presence it once did. It also recently brought a trademark and copyright infringement suit against Nestle for a Kit Kat advertising campaign that includes elements of Atari’s Breakout video game.
Yet these allegations may be a bit unfair considering recent additions to its intellectual property portfolio including Rollercoaster Tycoon® Touch™, a result of its partnership with Theme park operator, Six Flags®.
The patented and trademarked mobile application is described as the “most authentic and popular theme park simulation series available” and joins a list of over 200 games developed by the interactive entertainment company including vintage favorites like Asteroids®, Centipede®, and Missile Command®.
From my perspective, the drama unfolding between Target and Atari is also reflective of the poor understanding many small, independent inventors have regarding trademarks and copyrights, including the differences between the two. Further confusion arises when bringing a patent definition into play, which is one of several reasons why I created one of the largest educational animation libraries on intellectual property in my YouTube patenting channel.
These three videos below will introduce you to the concept of trademarks. More videos are available inside my growing YouTube Educational Video Library For Inventors.
A trademark protects a brand, broadly encompassing the name, symbols, words, phrases, designs and logos from competitors who may wish to convert your brand value into commercial profits.
The federally registered trademark confirms the source of goods and services comes from YOU, the inventor and no other entity. Unlike a patent which expires after 20 years ownership, a trademark can exist in the marketplace forever. However, the inventor must maintain annual documentation and filing fees. Competitors know your software product is trademarked because of the ® symbol after your mark. If it has not yet been registered, you can also use what is known as the “common law” trademark which has this ™ symbol.
The duration and scope of a copyright differs from a trademark. It protects original works of authors, including books, movie or a song. It may also cover software hence its application in the Atari lawsuit against Target. As a general rule, a copyright may last as long as 70 years although other factors come into play when considering the final duration.
The United States Patent Office will grant an inventor up to 20 years of exclusive ownership rights for inventions that include machines, manufactured articles, industrial processes, software systems (and processes), and chemical compositions. The duration of patent protection depends on the type of patent granted including design or utility patents. Both large and small companies value patents since they help distinguish product value from competitors and ensure copycats have a hard time stealing your idea while in the prototyping, launch, or marketing phase. For some insight into the biggest patent law change in recent history, please listen to this recent radio interview.
Leveraging Intellectual Property
Both large and small companies should vigorously enforce and protect their intellectual property since it confirms to the general consumer that they are receiving a genuine product that’s laden with advantageous utility or design features - and not a cheap knockoff of an existing product.
Even though Atari failed to procure a patent for their breakthrough game, Pong, they did take the initiative in securing trademarks and copyrights to offset the risk of clones in the marketplace and limit the damage of similar product competition.
What Levi's® Can Teach Us About Trademarks In Product Differentiation
Another famous example of this rearguard action can be seen in recent case study on my site, How The Immortal Blue Jeans Patent Launched an Apparel Empire.
While Levi’s® did successfully patent their riveted jeans in the early 20th Century, the company eventually felt the impact of copycats as the patent expired. They lamented that "they all have a leather patch on the waistband and pocket stitching that’s suspiciously similar to our Arcuate stitching design.”
To combat this, they introduced a folded cloth ribbon in the structural seam of a rear patch pocket with the word LEVI’S® appearing on a small, rectangular red ribbon (or tab) that was sewn onto the right back pocket of the 501® jeans.
This trademarked symbol gave the apparel giant a marketing edge both of terms of intellectual property and product differentiation even as the market became increasingly crowded with imitators.
While Atari may on the surface be scratching for financial recompense through trademark infringement, copyright infringement, counterfeiting, false designation of origin, trademark and trade dress dilution, and common law unfair competition, a closer look may suggest a more far-reaching strategy and goal: A licensing agreement.
While Target has more or less stated it does not intend rolling out the virtual game to more than 40 stores in a limited release, Atari may be hoping that the retail giant has grander national visions for a video game indelibly stamped on the national psyche.
A negotiated licensed agreement would ensure future profits and help it enforce similar licensing models with other IP violators of its video games.
It would also show a remarkable similarity to the settlement case that Magnavox Odyssey extracted from Atari decades earlier when it brought patent infringement charges against the Pong inventor. In that instance, Odyssey demanded $700,000 in licensing fees from Atari that would extend to other clone operators/imitators of the Pong game.
What all software inventors should learn from the case is the ultimate importance of patents, trademarks and copyrights in ensuring smooth commercial operations in the marketplace.
While Atari initially paid a steep financial price for transgressing the patent owned by Magnavox, it also lost financial earnings as Pong clones entered the marketplace without fear of IP retribution.
Later, while its prowess for developing world-class video games dwindled, it became astute at litigating its federally-protected trademarks using its previous experience with Magnavox to more aggressively protect its intellectual property.
Conversely, Target continues to be a trendsetter in the retail space.
It’s deployment of the “Foot Pong” virtual game shows its canniness for asymmetrical marketing and delivering customer delight. The jury is still out as to whether its novel approach will win a court dismissal or whether Atari will prevail on all fronts.
But one thing is certain: The law suit will remind Target and its development teams thats software innovation must be carefully aligned with intellectual property protection or otherwise risk the consequences of a lengthy and costly legal battle.
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We’ll Protect your Brand but Your Hair Needs GRACE BY G®
When Giselle Fermin (seen above) approached me to trademark her newly conceived natural haircare product line, GRACE BY G®, she signaled her intent to turn her part-time business venture into a powerful brand that could help women of all ages achieve healthy, lustrous and strong hair in a market expected to reach a $105 billion valuation by the year 2024
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