Atari Sues Nestle Over 'Breakout' Kit Kat Ad

The vintage gamer says the unauthorized use will likely prevent it from legitimately partnering with other candy brands.
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Atari wants to break off a piece of Nestle's profits after the candy company allegedly used its intellectual property to sell Kit Kat bars, according to a lawsuit filed Thursday in California federal court.

The video game company says its Breakout game was used without permission as the basis for an ad campaign, and the complaint begins with a tech history lesson.

"In 1975, two little known but up-and-coming developers — Steve Jobs and Steve Wosniak — created Breakout for Atari, which was then looking to follow up on its groundbreaking hit game, Pong," writes attorney Keith Wesley in the complaint. "Forty years later Nestlé decided that it would, without Atari’s authorization, leverage Breakout and the special place it holds among nostalgic Baby Boomers, Generation X, and even today’s Millennial and post-Millennial 'gamers' in order to maximize the reach of worldwide, multi-platform advertisements for Nestlé KIT KAT bars."

The classic game is available across many modern platforms, and there's also a hidden version if a user searches Google Images for "Atari Breakout." Wesley argues Nestle's unauthorized use of the game's name and visual likeness hurt Atari's bottom line, which is bolstered by licensing revenues.

"Whether considered as the market for candy, chocolate, confectionaries, foodstuffs, or some similar market or sub-market, KIT KAT bars are sold in an enormous market featuring billions of dollars of annual advertising dollars," writes Wesley. "In one fell swoop, Nestlé has unilaterally eliminated Atari from these markets. ... "Atari can almost assuredly not license Asteroids, Centipede, or more than 200 other games to Hershey, Mars, or Nestlé’s other competitors, and it has likely been eliminated as potential licensor by scores of additional companies for all of its offerings."

Atari Interactive is suing Nestle for trademark and copyright infringement and unfair competition, among other claims. (The full complaint is posted below.)

Nestle sent The Hollywood Reporter a statement Friday in response to the lawsuit: "This is a U.K. TV advert that ran in 2016. The ad no longer runs and we have no current plans to re-run it. We are aware of the lawsuit in the U.S. and will defend ourselves strongly against these allegations."