Editing Pong (section)

===Lawsuit from Magnavox===
[[File:Magnavox-Odyssey-Console-Set.jpg|thumb|alt=Photograph of a dedicated video game console with two input devices connected to it with cables.|The [[Magnavox Odyssey]], invented by [[Ralph H. Baer]], inspired ''Pong''{{'}}s development.]]
In April 1974, Magnavox filed suit against Atari, Allied Leisure, [[Bally Midway]] and [[Chicago Coin|Chicago Dynamics]].<ref name="Magnavox Sues">{{cite news| title = Magnavox Sues Firms Making Video Games, Charges Infringement| newspaper = The Wall Street Journal| date = 17 April 1974}}</ref> Magnavox argued that Atari had infringed on Sanders Associates' patents relating to the concept of electronic ping-pong based on detailed records Ralph Baer kept of the Odyssey's design process dating back to 1966. Other documents included depositions from witnesses and a signed guest book that demonstrated Bushnell had played the Odyssey's table tennis game prior to releasing ''Pong''.<ref name="RB-How">{{cite web| url = https://www.ralphbaer.com/how_video_games.htm| title = Genesis: How the Home Video Games Industry Began| first = Ralph| last = Baer| publisher = R. H. Baer Consultants| year = 1998| access-date = 22 October 2008| archive-url = https://web.archive.org/web/20160424064425/https://www.ralphbaer.com/how_video_games.htm| archive-date = 24 April 2016| url-status = live| df = dmy-all}}</ref><ref name="Ultimate-Legal">{{cite book| title = Ultimate History of Video Games| first = Steven| last = Kent| pages = 45–48| chapter = And Then There Was Pong| publisher = Three Rivers Press| isbn = 0-7615-3643-4| year = 2001}}</ref> In response to claims that he saw the Odyssey, Bushnell later stated that, "The fact is that I absolutely did see the Odyssey game and I didn't think it was very clever."<ref>{{cite AV media | people = Nolan Bushnell | title = The Story of Computer Games | medium = video | publisher = [[Discovery Channel]] |date = 2003}}</ref>

After considering his options, Bushnell decided to settle with Magnavox out of court in June 1976. Bushnell's lawyer felt they could win; however, he estimated legal costs of US$1.5 million, which would have exceeded Atari's funds. Magnavox offered Atari an agreement to become a licensee for US$1.5 million payable in eight installments. In addition, Magnavox obtained the right to full information on Atari products publicly announced or released over the next year.<ref name="RB-How"/><ref name="Ultimate-Legal"/> Magnavox continued to pursue legal action against the other companies, and proceedings began shortly after Atari's settlement. The first case took place at the [[United States District Court for the Northern District of Illinois|district court]] in Chicago, with Judge John Grady presiding. Magnavox won the suit against the remaining defendants.<ref name="RB-How"/><ref name="Ultimate-Legal"/><ref name="Ultimate-CourtYr">{{cite book| title = Ultimate History of Video Games| first = Steven| last = Kent| page = 201| chapter = A Case of Two Gorillas| publisher = Three Rivers Press| isbn = 0-7615-3643-4| year = 2001}}</ref> Atari may have delayed the announcement of the [[Atari 2600]] by a few months to avoid disclosing information about the system under the settlement agreement.<ref name="Ultimate-Legal"/><ref name="atari fun chp5">{{cite book | title = Atari Inc: Business is Fun | first1 = Marty | last1 = Goldberg | first2 = Curt | last2 = Vendel | year = 2012 | isbn = 978-0985597405 | publisher = Sygyzy Press | chapter=Chapter 5 }}</ref>