Nestle defends 'Kit Kat' campaign against Atari 'Breakout' lawsuit

(Reuters) - Nestle SA on Friday paddled back claims in a new lawsuit in which Atari SA accused the Swiss food company of pilfering its classic 1970s video game "Breakout" to help sell Kit Kat chocolate-covered wafer bars.

Nestle damaged Atari's goodwill and reputation on Facebook, Twitter and television by exploiting the name, look and feel of "Breakout," it said in a copyright and trademark infringement complaint filed on Thursday in San Francisco,

Atari said Nestle and its U.S. and U.K. affiliates did this to whet the appetites of "nostalgic Baby Boomers, Generation X, and even today's Millennial and post-Millennial 'gamers.'"

A spokeswoman for Nestle UK said: "We are aware of the lawsuit in the U.S. and will defend ourselves strongly against these allegations."

Kit Kat was first manufactured in 1935.

"Breakout" was created by Apple co-founder Steve Wozniak with help from fellow co-founder Steve Jobs as a successor to "Pong," and requires a player to knock down rows of colored bricks with a paddle.

Nestle simply replaced the bricks with brown Kit Kat bars, used in a Kit Kate Bites commercial titled "Kit Kat: Breakout," showing adults and children using paddles to knock the bars down, according to Atari.

Atari said it "had to have been obvious" to Nestle that its "heist" of Atari intellectual property rights was illegal.

"Nestle has no excuse," Atari said.

The Kit Kat Bites ad ran only in the United Kingdom and no longer runs, the Nestles spokeswoman said.

Atari is seeking three times Nestle's profits from the alleged infringement, plus triple and punitive damages.

The case is Atari Interactive Inc v Nestle SA et al, U.S. District Court, Northern District of California, No. 17-04803.