In 1978 Magnavox introduced the Odyssey 2 which had a microprocessor which traced its roots to the …507 patent filed by Sanders Associates granted in 1967/68. In 1979 Mattel introduced the Intellivision with a General Instruments microprocessor. Magnavox had previously successfully sued Atari (over Atari’s Pong console)for patent violation. Atari settled by becoming a Magnavox exclusive licensee. With that confidently behind them, Magnavox sued Mattel for patent violation over Mattel’s introduction of the Intellivision. Mattel’s defence was that its console was not based on ‘507 but on the computer prior art, Space War!, the 1962 game played on a DEC PDP-1 mainframe at MIT. The court found for Magnavox …it is clear from the evidence that Mattel did not in fact follow the prior art but, instead, followed developments in the television game industry, an industry which was created because of the work done at Sanders in developing the first television games and an industry which expanded and developed and become economically viable largely because of television games which followed the teachings of the ‘507 Patent.
Source Links:
videogamelaw.allard.ubc.ca/2014/08/01/the-evolution-of-gaming-magnavox-v-mattel/
web.archive.org/web/20210529130444/patentimages.storage.googleapis.com/33/ca/29/8a30a03aa0b9f6/USRE28507.pdf
archive.org/details/1982-07-07-magnavox-v-mattel-trial-transcript-903-1029/mode/2up