CH71 - Magnavox

When Steve Jobs announced that Atari had obtained patent authorization for 'US3728480 A,' Ethan Jones felt a sudden clarity. All the inexplicable and bizarre behaviours were now connected! First and foremost was the negotiation months ago about "Snake Game."

As people were just beginning to explore electronic games, they had no understanding of the operation and presentation of electronic games. Most believed that Atari had merely copied Magnavox's work in the game "Pong" and were oblivious to the patent infringement of television games. Even if Magnavox and Atari were to engage in a lawsuit, people only knew that Atari couldn't release new games for a year. They were unaware that Atari had managed to acquire a patent monster during this stagnation. In this information blind spot, Ethan introduced the "Snake Game."

For Atari, this introduction was a pleasant surprise! Just when they were contemplating leaving the market, someone showed up with a game wanting to collaborate.

It was like a sign from the heavens!

Seeing the high quality of "Snake Game," Nolan Bushnell must have considered adding it to Atari's collection. Otherwise, why would Don Valentine propose a ninety-nine-year licensing contract during negotiations?

Initially, Ethan Jones thought Valentine and the others were making exorbitant demands, expecting him to foot the bill later. So, he pressured them at Stanford and reluctantly signed a one-year licensing contract.

But now... these guys seemed to be intentional!

Because the duration of the licensing had no meaning for them! They knew better than anyone that as long as Ethan Jones dared to sell "Snake Game," it would be an infringing product. If Ethan Jones was willing to entrust "Snake Game" to them, they would witness Ethan Jones being sued by Magnavox. At this point, the second step, which was currently unfolding, came into play.

When Magnavox sued Ethan Jones and Atari, the inevitably defeated Ethan Jones could only choose to settle by paying damages.

Because no one could win this lawsuit.

Ethan Jones admitting defeat and leaving the scene would be the best opportunity for Nolan Bushnell and Don Valentine. If they could shift all the responsibility for this infringement onto Ethan Jones, who had already acknowledged patent infringement, they could sue Ethan Jones as a victim and demand he bear all the losses from this infringement.

That would be an astronomical sum!

"Snake Game" had already sold close to ten thousand copies! Even if Atari generously allowed Ethan Jones to compensate for their losses, he couldn't afford it! In the situation where Ethan couldn't bear the exorbitant compensation, the third step, which Atari hoped for, would become inevitable.

If he couldn't pay, then use something else to settle the debt.

And what was the most valuable thing about Ethan Jones? Wasn't it "Snake Game"!

After a tug-of-war, the two sides would inevitably reach an out-of-court settlement. Atari reluctantly accepting "Snake Game" as compensation, and at the same time, they could use the payment to Magnavox as a way to offset all the previous earnings from releasing "Snake Game"!

After this whole operation, Ethan Jones could only leave regretfully, and Atari, with a mere million in compensation, would gain full copyright to "Snake Game." And this copyright... would bring them geometrically multiplied profits!

Honestly, when this speculation appeared before Ethan like a flash, what he wanted to do most was strangle Nolan Bushnell and Don Valentine. They had been eyeing his "Snake Game" from the beginning.

Damn it!

Of course, even if Ethan deduced the truth, he didn't act impulsively. So the next day, he found Barbara and shared the information he got from Jobs and his own speculations.

Barbara saw the complete picture, and at the same time, she asked, "Ethan, how do you want to handle this?"

"Barbara, please tell me, how can I handle this?" Ethan asked, seeking the mage's advice.

"Well..."

Barbara pondered for a moment, "Ethan, although we have deduced the entire process of the event, these details have no factual basis. It only helps us understand what Atari is pursuing."

"If we follow the normal legal process, you will still lose, and you will still have to compensate. However, after knowing the truth, you won't be paying in confusion but with some preparation."

"I think you should understand what I mean, right?"

Barbara looked at Ethan with a serious expression.

"Yeah!" Ethan nodded with a smile. "I understand. So, we can't go through the normal legal process, right?"

"..."

This question made Barbara pause for a moment.

Then, she showed a somewhat helpless expression, "Oh, Ethan, I am a lawyer, and more importantly, a teacher. In this situation, you're asking me if we can solve legal problems with illegal means? This is just..."

"Can you answer me a few questions then?"

Ethan knew what Barbara was struggling with, so he rephrased the question, "A few legal questions."

"That's possible." Barbara nodded readily. "So, what aspect do you want to know?"

Seemingly resigned to the situation, Barbara even made a joke—

"Like, what crime is it to illegally invade someone's private residence and shoot them in the head?"

"Or how many years is the maximum sentence for shooting someone dead in the street with a gun?"

"Or does surrendering after committing a series of murders make the judge consider reducing the sentence?"

"Haha..." Barbara's analogy almost made Ethan burst into laughter. "Oh, Barbara! Do I look like that kind of lunatic to you?"

"Of course!"

Barbara also replied with a smile, "Forgive me for being blunt, but I can't think of any legal way to solve this situation."

Ethan agreed with Barbara's words because the normal way could no longer solve these problems. However, at the same time, he was aware that besides legal channels, there was another form of attack in this world called law.

When these guys abandoned fair play, he had to resort to what his father used to say—'Law must defeat Law.'

Thinking about this, Ethan's smile became even broader. He sat up straight and asked, "Barbara, the first question, I want to know after Magnavox sues me, can Magnavox withdraw the lawsuit before I submit a defence, and if so, can Magnavox withdraw the lawsuit?"

...

Sidley Austin has two offices in California, one in San Francisco and one in Los Angeles.

When Ethan entered 555 California Street, Suite 2000 in San Francisco, the two lawyers who had delivered the legal letter greeted him with smiles.

After inviting Ethan into his office, they poured him a cup of ginseng tea. Then, with a smile, they sat down and spoke in friendly tones. As the soft sofa sank into a subtle curve, the cordial conversation emerged.

"Mr. Jones, it's a pleasure to see you again. Although we just spoke with you on the phone, we can't believe our ears, so we want to confirm with you again. Do you want our client, Magnavox, to withdraw the lawsuit? And to achieve this, are you willing to accept all the compensation mentioned in the complaint, namely, compensate our client Magnavox with one million dollars, and promise not to sell 'Snake Game' in the United States through television games, correct?"

"Well... let's go fifty-fifty."

Ethan Jones, now

in a suit and tie, smiled, "As long as your client Magnavox agrees to withdraw the lawsuit, I, Ethan Jones, and my sister, Evelyn Johnson, are willing to compensate your client with one million dollars."

"As for the promise of not selling... I believe your client Magnavox wouldn't even write that in the settlement agreement."

...

"Of course!"

Barbara nodded, smiling, and said, "According to our country's legal provisions, after the plaintiff initiates a lawsuit in court, the plaintiff can withdraw the lawsuit before the defendant submits a defence. However, they need to submit a voluntary motion to withdraw the lawsuit to the court."

"Of course, if the plaintiff chooses to withdraw, then all the costs incurred between the filing and withdrawal will be borne by the plaintiff."

"However, in practice, if the defendant and the plaintiff reach an agreement and want to quickly resolve the issue, the costs borne by the plaintiff will ultimately be shifted to the defendant."

After answering this question, Barbara's face showed curiosity. "Ethan, why are you asking this question?"

"Because I'm planning to settle with Magnavox," Ethan smiled.

"?" Barbara looked puzzled, "Why?"

"How do you know Magnavox is willing to settle?"