Maybe, but I personally doubt that Atari would have won in court. While I haven't studied it in detail, my understanding is that in the case (Magnavox vs. Chicago Dynamic Industries et al), Judge Grady ruled that the "507" patent (Baer and Magnavox had a number of them - the 507 patent was actually Bill Rusch's patent, not Ralph Baer's) covered a player hitting a moving spot on the screen and causing to change direction, which is pretty broad.
A key matter was the meaning of the term "distinct motion" in the patent. One of the defense's arguments was that this meant "predictable" motion (I'm not sure, but I think there were referring to the fact that in the patent, the motion of the ball after hitting the paddle depended on where on the paddle it hit) and that because, in their games the motion of the ball after hitting the paddle couldn't be predicted, the patent didn't cover them. Grady ruled that "distinct motion" merely meant that the motion was different after it hit the paddle.
The judge also called Baer's 480 patent the "pioneer patent" in the industry and that it was broad enough to cover much more than just Pong games.
Then there's the fact that Magnavox had hard evidence of Bushnell having seen the Odyssey at that product demo (he'd signed the guest register, which Baer had kept).
Grady had this to say about Bushnell
" Here again Mr. Bushnell and his associates were highly sophisticated people in the electronic field, and they even had a little bit of experience in a sub-art, games and machines of that kind. Yet there is no real evidence which I find persuasive that Mr. Bushnell had conceived of anything like the Pong game prior to the time that he saw the Odyssey game. When he did see the Odyssey game, what he did basically was to copy it."
According to Baer, Bushnell later admitted in court that Pong had been inspired by what he saw at the demo, but that after the licensing deal he (Baer) was told by his lawyers to avoid mentioning this. Of course, Baer may be blowing smoke but I think his story has been confirmed by others (and while Baer is obviouisly, and justifiably, angry about the whole thing, I don't think he's making this up out of whole cloth).
Also according to Baer Bushnell met with Tom Briody, Magnavox's chief patent counsel, before the trial started and was "anxious" for settlement and felt that the "Magnavox's [licensing] umbrella could help keep out the pirates" (quote from Baer's book Videogames: In the Beginning)
Baer also claims that by 1980, Atari had paid Magnavox over $3 million in royalties for a number ofcoin-op games and cartridges.
Bushnell's claims about Baer (if he made them) may be true, but given his propensity to, shall we say, stretch the truth, I doubt it.
Of course, it's possible that had they gone to trial, Atari's lawyers could have come up with a more persuasive argument and won the case, but again I'm doubtful.
Keith Smith
http://allincolorforaquarter.blogspot.com/