Tuesday, June 16, 2015

Atari Depositions Part 7

Here is the last half Nolan Bushnell's July 3, 1974. Deposition. Kind of dry I know but think some of the others will be more interesting.

MR. HERBERT: As I understand it it's a paper you signed for the auditors?

THE WITNESS: Yes, it was just an internal memorandum that the auditors like so as to have the ends tied up.

MR. ANDERSON: Q. Ross deposition Exhibit 3 calls for monthly payments of four thousand dollars for a period of six months in paragraph 2 under consideration -- excuse me, paragraph 1 under consideration. Were those sums paid, do you know?

A. Yes they were.

Q. To whom were they paid?

A. To Nolan Bushnell.

Q. And did Nolan Bushnell transfer them to Atari, Inc.?

A. Yes I did.

Q. Was that true of all the six payments, do you know?

A. Yes.

Q. Did Bally ever accept a game that you submitted to them pursuant to the Royalty Agreement, Ross deposition Exhibit 3?

A. Yes they did.

Q. What game di they accept or games?

A. It was the Asteroid game.

Q. Did they make and sell the Asteroid game, do you know?

A. Yes they did.

MR. WELSH: You may want to clarify here whether he means Bally or some subsidiary of Bally.

THE WITNESS: Midway did.

MR. WALSH: You asked the question Bally and he answered yes.

MR. ANDERSON: Q. Do you know whether it was in fact Bally that made Asteroid or--

A. Bally did not make Asteroid.

Q. I gather from what you said Midway did make Asteroid?

A. Yes.

Q. So that when you answered my question with respect to Bally you were either thinking of or referring to Midway?

A. That's correct.

Q. When Bally accepted and made Asteroid and sold it, or Midway, did Midway at any time report to you with respect to the manufacture of Asteroid?

A. No.

Q. Did Bally or Midway at any time report to you any sales of games which they accepted from you pursuant to Paragraph 2 at the bottom of the first page of Ross deposition 3?

A. No.

Q. Did you or Atari call upon Bally or Midway to report with respect to games which they accepted and sold pursuant to this Royalty Agreement, Ross deposition Exhibit 3?

A. No.

Q. You have testified that they did accept a game that you made and sell it. Was there some reason that Atari did not call upon Midway or Bally to report pursuant to Paragraph 2 at the bottom of the first page of Ross deposition Exhibit 3?

MR. WELSH: So the record is clearer who do you mean by "they" in the beginning of your question?

MR. ANDERSON: By "they" I mean Midway or Bally.


MR. ANDERSON: Now my question is--I guess you better read the who question and just think Midway or Bally when I said "they".

(Pending question read by reporter.)

THE WITNESS: The answer is yes and it was Midway.

MR. ANDERSON: Q. Is there a reason that you did not call upon Midway to report the production of a game which they accepted and made and sold?

A. Yes.

Q. What is the reason?

A. I didn't feel that the numbers made represented sums in excess of the advance and therefore I felt that it was unnecessary.

Q. And you never asked for an accounting to establish whether that was true or false?

A. No I did not.

Q. Did you ever discuss with Midway or Bally any patent rights which you might have had on video machines?

A. Yes.

Q. Did you ever discuss granting them any rights under patents which you might have had on video machines?

A. Not as part of any current existing contract or obligation.

Q. In any other context did you discuss your patent rights on video machines with Bally or Midway?

A. Yes.

Q. In what context did you discuss there?

A. I discussed with them that we did have several patents pending, that we would cover that under separate arrangements if and when those patents were finalized.

Q. When did that discussion occur?

A. At the time the other discussions were in progress.

Q. In early '72, March or April of '72?

A. Yes.

Q. Did you ever have these subsequent discussions that you referred to that you would have after the patents issued?

A. Yes.

Q. When did you have that subsequent discussion?

A. It was probably March of this year.

Q. Were you personally involved in that discussion?

A. Yes I was.

Q. Was anyone else from Atari involved?

A. No.

Q. With whom did you have that discussion?

A. With the counsel of Bally.

Q. Who was that, do you know?

A. I can't remember.

Q. Mr. Tomlinson?

A. Mr. Tomlinson.

Q. Anyone else at Midway or Bally that was involved in those discussions?

A. Yes, Mr. Ross at Midway.

Q. Anyone else?

A. No.

Q. Did this discussion occur in Chicago--

A. Yes it did.

Q. --or the Chicago area? Did that discussion involve your patent 3,793,483?

MR. HERBERT: I will have to object here again. We are going well beyond the area of venue. Licensing or negotiations for licensing of Atari patents doesn't have anything to do with venue in a patent infringement suit based upon Magnavox patent, and in view of that fact it is so far beyond the area of venue I instruct witness not to answer.

MR. ANDERSON: Well, as you well know, Mr. Herbert, one act of infringement is an inducement for someone else to infringe and we certainly think this goes to the question of whether Atari induced others to infringe on the Magnavox patents and therefore it's certainly relevant and it likely to lead to admissible evidence on those issues.

Q. Mr. Bushnell, was the patent, of plaintiff's Bushnell deposition Exhibit 3, one of the patents you did discuss with Midway or Bally?

MR. HERBERT: Go ahead and answer the question.

THE WITNESS: Would you rephrase the question?

MR. ANDERSON: Read it first.

(Pending question read by reporter.)


MR. ANDERSON: Q. That was during the March 1974 meetings or meeting in Chicago?

A. Yes.

Q. Did you discuss with Mr. Tomlinson or Mr. Ross whether or not there was any relationship between the Royalty Agreement, Ross deposition Exhibit 3, and rights under your patent, Bushnell deposition Exhibit 3?

A. Yes.

Q. Please relate to me that discussion?

A. I felt that the patent was a separate situation to the Royalty Agreement.

Q. Has the Royalty Agreement, Ross deposition Exhibit 3, ever been canceled?

A. No it has not.

Q. Has it ever been modified either in writing or orally?

A. No.

Q. During your meeting in March of '74 or at any time prior to that, did you discuss with anyone at Midway or Bally modifying the Royalty Agreement, Ross deposition Exhibit 3?

Q. No.

Q. You indicated that there were I think four meetings or occasions when you were in Chicago in 1972 and you have described two of them. What was the next occasion where you were in Chicago in 1972?

A. I have described I was there for the MOA Show, I was there to teach a service school, I was there later to discuss this.

Q. And on the occasion when you had Pong with you?

A. That was a later occasion.

Q. That would be a third trip?

A. And I also went to the MOA Show.

Q. That would be three as I understand it?

A. No.

Q. To teach the course?

A. Teach is one.

Q. Attend the MOA Show?

A. No. The MOA was the last.

Q. And then to teach the Empire course was in March or April of '72.

A. Negotiate the contract.

Q. Negotiate the contract and when was that approximately?

A. It was in March or April.

Q. Was that a separate trip from teaching course, teaching trip?

A. Yes.

Q. At the end of 1972 approximately how many employees did Atari have?

A. Probably in the neighborhood of 30.

Q. Did any of those 30, approximately 30 employees make any trips to Chicago in 1972?

A. No.

Q. Approximately how many trips did you make to Chicago in 1973?

A. Maybe four.

Q. What was the first trip to Chicago that you recall making during 1973?

A. Boy, I really can't recollect. I believe it was in early summer, late spring.

Q. What was the purpose of the first trip that you can remember making to Chciago in 1973 or the Chicago area generally?

A. I don't recollect.

Q. What trip to you recall making to Chicago in 1973 specifically?

A. MOA Show.

Q. Did Atari have a booth at the MOA Show in 1973?

A. Yes we did.

Q. As of the date of the MOA show in 1973, approximately how many employees did Atari have?

A. 250.

Q. Did other Atari employees attend the MOA show beyond you?

A. Yes.

Q. Who in addition to you?

A. They were Mr. Wakefield, Mr. Mobilio.

Q. M-o-b-i-l-i-o?

A. Yes. Mr. Karns, K-a-r-n-s. Mr. Emmons.

Q. E-m-m-o-n-s?

A. Yes. Mayer.

Q. M-a-y-e-r?

A. Right. Alcorn.

Q. A-l-c-o-r-n?

A. Yes. Andres.

Q. A-n-d-r-e-s?

A. Yes. Faraco.

Q. Will you spell that one?

A. F-a-r-a-c-o. I think that is it.

Q. What was Mr. Wakefield's position at that time?

A. President.

Q. And is he a psychiatrist?

A. Yes.

Q. Mr. Mobilio, what was his position?

A. VP marketing.

Q. Mr. Karns?

A. National sales manager.

Q. Did he report to Mr. Mobilio?

A. Yes he did.

Q. Mr. Emmons?

A. Engineer.

Q. To whom did he report?

A. To Mr. Alcorn.

Q. Mr. Mayer?

A. Engineer.

Q. Did he report to Mr. Alcorn?

A. Yes.

Q. Mr. Alcorn?

A. Vice president of engineering.

Q. Mr. Andres?

A. That is Miss Andres. She is my secretary.

Q. Mr. Faraco?

A. Engineer.

Q. Did Atari have just one booth space at the MOA or more than one?

A. We had three contiguous booths?

Q. What did Atari have on display at the MOA in 1973 in the way of equipment?

A. It had Pong, Space Race, Pong Doubles, Gotcha.

Q. Was there more than one of any of these games in the three booths, three contiguous booths of Atari?

A. Yes.

Q. How many Pongs?

A. I don't remember.

Q. How many in all, approximately how many games in all?

A. I think there were approximately 10.

Q. Where they operative games?

A. Yes.

Q. All of them?

A. Yes.

Q. Were they operated at the show?

A. Yes.

Q. Who got to keep the quarters?

A. Free play.

Q. Did you use a token or just bypass the coin slot or how was it?

A. Bypass the coin slot.

Q. During 1973 did Atari have any machines in the Chicago area at any location other than in the booths at the MOA--

A. No.

Q. --at any time?

A. Would you clarify that question?

Q. Well you said that Atari had 10 machines approximately at the MOA.

A. Yes.

Q. And now were they all in the booth space of Atari at MOA?

A. We had two other machines in a hotel suite.

Q. In the Conrad Hilton, was that?

A. Yes.

Q. What machines were they?

A. World Cup.

Q. Is that an automotive racing game?

A. No.

Q. What is World Cup just generally?

A. It's a ball paddle game.

Q. What was the other game?

A. Grantrak.

Q. Were they operative games?

A. Yes.

Q. Were they actually operated during MOA?

A. Yes.

Q. Has Atari at any other time in 1972 had a machine at any location other than the two you have mentioned?

A. No.

Q. At any time in the history of Atari has it had any machines in the Chicago are other than at the MOA in our booth space and in the Conrad Hilton in a suite that you have referred to?

A. Not machines which Atari has owned.

Q. How many World Cup games did you have in the suite?

A. One.

Q. How many Grantrak ten games?

A. One.

Q. So you had approximately 12 games in Chicago during the MOA in 1973?

A. Yes.

Q. Where did those games come from?

A. Los Gatos.

Q. Were they invoiced to anyone or just kept in the property of Atari?

A. Just kept on the property of Atari.

Q. What was done with the machines after the show?

A. Most of them--some of them were shipped to Los Gatos.

Q. How many were shipped to Los Gatos?

A. I don't remember.

Q. What became of the rest of them?

A. They were shipped to Atlanta.

Q. For what purpose?

A. There was another show down there.

Q. Did you at one time work for a Salt Lake City amusement machine company?

A. No.

Q. Were you in some way involved with a Salt Lake City amusement machine company?

A. Well, there was a Salt Lake City amusement park.

Q. Is that the name of the entity?

A. No. It was Lagoon Corporation.

Q. What was your involvement with Lagoon Corporation?

A. I was manager of the games department.

Q. Was that while you were in college?

A. Yes it was.

Q. Did you have any relationship with Lagoon Corporation following your college career?

A. No, other than, you know, just being good friends with lots of people.

Q. Did Atari, Incorporated have any business relationship with Lagoon Corporation?

A. Yes.

Q. What is that relationship?

A. We sold an operation to Lagoon Corporation. We had machines in operation which I previously stated and sold that to Lagoon.

Q. Were those machines owned and operated by Atari, Incorporated or by some entity which Atari--

A. Some entity.

Q. What entity was that?

A. Called Martin Enterprises.

Q. When was Martin Enterprises created?

A. The summer of 1973.

Q. Does it still exist?

A. No it does not.

Q. When did it cease to exist?

A. Spring of 1974.

Q. Did it operate video machines?

A. Yes.

Q. What became of the video machines? Were they sold to Lagoon?

A. Yes.

Q. Are you familiar with an entity known as West World Amusements?

A. No I am not.

Q. Does Atari, Inc. have any interest in Lagoon Corporation?

A. No it does not.

Q. Other than the trip to the MOA Show about which you have testified, what other specific trips do you recall making to the Chicago area during 1973?

A. I remember the trip in which we talked about royalty arrangements under the patent.

Q. Now, was that in 1973?

A. Oh excuse me, that was in 1973. I'm sorry. I don't really recollect--maybe I didn't go there four times. I can remember the MOA. Things were so hectic I don't recollect. Maybe I only went there once in '73. That seems unlikely but--

Q. Do you keep records of your travel?

A. It should be in my calendar.

Q. Would you check and let us know how many trips you made to the Chicago area during 1973?

A. Sure.

Q. Did any other employees of Atari, Inc. make trips to the Chicago area during 1973 including the people that you have mentioned that were at the show but of course excluding the show which you have already testified about?

A. I think Mr. Karns probably made a trip there.

Q. More than one trip?

A. I would say maximum of two.

Q. And Mr. Karns in national sales manager, is that his title?

A. That's correct.

Q. How does Atari, Inc. distribute its products in Chicago area?

A. It sells them to Empire Distributing.

Q. Does it sell them to Empire Distributing exclusively in the Chicago area?

A. That is the only people, yes.

Q. Is there an agreement between Empire Distributing and Atari--

A. No.

Q. --either written or oral?

A. There is an oral agreement.

Q. Approximately when was that oral agreement reached?

A. Spring of '73.

Q. Where you personally involved in the reaching of that oral agreement?

A. Yes I was.

Q. Was that during one of your visits to Chicago?

A. No.

Q. How was it done?

A. On the telephone.

Q. With whom at Empire did you reach that oral agreement?

A. Gil Kitt.

Q. What is the oral agreement as best you understand it?

A. We would sell to Empire and no others in that area as long as, you know, they represented us fairly.

Q. Any other aspect of the agreement that you can recall that you discussed at that time?

A. Payment terms would be two percent, ten, net 30, and that they would pay shipment. The machines would be sold F.O.B. deck.

Q. Any other terms or conditions that you can recall?

A. No.

Q. Did you ever discuss with Mr. Kitt or anyone at Empire Empire's handling of competitive lines?

A. Yes.

Q. What was that discussion?

A. Oh just something to the effect that I was hopeful that some more Atari games were being sold that anyone else's.

Q. When did that occur?

A. Over the phone at various times.

Q. Any other discussions with respect to competitive lines?

A. Not to my recollection.

Q. Has there ever been a training course for Empire personnel with respect to Atari games of the type you described you conducted with respect to Nutting?

A. Yes.

Q. When have they occurred?

Q. I think there has been one that was conducted by Mr. Arkus. [sic - he is referring to Bill Arkush] Excuse me, that is not true. It was one of the employee technicans of Atari. I don't remember who.

Q. When was that course held?

A. Probably in early fall of '73. Joe Alig.

Q. What is his title with Atari?

A. He is no longer with Atari.

Q. What was his title when he was there?

A. Customer service.

Q. Customer service manager?

A. No, just customer service.

Q. Customer service man. For how long was the training course at Empire?

A. Probably one day.

Q. Did Mr. Alig make a tour at that time of several distributors?

A. Yes.

Q. Was the training course that you referred to in Chicago at Empire?

A. Yes.

Q. Did he teach at any other Midwest locations?

A. I'm sure he did.

Q. Do you know any of them?

A. Probably it would be Omaha, presumably Minneapolis. I think the closest Midwest would be--I guess we jumped from there over to New York.

Q. Did he go to any other Empire installation other than the one at Chicago, do you know?

A. No he did not.

Q. I understand they have places of business in other cities.

A. Yes. Can I get a glass of water?

Q. Certainly. Why don't we take a break and I will look through those invoices at this time.

(Short recess.)

MR. ANDERSON: Q. Earlier Mr. Bushnell, when I asked you for the basic blocks of a video amusement machine you mentioned a TV monitor. Has Atari used commercial TV receivers in contrast to monitors at any time in its manufacture of games or amusement machines?

A. No it has never used a TV receiver. It has used what was once a TV receiver.

Q. Was it purchased by Atari as a TV receiver and modified in some way?

A. Yes.

Q. We have gone through the invoices. At the moment I see no need to require copies or ask you to delete portions. We might at some future date want one or two of the earliest or latest but I think for the moment the easiest procedure is just to ask you one or two questions about the. I notice several of them relating specifically to the shipment of computers. Are they sold as such or are they only sold as replacement items, do you know? I have one here two Pong computers shipped at apparently no charge, N/C.

A. We have a warranty policy that they are shipped as a computer.

Q. Are they a replaceable item in the field, the computer?

A. Yes they are.

Q. This particular one is Invoice No. 3866 to Empire. Does Atari from time to ttime ship computers to Empire in Chicago for replacement purposes?

A. Occasionally.

Q. I noticed several relating to harnesses. What is a harness?

A. It's the wiring, the internal wiring of the machine.

Q. Why does Atari ship harnesses to Empire as indicated by some of the invoices?

A. Occasionally a connector becomes defective and it's cheaper to replace it than repair it.

Q. What promotional activities in general does Atari conduct with respect to the sale of its video amusement machines?

A. We occasionally advertise.

Q. Where does Atari advertise, in what outlets or--

A. Primarily Cash Box which is a trade rag.

Q. What other promotional activities does Atari--Cash Box is a nationally distributed magazine, I take it?

A. Yes.

Q. What other means of promotion does Atari employ?

A. The MOA Show.

Q. Any others?

A. No.

Q. Has Atari ever shipped a machine to a distributor for a field test or market test?

A. Well, I mean many of the machines are for market test but we sell them.

Q. Has Atari ever sold a machine for a test where the terms were in any way different from the ordinary terms that you testified about earlier?

A. No. Occasionally if we feel that a machine is what we consider to be not a production run we will have a reduced price on it.

Q. Do you ever permit deferred payments for a market test machine?

A. No, not really.

Q. What are your terms for return of a machine that a customer doesn't want to keep?

A. Generally there are no provisions for a return.

Q. And specifically other than the generalization if Empire took a new machine and decided they didn't think it fitted their market needs, could they return it to you?

A. They could at our discretion.

Q. Has this ever occurred that you know of?

A. We reshipped on occasion.

Q. You have reshipped. What do you mean by that?

A. Well, let's see, it would be a situation where if Empire didn't want the machine they would call us and sometime we would actually take it back.

Q. And it has occurred with respect to Empire?

A. On two occasions, yes.

Q. What tow occasions do you recall specifically?

A. There was a situation of a Quadrapong machine which they couldn't get to function properly so rather than, you know, repair it they decided to return it and we agreed.

Q. Were both of the two occasions you referred to Quadrapong?

A. Yes they were. Oh excuse me. There was one other in which it was a Grantrak that was a real lemon.

Q. But again it was a defective machine?

A. Yes it was.

Q. Has Atari ever accepted a returned machine for grounds other than malfunction?

A. No. It's not our policy.

Q. Approximately what percentage of the industry sales of video amusement machines does Atari have in your professional opinion?

A. I just don't know. I would like to know.

Q. Is there any trade source that from time to time issues such information?

A. Not to my knowledge. If you find it would you let me know?

Q. From your knowledge of the industry, what is the sales trend in the video amusement machine business?

MR. HERBERT: I object to that question. That has nothing to do with anything in the lawsuit. I instruct the witness not to answer.

MR. ANDERSON: Q. Other than the specific instances that you have already testified about where Atari has place machines for street operations, has Atari ever sent out a machine or sold a machine based upon a return that is a function of the revenue produced?

A. Not to my recollection other than those previously mentioned occasions.

MR. HERBERT: Perhaps I misunderstood the question. By return other than you mean being paid as a percentage of the take of the machine?

MR. ANDERSON: Yes or anything other than a fixed price sale.

Q. Is there any instance where Atari has sold a machine on anything except a set price sale or the instances of street operations that you have already testified about?

A. No.

Q. During your meeting in the spring of 1974, with Mr. Tomlinson and perhaps Mr. Ross, did you discuss the Magnavox patent position?

A. Yes we did.

Q. What was the discussion?

MR. HERBERT: Objection on this. Again we are getting beyond the area of venue.

MR. ANDERSON: I don’t know that that is true and I don't see how you do unless you know what this discussion was, Mr. Herbert. We have certainly established a relationship between Midway, Bally, Empire and Atari and I think we are entitle to explore it fully.

MR. HERBERT: All right.

MR. ANDERSON: Q. Will you answer the question please?

A. We discussed prior art that I have--which I had, not I have.

Q. Prior art with respect to the patent that Magnavox is asserting?

A. Yes.

Q. How did that subject of prior art first come up during the meeting?

A. Yes.

Q. How did that subject of prior art first come up during the meeting?

A. There was a, you know, a question was asked, what do you think about the Magnavox situation.

Q. Someone asked that of you?

A. Yes.

Q. Was that Mr. Tomlinson, do you recall?

A. No. I think It was Mr. Ross.

Q. What was your response?

MR. HERBERT: Objection. Now I do instruct the witness not to answer. This has nothing to do with venue, it only has to do with validity and possible scope of the patent.

MR. ANDERSON: Q. What prior art did you refer to in that conversation?

MR. HERBERT: Objection, same reason, instruct the witness not to answer for the same reasons.

MR. ANDERSON: Q. What other aspects of the Magnavox situation were discussed during that meeting other than your discussion with them of prior art that you had?

A. The question was raised if anyone felt that Magnavox was going to sue.

Q. At the time of your meeting was there not a lawsuit pending?

A. No there was not.

Q. Was there any discussion of any of the Bally companies indemnifying or holding Atari harmless in any way in the event of a lawsuit?

A. No.

Q. Was there any discussion of the possibility of Atari holding any of the Bally companies harmless or indemnifying them in the event of a lawsuit?

A. I would like to confer for a second.

(Short recess.)

THE WITNESS: Would you restate the question?

MR. ANDERSON: Would you read the question please?

(Pending question read by reporter.)

THE WITNESS: There was a discussion of a future further agreement in which one of the provision that we were discussing was a provision of indemnification.

MR. ANDERSON: Q. Was this a further agreement between Atari and one of the Bally companies?

A. There were no further agreements.

Q. I mean was there discussion with respect to a possible further agreement?

A. Yes.

Q. That is what you are referring to in your last answer?

A. Yes.

Q. With which Bally company was that being discussed or with respect to which?

A. It was with Mr. Tomlinson.

Q. And was he speaking then for Midway or Bally or Empire or do you know?

A. I don't know.

Q. Did he distinguish between those various companies during your discussion?

A. I don't recollect.

Q. Do you know who he was representing during the discussion? Was it Midway or somebody else?

Q. I don't know.

Q. What was the discussion with respect to indemnification in the event of a future agreement?

MR. HERBERT: I am going to object to this. Again this witness has already testified that there has been no agreement for indemnification and as far as the discussion as to what the future might be, I think that is pretty far afield again from the area with which we are concerned here so I instruct the witness not to answer.

MR. ANDERSON: I think the record in this deposition and prior ones shows a rather close relationship between these companies and I think we are entitled to explore it.

MR. HERBERT: Between what companies?

MR. ANDERSON: Between Midway, Bally, Atari, and Empire.

MR. HERBERT: Maybe I misunderstood your question but I think Mr. Bushnell already indicated he didn't know which of those companies the other party was representing and I may have misunderstood your question.

MR. ANDERSON: Your summary is exactly in accord with mine and my question is what was discussed between Mr. Tomlinson and Mr. Ross and Mr. Bushnell at the meeting in the spring of 1974 with respect to possible indemnification regarding the Magnavox patent claims and I would like to to answer that as best you can, Mr. Bushnell.

THE WITNESS: Well, it was primarily geared around, you know, the discussion of some of the prior art which I had and that I felt Atari would, you know, as part of a Royalty Agreement take on that burden.

MR. ANDERSON: Q. Now what burden is that?

A. In the event of a possible Magnavox patent infringement suit.

Q. And the burden would be what, that Atari would defend the suit?

A. Yes.

Q. Have there been any further discussions since the meeting between Mr. Tomlinson, Ross and you regarding this subject matters?

A. No.

Q. Either telephone or personal?

A. No.

Q. Have you discussed this subject matter with anyone, any of the Bally companies since that meeting in Chicago?

A. No I haven't.

Q. Did you ever discuss that subject matter with anyone in or any of the Bally companies prior to the meeting in Chicago with Mr. Tomlinson and Ross in March or April of this year?

A. I had mentioned on the telephone that I had a situation which I felt would be of interest to them and it included the indemnification provision.

Q. When was that conversation?

A. It was probably a week prior to my visit.

Q. And the proposal that you thought might be of interest to them included Atari's assumption of responsibility for defending claims by Magnavox, is that correct?

A. Yes.

Q. Did it also involve a license under Atari patent rights?

A. Yes

Q. Did it involve any exchange of know-how?

A. No it didn't.

Q. Or any engineering help of any kind?

A. Strictly a license under our patent.

Q. Prior to that telephone conversation had you ever discussed with anyone associated with any of the Bally companies the Magnavox patent rights and claims?

A. I was aware of it. We had discussed the existence of the Magnavox patents. That was about the extent of it.

Q. Have you had any discussions with any other manufacturers of video amusement machines with respect to the Magnavox patent position?

A. Yes I have.

Q. With whom?

A. Oh I think a fellow, Gary Stern from Seeburg.

Q. G-a-r-y?

A. Yes.

Q. S-t-e-r-n?

A. Yes.

Q. Who else?

A. Gene Lipkin from Allied Leisure.

Q. Who else?

A. That is about it.

Q. On how many occasions have you discussed the Magnavox patent position with Gary Stern?

A. I think I can only think of one phone call.

Q. When was that approximately?

A. I really don't know. It was prior to being served.

Q. Was it this year?

A. I don't believe so.

Q. Who initiated the phone call?

A. He did.

Q. Was it to inquire specifically about the Magnavox patent position?

A. Yes I believe it was.


Q. Approximately how long did this phone call last?

A. Five, ten minutes.

Q. Relate as best you can what he said to you and what you said to him.

MR. HERBERT: Objection again. It's still way beyond venue. It has nothing to do with this whole lawsuit. You are going far beyond. I instruct the witness not to answer.

MR. ANDERSON: Q. Will you answer?

A. No I will not.

Q. On how many occasions did you discuss the Magnavox patent position with Gene Lipkin?

A. One.

MR. HERBERT: Objection.

MR. ANDERSON: Q. On one occasion, is that right?

A. I will not answer.

Q. Mr. Herbert has not instructed you not to answer, he has merely recorded an objection.

MR. HERBERT: The answer is already in the record so I will let it stand.

MR. ANDERSON: Q. Approximately when was that one discussion with Mr. Lipkin?

MR. HERBERT: Objection again and instruct the witness not to answer.

MR. ANDERSON: I think these questions have relevance on the Atari involvement in Chicago.

MR. HERBERT: Not as you have made the questions insofar as what you discuss about the Magnavox patent position, it's too broad.

MR. ANDERSON: IT's the only way you can get the specific questions to establish a foundation, it's fundamental. IF I did it any other way you would have a valid objection.

Q. Approximately when was that one discussion with Mr. Lipkin?

MR. HERBERT: Answer that one.

THE WITNESS: I think that was probably in the summer of '73.

MR. ANDERSON: Q. What that a telephone conversation?

A. Yes it was.

Q. Who initiated the call?

A. I don't remember.

Q. Approximately how long did it last?

A. 10, 15 minutes.

Q. Was it initiated specifically with respect to the Magnavox patent position?

A. No, it wasn't

Q. Have you ever had any business relationship with any other manufacturers of video amusement machines other than the ones you have already testified about?

A. In terms of sales or--

Q. Sales, engineering help, agreements of any kind with Allied Leisure?

A. No.

Q. With Chicago Dynamic?

A. No.

Q. With Seeburg?

A. No.

Q. With Ramtek?

A. No.

Q. Are you familiar with Universal Research Laboratories?

A. Yes.

Q. Have you ever had any business dealings of any kind with Universal Research Laboratories?

A. No.

Q. Do you know whether Universal Research Laboratories is in the video amusement machine business in any way?

A. I don't know of their dealings. All I know is what I have heard.

Q. Has Atari at any time granted any rights to anyone other than one of the Bally companies under the agreements you have already discussed to make or sell video amusement machines?

A. Not as far as our computers. We are the sole manufacturer of our computers.

Q. Do you sell your computers to others for incorporation into video amusement machines?

A. Yes.

Q. To whom?

A. Various companies.

Q. Approximately how many companies have you sold your computers to for incorporation into their own video amusement machines?

A. Probably four.

Q. What are the names of those companies?

A. Atari U.K. No relation as a company, they just use our name. Socodimxsa.

Q. Is that a South American company or Mexican?

A. No, French.

Q. To whom else have you sold?

A. Segasa.

Q. Where is Segasa located?

A. Spain.

Q. Is Segasa related in any way to Seeburg, do you know?

A. I believe that it is.

Q. Do you know how?

A. I think Seeburg owns a percentage of them although I am not sure of what that is.

Q. And to whom else has Atari sold its computer for incorporation into their machines?

A. Hunter Electronics, PTC, LTD, Australia.

Q. Do you restrict in any way the places in which these four companies can resell their complete machines?

A. No.

Q. Do you know whether any of them do resell them in the United States or for shipment to the United States?

A. None to my knowledge.

Q. You gave me a list of machines at the beginning of this deposition and I will lay before you my list. Is that a complete list of the games which Atari, Inc. now has in their line?

A. There is one more and I don't know what it is. No. Yes that is a complete list.

Q. Do you know Joseph Robbins?

A. Yes I do.

Q. Have you met with him personally?

A. Yes I have.

Q. In Chicago?

A. Yes.

Q. Anywhere else?

A. He visited my factory at one time.

Q. Have you met with him on each occasion of your travelling to Chicago do you know?

A. No I haven't.

Q. Approximately on how many occasions have you met with him in Chicago?

A. Oh probably three or four.

Q. Do you know Mr. Wolverton?

A. Yes I do.

Q. Have you met with him personally?

A. Yes.

Q. On what occasions?

A. On visits to Midway.

Q. He is the president of Midway, is that correct?

A. Yes.

Q. Where these occasions other than the ones that you have already testified about or--

A. No. They were in conjunction with those previous meetings.

Q. Have you met Mr. David Braun?

A. Yes I have.

Q. On what occasions , if you recall?

A. At the MOA Show.

Q. And he is an officer of Allied Leisure, am I correct?

A. That's correct.

Q. At what other shows have you shown video amusement machines? other than MOA and I think you said one in Atlanta?


Q. What does that stand for?

A. International Association of Amusement Parks.

Q. Is that the show that is in Atlanta?

A. Yes.

Q. Have you ever shown at any others?

A. Oh there have been some small regional shows. Whether you can really call them shows or not is hard to say.

Q. Any in the Midwest?

A. I think there was one in Omaha.

Q. Any others that you can recall?

A. No.

Q. Was that in 1973 in Omaha?

A. Yes.

Q. Have you shown in the Atlanta IAAP on more than one occasion?

A. No.

Q. That was in 1973 also?

A. That's correct.

Q. When did you first learn of the video game that ultimately became known as Odyssey of Magnavox?

MR. HERBERT: Objection. That has nothing to do with the venue question either. I instruct the witness not to answer.

MR. ANDERSON: Q. What initiated the original discussion between you and Bally with respect to video games? Did you initiate it or did someone in the bally companies?

A. I initiated it.

Q. Did you approach other people at the time that you approached the Bally companies or were they the only company that you approached in the manner indicated by the exhibits that already are of record?

A. Nutting Associates--I don't know whether I approached them but upon leaving Nutting Associates I agreed to complete a prototype game for them.

Q. Is anyone else other than you involved in the design or engineering of the computers for Atari?

A. Yes.

Q. Anyone outside of Atari? In other words, not an employee of Atari.

A. No.

Q. Has Atari ever made an attachment for a TV receiver in the nature of Odyssey?

A. What do you mean?

Q. In other words, something that could be attached to a home TV receiver.

A. As a product?

Q. As a product or proposed product?

A. No it hasn't.

Q. Has it done any work on that product line or potential product line?

MR. WELSH: I'm wondering how that is relevant as to potential product line. I will object to that. I would like to request you to speed it up if you could. I am right at the door and no go.

THE WITNESS: Atari has the capability of doing that if it wishes to.

MR. ANDERSON: I will try to cut it short.

Q. Has it done it? You say it has the capability. Has Atari done any work?

A. On the consumer product?

Q. Yes.

A. Yes it has.

Q. Has it ever sold a product for the consumer market?

A. Well, we have had people who are nonprofessionals buy our coin operated pieces but that is the extent of it.

Q. Has Atari ever sold the computer part apart from a TV receiver or monitor other than to the four customers you named for incorporation by the customer with a TV receiver?

A. Not to my knowledge. I think there were some small companies in South America.

(Short recess.)

MR. ANDERSON: I have just one or two further questions.

Q. Is Mr. Wakefield still with Atari?

A. No he is not.

Q. When did he terminate?

A. Three weeks ago. We had a significant reduction in personnel.

MR. ANDERSON: I will have the reporter mark as Bushnell deposition Exhibit 4 a copy of the affidavit of John C. Wakefield.

(Copy of affidavit of John C. Wakefield marked Bushnell deposition Exhibit No. 4 for identification)

MR. ANDERSON: Q. Mr. Bushnell, are you familiar with Bushnell deposition Exhibit 4?

A. Yes I am.

Q. Has Atari, Inc. at any time during its existence had a telephone in the northern district of Illinois?

A. No it hasn't.

Q. Or a representative located there?

A. No.

Q. Has it ever had a business location there of any kind?

A. None whatsoever.

Q. Has Atari, Inc. ever accepted trade-ins of machines that it previously sold?

A. Never.

Q. Has it ever purchased back a machine that it sold other than the one that I think you mentioned earlier that was defective?

A. No it has not.

Q. Does Atari have any licensees other than the relationship to Nutting that you mentioned under Bushnell deposition Exhibit 3?

A. There is no agreement between Nutting and Bushnell on this agreement.

Q. I think you said there was some relationship that was terminated.

A. We had an agreement but it had nothing to do with our patent.

Q. Does Atari have any licensees under Bushnell Exhibit 3?

A. No.

Q. When did Atari first become aware of the patents under which Magnavox makes its claims?

A. Vaguely or detailed?

Q. Well, vaguely.

A,. It was probably middle--I would say 1972, middle of '72.

Q. How did Atari gain that awareness?

A. There was some mention of the existence of such patents from Bally Corporation.

Q. Was that during a meeting?

A. Yes.

Q. In Chicago?

A. Yes.

Q. Was that the meeting when you entered into this agreement?

A. When we negotiated it.

Q. When you negotiated it. Has Atari, Inc. ever indemnified any customer against infringement of the patents under which Magnavox makes its claims?

A. No it has not.

Q. When did Atari gain more specific knowledge of the Magnavox patents, more specific knowledge than your vague information in the summer of '72?

A. It was probably--I went home and I think I applied for a copy of those patents and I think it was two or three months thereafter.

Q. Did Bally give you the patent numbers during the meeting?

A. I don't recollect.

Q. How di you apply for copies of them or request them?

A. I must have had patent numbers. My secretary--I just said that I understand there is a Magnavox patent and she as good little secretaries do came up with the goods.

MR. ANDERSON: We have no further questions.

MR. WELSH: I have no cross-examination.

MR. ANDERSON: I would suggest that we agree that Mr. Bushnell can sign the deposition before any notary public.

MR. HERBERT: So stipulated.

(Whereupon, the taking of the deposition was concluded)

Bonus - Someone mentioned earlier that they wanted to see pictures of Dave Nutting. I don't have any from when he was active in the coin-op industry but here are two from his earlier days:

1949 - Culver Military Academy


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