Nestle have responded saying they "are aware of the lawsuit in the United States and will defend ourselves strongly against these allegations", although you do have to wonder exactly how strong their defence can be when the advert was named "Kit Kat: Breakout".
The advert showed a game similar to Breakout but where the bricks were replaced with single Kit Kat bars.
Breakout requires players to knock down coloured bricks by hitting a ball into them using a paddle at the bottom of the screen which moves from side to side.
Atari said the similarities are, "so plain and blatant that Nestle can not claim to be an "innocent" infringer".
Atari claims that the advert and other references to Breakout on social media are a clear attempt at exploiting the "special place [Breakout] holds among nostalgic Baby Boomers, Generation X, and even today's Millennial and post-Millennial 'gamers'".
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A spokesperson for Nestle said: "We are aware of the lawsuit in the United States and will defend ourselves strongly against these allegations".
It said the infringement of Atari's intellectual property rights was illegal and that this "had to have been obvious" to Nestle.
Nestle has responded to the charge by pointing out the fact that the advert is no longer running, and said it would defend itself "strongly" against the allegations.
Kit Kat's maker Nestle has been accused of copying Breakout, the 1970s computer game, in a marketing campaign.
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