Best of The EscapistThe King and the Donkey
Lincoln asked Universal for a legal document called a "chain of title," used to demonstrate the legal avenue by which Universal could prove their ownership of the name, story and character of King Kong. When the document failed to appear, Howard Lincoln advised Nintendo to challenge Universal in court; a difficult battle, but one which Lincoln felt was within Nintendo's scope to win. Being a quietly analytical man, Lincoln's own research suggested that Universal's claim was so tenuous, no amount of lawyers could sway a courtroom into agreeing with the unfair demands, and the legal skirmish would merely be a formality.
In a similar move to Sheinberg's meeting with Arnold Greenberg, Nintendo of America arranged to meet with the Universal president, insinuating they were ready to make a deal. When Arakawa and Lincoln came face to face with Sheinberg and told him they were not prepared to pay Universal a penny, his temper apparently got the better of him. He warned them to start saving for their lawyer's fees, as his legal department "even turned a profit!" There was no turning back now. The bridges were burned and a court case was inevitable.
Tensions within Nintendo began to rise, as any rocking of their newly acquired American boat by the massive legal weight of a powerful company like Universal Studios could easily wind up sinking it. Arakawa was warned and kept under close scrutiny by his Japanese superiors during this tenuous time, understanding it was his head on the block if matters took a turn for the worse. Despite this, Arakawa stuck with Lincoln, and refused to bow to the Studios.
On June 29, 1982, Universal prosecuted Nintendo for copyright infringement of their rights to King Kong, by virtue of agreement with RKO Pictures (who made the original film).On top of this, Universal Studios' legal department approached the dozens of licensees of the Donkey Kong franchise (from toys to chocolate bars and cartoons), threatening them with similar action if they did not immediately desist from using the Donkey Kong image. While some of them were reassured by Nintendo's refusal to kowtow, most backed down, cautious of the legal powers at Universal's disposal.
Before the court battle got going, Universal also went back to Tiger Electronics, who they had first granted the King Kong game license to, and told them to change certain details of their game to ensure it was sufficiently different from Donkey Kong. This involved altering the platform environment, changing the barrels to bombs and crowning the hero with a fireman's hat.
The case was heard at the United States District Court for the Southern State of New York before Judge Robert Sweet, lasting for seven days. By this time, Arakawa had made Lincoln the Senior Vice President of Nintendo of America for his sterling work as its outside legal council; a position he held until 1994, when he succeeded Minoru Arakawa as President of Nintendo of America.
Lincoln hired John Kirby to represent Nintendo during the court case. Kirby proved himself to be equally adept, and once Universal Studios had presented their claims, he stunned the room with a fatal blow to Universal's already weakening case.
In 1975, Universal Studios had successfully taken RKO Pictures to court in order to prove the image and story of King Kong were over 40 years old and therefore in the public domain, clearing the path for Dino De Laurentiis to remake the movie in 1976 without paying any expensive royalties. Coupled with Universal being unable to convince the court there would be any confusion between Donkey Kong and King Kong, Sheinberg's reiterated comments about his legal department being able to turn a profit (which did not impress the Judge one bit) and the subsequent scare tactics used against Nintendo's licensees, Judge Sweet ruled in favor of the Japanese.
Although Nintendo also had the opportunity to claim damages from Tiger Electronics for their infringement of the Donkey Kong image (as Judge Sweet determined the alterations were not sufficient to differentiate it from Nintendo's game), Arakawa and Lincoln instead decided to let Tiger off the hook and reclaim the profits Universal had made from the original King Kong license; publicly embarrassing the Studios.