Points of Articulation
Though in school we're taught history as a series of consecutive events, it never really takes a straight path.
In the early 60s, Nintendo (still mainly a playing card manufacturer at the time) joined with two other groups to form a consortium dedicated to producing packaged food. Nissan's instant ramen had been a huge hit, and they wanted a piece of that. Nintendo was already licensing Popeye for their playing cards, so they used those contacts to help the new company license him as a mascot for the food.
In 1980, Nintendo had a glut of unsold Radar Scope cabinets and needed to find a way to turn a profit on them. They needed a new game that would run on all the existing hardware, meaning they could just drop in a new motherboard and slap some labels on the sides. Shigeru Miyamoto pitched a bunch of narrative-based ideas, and Nintendo president Hiroshi Yamaguchi focussed on one involving a love triangle, then had a brilliant idea: since they already had experience licensing Popeye, why not do that again and use the upcoming live-action movie for free promotion? Yeah, business doesn't work that way, so instead Miyamoto just went with the archetypes the characters represented: a dedicated working man, his loving partner, and a big, strong bad guy. Thus Bluto became a gorilla and, remembering King Kong scaling the Empire State Building, Miyamoto put that gorilla on a construction site. Since Nintendo had learned that licensing things wasn't as easy as they thought, they named their new ape Donkey Kong. "Original character do not steal."
Donkey Kong started making serious bank, obviously, and now Universal Studios took interest. They were considering getting into games, and were shocked to find what was essentially their biggest character was already in there. Universal set up a meeting with Coleco (at that time finallizing a deal to bring DK to the Colecovision) that was ostensibly about possibly investing in the company, but was really an excuse to blindside both Coleco and Nintendo by declaring copyright infringement. Universal told them they had 48 hours to stop selling the game, recall all existing copies, and give Universal all the profits that had been made from the character. Coleco was cowed, and struck a deal to pay Universal 3% of what they'd make off the game, but Nintendo had money. And you don't f*@% with the money.
Nintendo's corporate heads were willing to settle, but Nintendo of America's attorney, Howard Lincoln, said they should fight it. He said they could win. Lincoln pointed out that being sued for 100% of all profits on Donkey Kong (orginal character do not steal) by a company that had in the past not sued over the use of actual King Kong on unlicensed merchandise would never hold up in court. Universal kept pressuring Nintendo, Coleco started pressuring Nintendo, and even Nintendo of Japan wanted to settle - the only person standing in the way was Howard Lincoln.
While all this was going on, Universal was still lashing out at everyone who had licensed the game or the character in any way. Tiger Electronics had licensed King Kong for a handheld game, and Universal asked them to submit it for approval; declaring it was too similar to Donkey Kong, Universal revoked the license. In possibly the ballsiest move of all time, Tiger Electronics responded by challenging Universal to prove they owned King Kong.
Whether Howard Lincoln knew any of this or not, he took the same approach: he told Universal to prove they owned King Kong or GTFO. Universal said they would, but weeks would drag by with no proof produced. He'd ask them again, they'd demand their payment and threaten to sue. Many companies were settling, so Universal had already started making money on a lawsuit that hasn't even been filed yet. And when it was filed, things really got interesting.
Nintendo hired John Kirby to represent them. At trial, he presented the usual evidence about the ways Donkey Kong is different from King Kong, as you would in any such case. And then he dropped the muthaeffin' building on them.
1933's King Kong was made by RKO Pictures. Merian C. Cooper, who created King Kong and directed the film, assumed he owned the rights, and had merely lent them out to RKO for two movies. (For what it's worth, everyone in charge at RKO at the time thought the same thing, too.) By the '60s, he realized he didn't have any documentation proving that, so all he could really claim was the film's novelization. In 1975, Dino De Laurentiis bought the rights to remake the movie from RKO - but Universal claimed they already had the remake rights, and went to court.
In court, Universal claimed the copyright on the novel had expired without renewal, so the character was public domain. On November 24, 1976, the judge found in their favor, but also that the plot of the 1933 movie was still protected: so anyone could use the character, but not the specific story elements the movie invented. (cf. how Frankenstein is in the public domain, but the green, square-headed version is still protected.) Universal put their plans for a remake on hold, but got a cut of the percentage of De Laurentiis' version.
The judge in the Nintendo case shredded 1982 Universal to bits. They were suing - and already making a profit from - a character they themselves had fought to say they didn't own? They couldn't own? No one could own? And they knew from the start they didn't own the character the way they were claiming to? Universal had effectively been stealing money from every company, and they now had to pay all of it back. As well as all Nintendo's legal fees. Going after Donkey Kong cost Universal Studios millions of dollars. And then even more as they kept appealing the decision throughout the decade, losing and losing every time.
(In a rare double-whammy decision, the judge also ruled that Tiger Electronics' King Kong game was too similar to Donkey Kong, so they had to pay Nintendo, as well.)
The full rights to King Kong are a muddled mess. In December of 1976 (12 days after the public domain ruling above), it was decided that three parties owned different parts of Kong: RKO Pictures owned their original two movies, until the company was purchased by Ted Turner in 1986 and merged with Time Warner in 1996, so that's where those sit now; The Dino De Laurentiis Company owned its two movies, though today DDL is part of Studio Canal, and the North American rights are still property of Paramount, the company that distributed them at the time; and the Cooper Estate owned all the rights to the name, character, and story of King Kong. The judge stressed that this did not change the original ruling, that the novel's copyright had expired and was therefore in the public domain. The Cooper Estate then promptly sold all its rights, save for books and periodicals, to Universal. So King Kong isn't quite "public domain," though no one company can claim full ownership of him, either.
And if it weren't for spinach-flavored ramen, we might never have known it.