If you ask me - Jeff walked right into it.
The fact is, Atari owns Tempest franchise IP. And if you make a game that is derived from it, no matter how you name it - Atari have some pull.
He should have made a deal with Atari before he started developing TxK, not try to bargain it now. If he would do it before, he could negotiate good deal, now he is legally liable.
On the other hand, Jeff mentioned Tempest for PSX. This seems to infringe on his rights (they used his code, music from T2K), so he could use it to leverage deal now.
But it will cost. It would be much cheaper, if he thought about it before he started developing TxK.
Atari: FireBee, Falcon030 + CT60e + SuperVidel + SvEthlana, TT, 520ST + 4MB ST RAM + 8MB TT RAM + CosmosEx + SC1435, 1040STFM + UltraSatan + SM124, 1040STE 4MB ST RAM + 8MB TT RAM + CosmosEx + NetUSBee + SM144 + SC1224, 65XE + U1MB + VBXE + SIDE2, Jaguar, Lynx II, 2 x Portfolio (HPC-006)
Adam Klobukowski [email@example.com]