Tetris has been embroiled in a large number of legal battles since its inception. In June 1985, Alexey Pajitnov created Tetris on an Elektronika 60 while working for the Soviet Academy of Sciences at their Computer Center in Moscow with Dmitry Pavlovsky, and Vadim Gerasimov ported it to the IBM PC. Gerasimov reports that Pajitnov chose the name "Tetris" as "a combination of 'tetramino' and 'tennis'.

From there, the PC game exploded into popularity, and began spreading all around Moscow. This version is available on Gerasimov's web site.The IBM PC version eventually made its way to Budapest, Hungary, where it was ported to various platforms and was "discovered" by a British software house named Andromeda. They attempted to contact Pajitnov to secure the rights for the PC version, but before the deal was firmly settled, they had already sold the rights to Spectrum HoloByte. After failing to settle the deal with Pajitnov, Andromeda attempted to license it from the Hungarian programmers instead.

Meanwhile, before any legal rights were settled, the Spectrum HoloByte IBM PC version of Tetris was released in the United States in 1986. The game's popularity was tremendous, and many players were instantly hooked—it was a software blockbuster, with reviews such as in Computer Gaming World calling the game "deceptively simple and insidiously addictive". 

The details of the licensing issues were uncertain by this point, but in 1987 Andromeda managed to obtain copyright licensing for the IBM PC version and any other home computer system.

For Amiga and Atari ST two different versions by Spectrum HoloByte and Mirrorsoft became available. The Mirrorsoft version did not feature any background graphics while the Holobyte version had a background picture related to Russian themes for each level. Games were sold as budget titles due to the game's simplicity. Spectrum's Apple II package actually contained three diskettes with three different versions of the game, for the Apple II+ and Apple IIe on separate DOS 3.3 and ProDOS 5-1/4" diskettes, and for the Apple IIgs on a 3-1/2" diskette, none of which were copy-protected: the included documentation specifically charged the purchaser on his or her honor to not give away or copy the extra diskettes!

By 1988, the Soviet government began to market the rights to Tetris through an organization called Elektronorgtechnica, or "Elorg" for short. Pajitnov had granted his rights to the Soviet Government, via the Computer Center he worked at for ten years. By this time Elorg had still seen no money from Andromeda, and yet Andromeda was licensing and sub-licensing rights that they themselves did not even have.

By 1989, half a dozen different companies claimed rights to create and distribute the Tetris software for home computers, game consoles, and handheld systems. Elorg, meanwhile, held that none of the companies were legally entitled to produce an arcade version, and signed those rights over to Atari Games, while it signed non-Japanese console and handheld rights over to Nintendo.

Tengen (the console software division of Atari Games), regardless, applied for copyright for their Tetris game for the Nintendo Entertainment System, loosely based on the arcade version, and proceeded to market and distribute it under the name TETЯIS: The Soviet Mind Game (with faux Cyrillic typography incorporating the Cyrillic letter Ya), disregarding Nintendo's license from Elorg.Nintendo contacted Atari Games claiming they had stolen rights to Tetris, whereupon Atari Games sued, believing they had the rights. After only four weeks on the shelf, the courts ruled that Nintendo had the rights to Tetris on home game systems, and Tengen's TETЯIS game was recalled, with an unknown number of copies sold. 

Nintendo released their version of Tetris for both the Famicom and the Game Boy (the Game Boy version was developed by Bullet-Proof Software, Inc., who held the Japanese license, despite Nintendo's license to the game) and sold more than three million copies; some players considered Nintendo's NES version inferior because it lacked the side-by-side simultaneous play of Tengen's version, but Nintendo's Game Boy Tetris became arguably the most well-known version of Tetris. The lawsuits between Tengen and Nintendo over the Famicom/NES version carried on until 1993.

Sega also released a Tetris game for the Mega Drive, however the ensuing blitz of litigation ensured that it was hastily withdrawn - possibly before it even reached shop shelves. A handful of copies remain, which now change hands for as much as 800,000 yen ($6600) making it probably the most expensive Tetris game in the world.

Pajitnov himself made very little money from the deal even though Nintendo was able to profit from the game handsomely.

In 1996 when Russian restrictions expired, he and Henk Rogers formed The Tetris Company LLC and Blue Planet Software in an effort to get royalties from the Tetris brand, with good success on game consoles but very little on the PC front. The Tetris Company (TTC) managed to secure trademark registrations for the Tetris mark in several countries and has licensed the brand to a number of companies, but courts have not decided on the legality of tetromino games that do not use the Tetris name. Blue Planet was later purchased by JAMDAT Mobile, in turn purchased by Electronic Arts.

According to circulars available from the United States Library of Congress, a game cannot be copyrighted (only patented), which would invalidate much of TTC's copyright claim on the game, leaving the trademark on Tetris as TTC's most significant claim on any government-granted monopoly.

Some players prefer Tetris brand games; others prefer homemade tetromino games downloaded from the Internet, which are given names such as "N-Blox" or "Lockjaw" so as not to infringe trademarks. In late 1997 and in mid-2006, TTC's legal counsel sent cease and desist letters to web sites that misused the Tetris trademark to refer to homemade tetromino games.

Source: Wikipedia