After reading up on this situation, I'm thinking
both sides might be handling this the wrong way.
The author of the game admits to originally requesting to develop an officially licensed Battlezone game, but since Atari didn't accept his offer, he went ahead and made a clone of the game anyway. While his intentions might have been good in making the game as a tribute to one of his favorite early arcade classics, he should have been aware of any consequences if the game bore a strong resemblance to Battlezone. I watched
a video of the game, and it's instantly evident that he's attempting to replicate the "look" of classic Battlezone. For whatever reason, Atari wasn't interested in working with him, and he should have moved on in a different direction instead of continuing to poke at the sleeping bear.
On the other hand, you have Atari. While they haven't done anything legally or morally wrong in defending their properties, I have to say that it's just monumentally
stupid that sending cease-and-desist letters is the extent of their involvement. It's not like Atari's got a better Battlezone cooking (at least not one that we know of). Most of their classic game sequels/remakes of the last few years haven't been so hot (to put it mildly), and they could really use another high quality game in their stable right about now. If Vector Tanks was a love letter to Battlezone, then Atari should have dressed up for a Saturday evening date.
As Retro Rogue said above, this could have been a great opportunity for both sides to shake hands, and perhaps rebrand this game (and/or the next iteration) as an official Battlezone game with Atari's blessing. It would have the crossover effect of allowing fans of Mr. Hirschberg's games to look forward to his continued work on the franchise, and for Atari to rebuild their reputation and reinforce feelings of goodwill among their own fanbase.
Atari doesn't do much (if any) internal development anymore. If anyone's going to release updated versions of classic games, then let it be done by developers who are capable of pouring love and devotion and talent into the project. As a longtime fan of Atari, I'd hate to see them go under again (perhaps for the final time) on a sour note, clinging to fading memories of a previous incarnation of the company from three decades ago.
With the rise of downloadable game services on PCs, video game consoles, smartphones, and tablets, Atari has the opportunity to meld past and future, and reinvent itself as a forward-thinking company that can revitalize beloved games in new and exciting ways. It's a shame that Atari doesn't see itself that way.