Ok, let me rephrase my post a few back:
Atari was known to be sue happy at the time.
They sued Imagic over the similarity between Demon Attack and Phoenix, even though Phoenix was licensed from Amstar/Centuri.
Moon Buggy for C64 was apparently published by a company called Anirog Software.
What stopped Atari from going after Anirog when they went after Imagic over similarities between a licensed game on the VCS console and a Imagic release?