The patent was obviously stupid, but I guess Commodore failed to locate prior art, or prove the invention was obvious enough to defend themselves.
From my faulty memory, it was even more outrageous than that. The way the Amiga renders the cursor using the custom chip set does not even use the XOR method that was patented! So Commodore tried to put up a LOGICAL and technical defense in court, even having Dr.Havemose(?) testify. Bad move. The scumsuckers put up an emotional argument, Big Company Screwing Little Us. They won.