It's kind of sad, because only after the XOR patent expired, the guy with the 1976 prior art actually found out about it. They allegedly made over $50 million out of that patent.
The patent was obviously stupid, but I guess Commodore failed to locate prior art, or prove the invention was obvious enough to defend themselves. Cadtrak brought an injunction against them in the USA, which meant they couldn't sell. AFAIK, I think around that point they settled, but they couldn't put up the supposed $10 million in order to pay the fine.
At that point in time, Commodore were pretty screwed anyway, but a lot of people argue if they could've sold their product in the USA (especially the CD32) they might've come out OK. Commodore weren't the only company to lose to Cadtrak obviously.
I'd love to dig up some court notes for you, but Google isn't turning up much.