I'll take a stab
The relationship between People's Tobacco and the ATC could have impacted the decision on what images to include in T216, but I'm not sure the litigation prevented the use of the T206 photos.
It appears the decision to go forward with T216 first began anywhere from late 1910 to early 1912. Others probably will have more info on this. Once the decision was made, it is reasonable to assume that Peoples would select what images to use. It is also reasonable to assume that once the decision was made, it was likely going to stick for all the years the cards would be issued; i.e., it would be unlikely that the cards issued in 1914-1916 would change images when it would be far cheaper to just change captions. Thus, if they decided to produce a set in 1911 and picked their lithos at that time, it would have preceded the lawsuit, and the lawsuit itself really would not have "prevented" anything.
It is possible Peoples wanted to use T206 images in 1911 and were denied by ATC. That could have been part of their beef with ATC. I have some problems with that though. By 1911, Roosevelt was pretty far along in going after monopolies, and ATC could not have been blind to what was likely coming its way. It would have been pretty brazen to give the govt more ammunition by denying use of the T206 images by others in the industry, even if there were arguable contractual rights to enforce. As for Amer Litho, they too should have been looking at the writing on the wall, and seeing that their friend/big customer was about to be blown apart. In addition, while the Clayton Act was still a couple of years away, there would have been rumblings about their involvement if they had any kind of tying agreement with ATC. I just don't know that either of these monoliths would have risked making the bigger picture worse by messing with a small local tobacco company in 1911, but hey, arrogance knows no bounds.
Maybe it's simply something as simple as Peoples wanting to include Honus Wagner and Eddie Plank, which apparently would not have been possible using T206 images.
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