Settlement: Immersion paying Microsoft $20.75m

[HD Halo X]

Immersion Corp., the maker of video-game controller vibration technologies, has agreed to pay Microsoft $20.75 million to settle the lawsuit brought by the Redmond company last year. More to come.

Update, 2 p.m.: The Immersion-Microsoft settlement was noted today in the court docket (PDF) without citing the amount, which we were able to confirm separately. The deal comes a day after Immersion announced the resolution of a related legal dispute with Internet Services LLC.

Update, 2:20 p.m.: Today's settlement ends a dispute that brought to light some intricate behind-the-scenes legal maneuvering by Microsoft. The saga started in 2002 when Immersion, which makes technology commonly known as touch feedback, sued both Microsoft and Sony for patent infringement. Microsoft and Immersion settled in 2003 for $26 million.

However, as we later found out, that original settlement included an unusual provision that required Immersion to give a sizable chunk of money back to Microsoft once Immersion settled with Sony, depending on the size of a Sony-Immersion deal. In other words, Microsoft was injecting Immersion with cash while the company waged a legal battle with Microsoft's archrival, Sony. The payback clause meant Microsoft would essentially get a refund in the event that Immersion won that battle.

But here's where it really got interesting: In March 2007, Sony and Immersion announced that they had "agreed to conclude their patent litigation" and enter into "a new business agreement." Microsoft's lawsuit alleged that Immersion was trying to pretend the Sony deal wasn't really a settlement, to avoid making the required refund payment.

Immersion just issued a news release announcing the Microsoft deal. Here's how it describes the terms of the settlement:


Immersion and Microsoft have agreed to resolve Microsoft's claim under a 2003 Sublicense Agreement between Microsoft and Immersion, as well as Immersion's counterclaim that Microsoft breached a confidentiality agreement between the companies dated May 2007. Immersion agreed to make a one time payment to Microsoft in the amount of $20.75 million. In addition, Immersion will be admitted to Microsoft's Certified Partner Program. Other terms of the settlement are confidential.

http://blog.seattlepi.nwsource.com/m...ves/147162.asp

[bowl-o-rama]

slow news day in smackdown?

[Master X]

I guess you can spin it and say Sony paid MS the money in a way.

I dont know lol

[michealo]

"Microsoft's lawsuit alleged that Immersion was trying to pretend the Sony deal wasn't really a settlement, to avoid making the required refund payment." is the interesting part.

did sony actually pay money to immersion?

[WallyWest]

Originally Posted by michealo

"Microsoft's lawsuit alleged that Immersion was trying to pretend the Sony deal wasn't really a settlement, to avoid making the required refund payment." is the interesting part.

did sony actually pay money to immersion?

On top of the $30.6 million in compulsory license fees which Sony had paid Immersion over the previous two years, Sony will make 12 more licensing payments through the end of 2009 totaling $22.5 million, during which other royalties may also be paid.

http://en.wikipedia.org/wiki/Immersion_v._Sony

[michealo]

Originally Posted by WallyWest

http://en.wikipedia.org/wiki/Immersion_v._Sony

hmmm, not sure how Immersion was trying to circumvent their obligation then.

[crazzeto]

I'll be honest, I hadn't heard of this before today... My impressions... WTF, Immersion is stupid, why would they agree to pay microsoft any sort of settlement fee in the case of sony licensing rumble technology? That's friggen crazy!!! Oh well, go go microsoft deal makers lol, way to get nearly free rumble at the end of the day anyway.


Should have made use of quote button, but:

"Microsoft's lawsuit alleged that Immersion was trying to pretend the Sony deal wasn't really a settlement, to avoid making the required refund payment." is the interesting part.

did sony actually pay money to immersion?

Yes, they did. Sony eventually settled out littigation over DS2 with immersion and then licensed the technology to create the DS3... They then turned around to the press and claimed "well we finally figured out how to make rumble work with our motion controls...." lol...

[Shadow1019]

Originally Posted by michealo

hmmm, not sure how Immersion was trying to circumvent their obligation then.

Here's what I think happened: The settlement between Microsoft and Immersion included a provision that if Immersion ever settles its lawsuit with Sony, then Microsoft gets money. As WallyWest pointed out, Sony ends up paying money for "licensing fees" and the lawsuit is dropped (even though a court judgment had been entered against Sony, it was still open to appeal). Once Microsoft saw this, they reminded Immersion of the Microsoft-Immersion settlement agreement and demanded money. I imagine Immersion argued with Microsoft saying that accepting "licensing fees" from Sony isn't a "settlement," therefore Immersion didn't owe anything to MS.

So, push comes to shove and MS sues Immersion saying that the money paid by Sony, although referred to as "licensing fees," is really just a settlement. Immersion realizes they don't want to litigate a case against MS and likely lose more money (win or lose in court), so they reach a settlement with MS and pay $21 million.

Another scenario is that Immersion argued that since the Immersion v Sony lawsuit went to trial and a judgment was entered against Sony, then Immersion did not reach any "settlement" with Sony. After more thought, I think this second scenario is the more likely case.

[kickingtotalass]

Originally Posted by michealo

hmmm, not sure how Immersion was trying to circumvent their obligation then.

So in a round about way Sony Paid MS lol.

[hdinred]

So, the question is: what should Microsoft spend the money on?

How about lowering the Wi-Fi and hard drive costs?

[Shadow1019]

Originally Posted by hdinred

So, the question is: what should Microsoft spend the money on?

How about lowing the Wi-Fi and hard drive costs?

I think they already signed the check over to Square Enix.

[capnmonkey]

I wonder how long it will be before deep pocketed corporations are going to start paying developers to just not make games at all....
Like, instead of buying exclusives, MS would just pay Squaresoft twice what they could expect to make from FF13 sales to just call the whole project off.

[Snadinator]

Originally Posted by capnmonkey

I wonder how long it will be before deep pocketed corporations are going to start paying developers to just not make games at all....
Like, instead of buying exclusives, MS would just pay Squaresoft twice what they could expect to make from FF13 sales to just call the whole project off.

At least we will have a lot of Arcade games to catch up on if that happens.

[Master X]

Originally Posted by capnmonkey

I wonder how long it will be before deep pocketed corporations are going to start paying developers to just not make games at all....
Like, instead of buying exclusives, MS would just pay Squaresoft twice what they could expect to make from FF13 sales to just call the whole project off.

That would be ALOT of cash.

[capnmonkey]

Originally Posted by Master X

That would be ALOT of cash.

Maybe not as much as you'd think.
I'd say very optimistically square might make about $10 for each copy of a game they sell after subtracting development, publishing, shipping, marketing, Sonys cut, etc.

If FF12 sold 5 million copies, that would be a $50 million payoff for them to simply NOT make the game.