Print 31 comment(s) - last by SiN.. on Aug 28 at 6:56 PM

Microsoft gets $20M of Sony's money

The legal battle between Immersion and Microsoft is over -- again. Back in 2002, Immersion sued Microsoft for patent infringement relating to Immersion patents for force feedback controllers. The rumble effects in Microsoft controllers for the Xbox were at the heart of the suit.

Microsoft later settled with Immersion, agreeing to pay $26 million to settle the litigation between the two firms. Immersion also filed a similar patent suit against Sony for using rumble in its game controllers. Sony refused to license the technology, leading to the lack of rumble effects in PS3 controllers when the PS3 first launched.

Part of the settlement stipulations between Microsoft and Immersion stated that if Sony should ever come back and license Immersion's technology to add vibration effects into PS3 controllers, Immersion would pay Microsoft a portion of any settlement received from Sony.

The particulars of the clause said that Immersion would give Microsoft a minimum of $15 million from any Sony settlement plus a percentage of any amount over $100 million. When Immersion finally settled with Sony -- to the tune of $22.5 million over 3 years and more than $100 million in costs -- Microsoft told Immersion to pay up.

Immersion refused to pay Microsoft, leading to another round of legal action with Microsoft suing Immersion for breach of contract. Forbes reports that Immersion has finally agreed to pay Microsoft the portion of money from the Sony settlement it was due.

Associate General Counsel for Microsoft, Steve Aeschbacher, said in a statement, "We are pleased to have reached a resolution to our legal dispute with Immersion that includes a $20.75 million payment to Microsoft. We are gratified that we have successfully resolved our claims under the 2003 settlement we negotiated with Immersion, which provided benefits to both companies and specific rights to Microsoft."

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By MaulBall789 on 8/27/2008 1:38:28 PM , Rating: 5
MS has to be applauded for minimizing the overall payout to around $5 mil to Immersion for rumble function while Sony pays up nearly $170 mil for the same thing. Flat out beautiful dealmaking. Those lawyers earned their pay and then some today.

By Master Kenobi on 8/27/2008 2:02:47 PM , Rating: 2
True. This was quite clever, and even more clever that Microsoft got them to agree to it. I guess Immersion wasn't confident they could beat Sony in court.

By bighairycamel on 8/27/2008 2:15:51 PM , Rating: 2
I guess Immersion wasn't confident they could beat Sony in court.

Or because they knew the payoff would be quite nice if they charged Sony out the a$$ for it.

By othercents on 8/27/2008 2:39:57 PM , Rating: 2
It could have backfired and they could have only gotten $20mil from Sony which would have required $15mil to Microsoft.


By bighairycamel on 8/27/2008 3:58:39 PM , Rating: 2
Only would have backfired if they were all morons... they're the patent holders and still had the right to deny Sony any licensing. The terms of the Microsoft contract were already in place while Sony was still battling Immersion in court over patent infringement. So I'm sure they would have turned away Sony of the most they could get was a paltry $5m profit between the two companies instead of the $20m for being MS exclusive.

By rs3 on 8/27/2008 9:29:39 PM , Rating: 3
Or maybe because they needed the $26 million from Microsoft to fund a more substantial legal campaign against Sony.

By Samus on 8/27/2008 2:18:15 PM , Rating: 3
There's no arguing Redmond has remarkable lawyers. If only they could do something about the EU...unfortunately that matter is substantially more complex :\

By SiN on 8/27/08, Rating: -1
By Polynikes on 8/27/2008 3:35:41 PM , Rating: 5
Forcing MS to open its kernel to third parties is not right.

By spuddyt on 8/27/2008 4:36:13 PM , Rating: 1
and you just led straight to the biggest philosophical debate since time began, DEFINE WHAT IS RIGHT AND WHAT IS WRONG IF IT IS SO BLACK AND WHITE

By Polynikes on 8/27/2008 7:10:41 PM , Rating: 4
I guess you think all patents, trademarks, copyrights, etc, mean nothing? There is no such thing as ownership?

By daftrok on 8/27/2008 10:14:40 PM , Rating: 2
There are the more general rules in life that are defined and should never be broken. But when someone is forcing you to show others how your invention works, its infringing of rights. It's like telling Coke to tell Pepsi what their real ingredients are. It's like telling Bose to tell RCA how to make speakers. It's called competition, and Microsoft has the same access to outside resources just like everybody else. There are some rules that are meant to be broken and for once Microsoft is breaking the right ones.

By SiN on 8/28/2008 6:56:55 PM , Rating: 2
i hope pepsi never makes their drink like coke. coke sucks compaired to pepsi.

By Yossarian22 on 8/28/2008 2:06:13 AM , Rating: 2
What worthless, pseudo-philosophical drivel.

People like Locke have been proposing a system of rights for ages. Sure, they are not perfect, but they provide a hell of alot more than absolutely relative morality.

By SiN on 8/28/2008 11:54:32 AM , Rating: 2
in the end, if you want to sell something in a country you have to adhear to what that country states you must do before your product/service is allowed to be sold.

in this case it is a governing body over multiple countries trading standards.

By Locutus465 on 8/27/2008 2:51:54 PM , Rating: 2
Wow, Imersion is just stupid... that's all I have to say, why in gods name would they agree to this kind of crap? Oh well, go go microsoft deal making.

By djcameron on 8/27/2008 3:55:58 PM , Rating: 3
Perhaps it may have made thier case against Sony easier by having Microsoft settle. Kind of a precedent.

By gyranthir on 8/27/2008 4:17:59 PM , Rating: 2

And Immersion didn't agree to pay anything at this point. They are forced to pay, based on them being contractually bound to pay as part of their deal with Microsoft.

By akugami on 8/27/2008 8:37:02 PM , Rating: 2
Seems like a tactic Apple (among others) have used. For instance the hierarchical UI used in iPods, Creative MP3 players as well as other MP3 players. I think it was such as crap patent because it was basically taking an existing UI and moving it to a portable device. Big F'ing Deal. Much like taking push email and moving it to a wireless the innovation. Anyways, you pay the guy suing you X dollars and if he licenses it to someone else, he refunds Y dollars to you. Apple paid Creative $100m, a ginormous sum. However, if Creative licenses to others, Apple recoups some of its money. And with a "win" under Creative's belt, Creative has better legal standings when it sues other competitors.

Yes you pay some money out. Usually it's not a small amount, but you create a situation that causes your competitors to pay even more money. It hurts them more than it hurts you. The other thing is that it creates a barrier to entry in the market.

By TP715 on 8/27/2008 2:34:23 PM , Rating: 5
I don't understand. How could making things jiggle be worth $170M? How big is the game controller market? How much $ goes to the jiggle company for each controller just for the "idea" of jiggling?

RE: Huh?
By whynot on 8/27/2008 9:58:23 PM , Rating: 5
If you want proof that things jiggling can be worth lots of money go to any upscale 'gentlemen's club'.

Good investment
By Oregonian2 on 8/27/2008 1:49:21 PM , Rating: 5
I'd assume then perhaps Microsoft's initial payout to Immersion was used to finance Immersion's lawyer fight with Sony. Kind of like a bit of venture capital which they're now "getting back". :-)

By Cunthor666 on 8/27/2008 4:18:07 PM , Rating: 2
This story unfolded like a true Greek Tragedy. But without boobs and dragons :/

RE: Funny...
By Polynikes on 8/27/2008 7:12:26 PM , Rating: 2
Nor swords nor horses, Trojan or otherwise.

By kevinkreiser on 8/27/2008 7:30:15 PM , Rating: 2
i'm glad that finally that patent monger immersion is getting screwed, they deserve it.

RE: good
By MrWho on 8/28/2008 10:30:09 AM , Rating: 2
Screwed? Where? Tell me, I can't find it!

Im stupid
By electriple9 on 8/28/2008 3:48:18 AM , Rating: 2
Why wouldnt Sony allow their own technology in their own controllers.

RE: Im stupid
By ElBrujo on 8/28/2008 4:36:02 AM , Rating: 2
Rumbling is not new, per se. It's _how_ the rumbling is achieved, that makes it (questionably) novel. Ask any electrical or mechanical engineer how to make that happen and you're almost guaranteed to involve a motor in some way. My observation is that Immersion's technology involves a weight that is not counter-balanced, attached to the shaft of a motor. Usually there are two motors, with different weights attached, and activated independently so that one creates lower frequency vibration than another as appropriate to the effect desired. Trying to create the same effect in another way might not be as efficient energy-wise, which is important especially when used in wireless controllers.

In the end even Sony wins because they re-gain a rumble controller that, combined with tilt, makes their controller better than Microsoft's. Everyone who had the old controller will want the rumble function back and are likely to buy controllers to replace their existing ones, meaning that Sony ends up selling controllers for the same console to the same people twice!

who's the devil?
By dome1234 on 8/27/2008 1:21:41 PM , Rating: 3
Part of the settlement stipulations between Microsoft and Immersion stated that if Sony should ever come back and license Immersion's technology to add vibration effects into PS3 controllers, Immersion would pay Microsoft a portion of any settlement received from Sony.

No wonder Sony went all the with litigation in the first seeing how immersion wasn't that confident of their ip.

Very shrewd deal from microsoft, win-win situation!

By BillyAZ1983 on 8/27/2008 3:01:01 PM , Rating: 2
The rumble effects in Microsoft controllers for the Xbox were at the heart of the suit.

Great move on M$'s part! You gotta wonder how Sony feels aboot this move because I'm sure they're not happy! Immersion of course, is laughing all the way to the bank :)

Im stupid
By electriple9 on 8/28/2008 3:48:14 AM , Rating: 2
Why wouldnt Sony allow their own technology in their own controllers.

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