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Microsoft Sues Immersion Over Rumble Deal

Posted by Zonk on from the tit-for-tat dept.

Waaay back in 2003, Microsoft settled with Immersion over the rumble technology found in their Xbox game controllers. Now, Microsoft is filing suit against Immersion, claiming that the company has not paid Microsoft 'based on certain business and IP licensing arrangements.' CNet has the release, and links over to a Seattle PI blog entry with some investigative digging by Todd Bishop. "One provision of the Microsoft-Immersion settlement wasn't reported widely at the time, if at all: Microsoft negotiated rights to a payment from Immersion -- a refund, of sorts -- if Immersion settled its case with Sony ... Here's where the new dispute arises: On March 1, nearly four years after the Microsoft settlement, Sony and Immersion announced that they had 'agreed to conclude their patent litigation at the U.S. Court of Appeals for the Federal Circuit and have entered into a new business agreement to explore the inclusion of Immersion technology in PlayStation format products.' ... while Immersion and Sony have agreed to conclude their patent litigation, they don't use the word 'settlement,' describing it instead as a business agreement."

48 comments

  1. Legal Insanity 101 by MeanderingMind · · Score: 4, Insightful

    Step 1) By some miracle, weasel a provision into your settlement that forces the other company to pay you some money if your biggest competitor also settles.
    Step 2) In a humorous turn of events, watch as the other company reaches a "business agreement" and weasels you out of your money.
    Step 3) People's Court.

    Get out the popcorn, this is going to be the weaseldom battle of the century.

    --
    Thunderclone: ONE MAN ENTERS! TWO MEN LEAVE! ONE MAN ENTERS! TWO MEN LEAVE!
    1. Re:Legal Insanity 101 by Loadmaster · · Score: 1

      Not only did MS pay Immersion 26M to settle they also bought part of the company. The 26M was probably to continue using rumble tech in the Xbox controllers and buying part of the company was to lock Sony out. Seems like a shrewd move on MS' part. Pretty smart now considering.

      Swi

    2. Re:Legal Insanity 101 by Keeper · · Score: 1

      A $26M stake in the company is nowhere near a controlling interest. And their agreement has no provisions to lock Sony out. The lawsuit isn't about keeping Sony from using rumble, it's about being paid ~$27.5m under their contract terms.

    3. Re:Legal Insanity 101 by suv4x4 · · Score: 4, Insightful

      Legal Insanity 101

      Step 1) By some miracle, weasel a provision into your settlement that forces the other company to pay you some money if your biggest competitor also settles.


      If you don't understand the reasons behind this, doesn't mean it's "insanity".

      The story is quite logical and sensible if you read more into it.

      At the time Microsoft was still beginning its entry into the gaming console market. When Immersion sued them, Microsoft's lawyers analyzed the patent and how this applies to XBox and PlayStation2.

      They realized that if Immersion is persistent enough, they'll win out in such a case. But "to be persistent" in the current legal system means you gotta have lots and lots of cache to fund this persistence.

      At the same time Immersion was doing quite bad financially and only had a few million dollars profits for the entire year. They needed cash badly.

      So Microsoft figured: if they offer enough cash to Immersion in a settlement, Immersion will go after Sony next, which sell a lot more PS2, and hence stand to lose a lot more in such a trial.

      But Microsoft has the will, power and money to not do a settlement and protract the case forever, just like they always do. And Immersion knew that as well. Immersion would run out of cash before they could complete the case and end up with empty pockets and a bankrupt company.

      So, Microsoft approached them and said "we won't fight, we'll settle with you, and give you the much needed cash to go after Sony. If you fail with Sony, you keep the cash, but if you get them, you return the cash". Since Immersion would end up with a lot more cash (turns out around 120 million dollars) if it won against Sony, they accepted the deal and had fresh 27 million to proceed with their patent trolling.

      Now that they got Sony, Microsoft wants its cash back, as per their settlement.

      That's all that happened.

    4. Re:Legal Insanity 101 by StikyPad · · Score: 1

      I would probably feel worse if Immersion Corp wasn't a patent troll, claiming that a rumble function violates their patent on haptic technology. If haptic technology is novel and non-obvious (patent-worthy), and if rumble technology is any part of haptic technology, then clearly it is a novel and non-obvious implementation thereof. Sounds like a keyboard patent holder suing a mouse manufacturer for infringement because they're both input mechanisms. But what do I know.. IANAL.

      --
      https://www.eff.org/https-everywhere
    5. Re:Legal Insanity 101 by SethraLavode · · Score: 1

      Apparently, you don't know a whole lot about what you're talking about.

      I hate patent trolls as much as the next person, but I don't think Immersion really qualifies as one. If you check their financials, nearly 60% of their revenue comes from actual product sold, with less than 30% coming from licensing. From their press releases, the licenses appear to be legit, as opposed to SCO-style shakedowns.

      Personally, I hope Nintendo calls up Immersion to talk licensing. They've got a pretty nifty tactile feedback system for touchscreens which would be awesome for the next incarnation of the DS.

    6. Re:Legal Insanity 101 by StikyPad · · Score: 1

      If you're going to attack someone for ignorance, at least specify a legitimate gap in their knowledge. I'll be the first to admit I don't have all the facts in this case, but nothing you said contradicts anything I said.

      nearly 60% of their revenue comes from actual product sold, with less than 30% coming from licensing

      That doesn't mean they aren't trying to leverage their patents beyond the scope of what was covered. I'm sure not everything a pickpocket does is bad either, but that doesn't mean we should overlook the fact that he steals wallets.

      From their press releases, the licenses appear to be legit

      Imagine that.

      For the record, the patents in question are 6,275,213 and 6,424,333, neither of which, if you read the abstracts, seems to apply specifically to the generic rumble function of a controller -- they're both for special circumstances and/or methods to use the function. But here's the kicker: The earliest of those patents was filed in 2001, while the Dual Shock was released in '98, and the Nintendo Rumble Pak was introduced in '97 -- clear examples of prior art, and obviously why every console manufacturer tried to fight the case. Likely the patents were granted because the USPTO decided the patent was unique enough that it didn't pertain to standard rumble controllers, and the jury was too stupid to understand that.

      Of course, I don't know a whole lot about what I'm talking about, so feel free to clue me in.

      --
      https://www.eff.org/https-everywhere
  2. Obligatory quote: by Applekid · · Score: 4, Funny

    Weaseling out of things is important to learn. It's what separates us from the animals... except the weasel.

    --
    More Twoson than Cupertino
  3. Meanwhile... by BlueMikey · · Score: 0, Troll

    My Wiimote rumbles on.

    1. Re:Meanwhile... by morari · · Score: 2, Funny

      With the elongated shape and "Wii" name, you can use the vibration feature for a lot more than anything from Sony and Microsoft!

      --
      "He who can destroy a thing, controls a thing." --Paul Atreides, Dune
    2. Re:Meanwhile... by Anonymous Coward · · Score: 5, Funny

      Gosh, I never thought that the name "Wii" might have a double entendre. Congratulations on your fresh insight, sir.

    3. Re:Meanwhile... by shoptroll · · Score: 1

      Which reminds me of wondering how the hell Sony is having trouble with controller battery life with their new found attempts at rumble.

      --
      Insert Sig Here
    4. Re:Meanwhile... by Dev59 · · Score: 1

      Sony uses an internal battery instead of a pair of AAs.

    5. Re:Meanwhile... by Trogre · · Score: 1

      They should just give up and call their next console, which by then might be able to be considered generation 7, the Nintendo Piss.

      --
      "Nine times out of ten, starting a fire is not the best way to solve the problem." - my wife
    6. Re:Meanwhile... by donaldm · · Score: 1

      Yes but did they pay Immersion for the dubious privilege, especially since they had rumble for their N64 1996/7 as did Sony for their dual-shock 1997 before Immersion got their patent in 2000.

      --
      There ain't no such thing as proprietary standards only proprietary formats. Standards are by definition open.
    7. Re:Meanwhile... by MorpheousMarty · · Score: 1

      I am simply going to give you credit for wit of the driest caliber. You Anonymous Coward

  4. Enough is enough... by mulvane · · Score: 1

    Maybe as part of these massive lawsuits that keep happening a federal provision should be setup that say 20% of all winnings in a lawsuit go to educational funds.

    1. Re:Enough is enough... by BosstonesOwn · · Score: 1

      All that will manage to do is make them sue for more to make up for the loss.

      How is it something like this would be snuck into a deal ? Did they just want the cash from MS and didn't look at the future ? bad lawyers maybe ? who in their right mind would let that go by ?

      --
      This package Does Not Contain a Winner
    2. Re:Enough is enough... by PresidentEnder · · Score: 1

      Please- throwing money at education is not the solution. Poorly-performing inner city public shools receive more money per head than well-performing private schools. Besides, building in additional expense would just increase the cost of the lawsuit. If you're hoping to discourage massive lawsuits in general, this is a bad way to do it. If you're trying to discourage only the frivolous sort, you should realize that while this is slashdot and Microsoft is evilbadsuperdumb, they might well have a legit case.

      --
      I used to carry a bottle of whiskey for snake bite. And two snakes. -Nefarious Wheel
    3. Re:Enough is enough... by twistedsymphony · · Score: 2, Interesting

      What about a system where the Plaintiff pays in full for the defendants legal fees as well as the court fees if the defendant is found not guilty?

      That would have the benefit of plaintiffs not bringing frivolous lawsuits to court, less they risk losing a bit of money themselves. Not only that it would remove the burden of court costs from the tax payers and place it on those who would bring ridiculous lawsuits to court.

      --
      Collector's Edition
    4. Re:Enough is enough... by WNight · · Score: 1

      That's just as bad in the other direction - then nobody can afford to sue anyone larger than them in case they'd lose.

      I'd say that we should split costs, especially if one party is much larger than the other. Contribute an equal percentage of your total assets, split it down the middle.

      The concept of the parties paying was so that society wouldn't have to foot another bill. Really it looks like that was a false savings. If we'd pay the costs up front and fine both parties according to guilt for what they can bear. My taxes would be higher, but I wouldn't be looking at bankruptcy as the only likely outcome from any lawsuit, warranted or otherwise, with a large corporation. As is, the courts are nearly useless to me against anyone much larger.

    5. Re:Enough is enough... by Chris+Burke · · Score: 1

      Yeah, and it would also prevent anyone of meagre means from bringing a legitimate suit against a wealthy defendent, lest they be forced to pay astronomical court fees. "Legitimate" is not the same thing as "guaranteed to win", especially since the latter doesn't exist.

      Would you risk paying Sony's legal fees? No matter how legitimate your beef may be, can you be sure you can beat their high-priced lawyers? And can you risk having to pay for those high-priced lawyers? Especially when we've just given them every incentive to spend as much on those lawyers as possible (because if they win the lawyers are free)? Or would the very fact that they have a million-dollar legal team prevent you from filing in the first place?

      "Loser pays" is a bad idea. Always has been, always will be.

      --

      The enemies of Democracy are
    6. Re:Enough is enough... by darkwhite · · Score: 1

      What about a system where the Plaintiff pays in full for the defendants legal fees as well as the court fees if the defendant is found not guilty? Have you been living under a rock? This is exactly how the US system has been working for a while (in most cases, the judge forces the plaintiff to pay the court's and defendant's expenses if the plaintiff loses). This hasn't been anywhere near effective in stopping civil lawsuit abuse.
      --

      [an error occurred while processing this directive]
    7. Re:Enough is enough... by LKM · · Score: 1

      Poorly-performing inner city public shools receive more money per head than well-performing private schools.

      They probably also need a whole lot more, given that they can't choose their students, often have students from disfunctional families, and have to get teachers to teach under these conditions.

    8. Re:Enough is enough... by PresidentEnder · · Score: 1

      And when they get more money, does their performance improve?

      --
      I used to carry a bottle of whiskey for snake bite. And two snakes. -Nefarious Wheel
    9. Re:Enough is enough... by MBraynard · · Score: 1
      No, it doesn't. You can't buy character. Districts that pay the most money have the worse results and where in the same area there are private/parochial schools with similar demographics (black, poor, fatherless) that succeed with a fraction of the money per student. DC is the best example - two thirds of all PUBLIC school teachers send their children to private schools.

      There are a lot of reasons why schools - public and private - fail. They usually get the least intelligent people, on average, as teachers as demonstrated by teaching school admittance examinations. And the public schools are actually a functionary not of education in most municipalities but as a jobs program for the Democrat party which run the city and school district in every single major urban area.

      But underlying all of this is most parent's genuine disinterest in their children's education and their misplaced trust in the education system. If they paid attention to it like they did to, I don't know, their favorite professional sports team or their favorite TV show, they might recognize the inherently anti-human, anti-individual design of the modern, mass-production education method and instead take personal responsibility for their children's education and work with other parents with similar interests to help cover subject matter where they lack expertise.

      It's a radical idea to most but it is also the most natural and now - due to the number of parents with college degrees and the ability to leverage technology like the internet to custom design programs to a child's individual needs - increasingly feasable.

    10. Re:Enough is enough... by LKM · · Score: 1

      Yes, because they can hire more teachers and make the classes smaller, which improves the situation tremendously.

    11. Re:Enough is enough... by PresidentEnder · · Score: 1

      Evidence? 'Cause I've got mine. Just because something makes sense at first glance (more money == better schools! smaller classes == better performance!) doesn't make it true.

      --
      I used to carry a bottle of whiskey for snake bite. And two snakes. -Nefarious Wheel
  5. Conflicts of Interest? by strider2k · · Score: 1

    IANAL but isn't it some sort of conflicts of interest? Wow, I am surprised how low M$ will go the outdo Sony.

    --
    Every geek has some sort of website, programming or computer project. Here's mine: www.youtasteit.com . What's yours?
    1. Re:Conflicts of Interest? by Keeper · · Score: 1

      Conflict of interest for what? Seriously, I'm curious what derranged explanation you can come up with...

    2. Re:Conflicts of Interest? by strider2k · · Score: 1

      I guess I'll keep my mouth shut since even I couldn't think of a valid response. But, it just seems wrong since we have 2 rival companies competing in the video game industry and one (M$) attempted to leverage Immersion hurt Sony.

      --
      Every geek has some sort of website, programming or computer project. Here's mine: www.youtasteit.com . What's yours?
  6. WTFPATENTED by revengebomber · · Score: 2, Insightful

    All this shit *should* be meaningless anyway. Patenting a rumble function? Brilliant! While we're at it, let's also grab disc-based game streaming technology, replacable human interface mechanisms, and multiple-resolution selectable display output.

    --
    09 F9 11 02 9D 74 E3 5B D8 41 56 C5 63 56 88 C0
    45 5F E1 04 22 CA 29 C4 93 3F 95 05 2B 79 2A B2
    1. Re:WTFPATENTED by BoChen456 · · Score: 1

      Immersion patented a specific method for causing haptic feedback. Namely using a rotating off-centred mass to cause a device to vibrate and give feedback to the user. This is a perfectly legitimate patent for a new mechanical contraption.

    2. Re:WTFPATENTED by sYkSh0n3 · · Score: 2, Insightful

      Namely using a rotating off-centred mass to cause a device to vibrate


      it's hardly original tho. My washing machine does that all the time.
    3. Re:WTFPATENTED by laffer1 · · Score: 1

      Your washing machine fits into a game controller?

      --
      MidnightBSD: The BSD for Everyone
    4. Re:WTFPATENTED by LordVader717 · · Score: 2, Interesting

      Those things have been around since before Immersion Corp existed. If I remember correctly, their patent amounted to "put two vibrators in a gaming controller", and that's the reason Nintendo didn't get sued: they used one.

    5. Re:WTFPATENTED by Anonymous Coward · · Score: 0

      disc-based game streaming technology, replacable human interface mechanisms, and multiple-resolution selectable display output.
      I am willing to bet they are all patented one way or another.
  7. Good by GWLlosa · · Score: 2, Insightful

    I don't see the problem here. Microsoft and Immersion signed a contract that said "If the Immersion case with Sony is settled, Immersion pays Microsoft $XXX". They then settled their case, but chose to call it something other than a settlement. As long as the word 'settle'/'settlement' has a legally definable meaning, and that meaning covers the 'business arrangement' between Sony and Immersion, then Microsoft is owed money. There's nothing insidious or underhanded about it. If Immersion doesn't like it, they should have either not settled or not agreed to those terms in the first place.

    1. Re:Good by king-manic · · Score: 1

      I don't see the problem here. Microsoft and Immersion signed a contract that said "If the Immersion case with Sony is settled, Immersion pays Microsoft $XXX". They then settled their case, but chose to call it something other than a settlement. As long as the word 'settle'/'settlement' has a legally definable meaning, and that meaning covers the 'business arrangement' between Sony and Immersion, then Microsoft is owed money. There's nothing insidious or underhanded about it. If Immersion doesn't like it, they should have either not settled or not agreed to those terms in the first place.

      It all hinges on the definition of the word "settlement". So their going to dance around the semantics of that particular word.

      --
      "There are more things in heaven and earth, Horatio, than are dreamt of in your philosophy."
    2. Re:Good by Dev59 · · Score: 1

      Sony didn't settle their case... they lost it.

    3. Re:Good by DeeDob · · Score: 2, Informative

      I agree 100% with you.

      I'm no U.S. law expert, but I thought that Microsoft gained something like 20% shares of Immersion during their agreement too. If so, Microsoft should be entitled to part of the settlement between Immersion and Sony... This settlement becomes "profits" for Immersion to which Microsoft is entitled an amount at LEAST based on their number of shares.

    4. Re:Good by Keeper · · Score: 1

      You're definately not a us law expert, and you've obviously never invested any money in stocks.

      Company profits don't have to be distributed to shareholders. Microsoft is entitled to a dividend if Immersion pays one out to share holders, but share holders aren't entitled to money Immersion decides to put in the bank.

      The Sony settlement triggered a provision in the Microsoft settlement. End of story. This is completely unrelated to any Microsoft holdings of Immersion shares.

    5. Re:Good by Keeper · · Score: 1

      It's going to be a short dance. From a legal dictionary:

      "The term settlement is also applied to an agreement by which two or more persons, who have dealings together, so far arrange their accounts, as to ascertain the balance due from one to the other; and settlement sometimes signifies a payment in full."

  8. Mod parent up by Mr+Chund+Man · · Score: 1

    Inspiring!

  9. Sometimes.. by rav64 · · Score: 1

    This is the elusive no. 2 we've been looking for!

    1) Settle a lawsuit for infringing on a patent
    2) Wait and watch as the company you gave money to gets money elsewhere and breaches the hidden agreement you actually managed to sneak in
    3) Profit! (or atleast recoup some of the original cost)

    Alright, so it wasn't a perfect plan. But holy crap, this made my whole day.

    Thanks Microsoft!

  10. Shows you how evil Microsoft is by Anonymous Coward · · Score: 0

    Microsoft hurts the gaming community in general. They actually tried to prevent rumble from going to a competitor.

  11. Spoken like a true Socialist by Anonymous Coward · · Score: 0

    Go back to Cuba, ya' socialist.

    Always trying to spend other people's money.