Microsoft Sues Immersion Over Rumble Deal

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."

Comments

Legal Insanity 101

[MeanderingMind]

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.

Re:Legal Insanity 101

[suv4x4]

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.

Obligatory quote:

[Applekid]

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

Re:Meanwhile...

[morari]

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

Re:Meanwhile...

[Anonymous Coward]

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

WTFPATENTED

[revengebomber]

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.

Re:WTFPATENTED

[sYkSh0n3]

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.

Re:WTFPATENTED

[LordVader717]

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.

Good

[GWLlosa]

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.

Re:Good

[DeeDob]

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.

Re:Enough is enough...

[twistedsymphony]

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.