Immersion pays Microsoft $20.75M: The tech industry has to give up its addiction to litigation

This story is so complicated that it's difficult to explain in a simple blog post. But we're going try. Yesterday Immersion Corp. said that it will settle a lawsuit with Microsoft by paying Microsoft $20.75 million. Interestingly, it was Immersion that originally sued Microsoft in 2002, claiming that the Xbox "rumble" feature infringed on its touch technology patent. (The Xbox controller shakes in response to events onscreen.) Microsoft agreed to pay Immersion $26 million to settle the suit. BUT because Immersion was also suing Sony over violating its patent with PlayStation, the Microsoft agreement contained a biting little clause. If Immersion won its suit with Sony, Microsoft wanted a cut -- it wanted Immersion to pay to Microsoft a portion of its settlement winnings with Sony.

Immersion won a huge settlement with Sony, $22.5 million over three years, plus $100 million in royalties and other fees. Immersion then said that its win with Sony didn't mean it owed Microsoft anything. So Microsoft did what high tech companies do -- it sued. Immersion counter-sued, saying that Microsoft's suit violated a confidentiality agreement. (If we're reading that one right, Microsoft wasn't supposed to tell anyone about the contract, not even the court when the contract was not upheld? And no wonder -- the deal between Immersion and Microsoft was slimy.)

But now the two have settled, Forbes reports. Microsoft won its money -- $20.75 million -- from Immersion. And Immersion will be stamped as a member of the Microsoft’s Certified Partner Program. With partners like that, who needs enemies?

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