ruby_onix said:I never said I was an authority on the subject. I just felt like tossing together one complete version since people were arguing over bits and pieces.
Everybody knows that suing Sony is a costly idea that should only be used as a last resort. Immersion apparently had to spend around $30 million of Microsoft's money on legal fees in their attempt to get the $300 million they thought they were owed, and the court brought it down to $90 million. MS expects to get $15-30 million back if Immersion ever gets paid (and some of you see this as a conspiricy, making Immersion the one unwilling to come down). Which means that the date of the lawsuit is obviously not when things started happening. And Immersion has said that they were in unproductive talks with Sony for years.
Unless they knew that Immersion was a poor little nobody who had no chance of winning against them in court.
How much money do you think Immersion had? How much do you think it takes to sue Sony and win (which may not have been their intention with their original blanket lawsuit)?
So which was it?
I wrote the first part before I had read more of Immersion's quarterly filings, the additional information was added via edits. I think it's bullshit to completely edit out an older version of a post, and I didn't want to clutter this thread with a reply to my own post.
You can see that they actually sue MS and Sony at the same time. Feel free to follow the link I provided if you do not believe me. Not bad for a "poor little nobody" - sue two big companies at once, on the same day! (And hell, MS is BIGGER than Sony...)
They actually sued both companies over patent 5,889,672 and patent 6,275,213. The first one appears to be related to their force feedback mouse, as it talks about feedback using a pointing device - what's interesting is that six months later, they withdrew their claims on the 672 patent, probably because it (IMHO - I am not a patent lawyer) has nothing to do with the force feedback in either Sony or MS's controller (it looked like it was related to the force feedback mouse...anyone else ever use one of those things? 15 minutes after I got it, the force feedback was disabled forever...)...and replaced it with a claim against patent 6,424,333.
Source: http://yahoo.brand.edgar-online.com/fetchFilingFrameset.aspx?FilingID=2048712&Type=HTML
And you're wrong about what MS expects to get back.
If Immersion WINS the suit MS gets NOTHING (well, aside from the fact that Immersion stock might get a nice boost if they still are still holding it when the dust settles).
If Immersion SETTLES then MS gets their money back.
If Immersion LOSES then MS gets NOTHING.
Check this out:
On July 28, 2003, the Company announced that it had settled its legal differences with Microsoft and Immersion and Microsoft agreed to dismiss all claims and counterclaims relating to this matter as well as assume financial responsibility for their respective legal costs with respect to the lawsuit between Immersion and Microsoft. The Company continues to pursue its claims of infringement against Sony Computer Entertainment. In the event the Company settles its lawsuit with Sony Computer Entertainment, the Company will have certain obligations to pay certain sums to Microsoft. See Note 10 for further details. If Sony Computer Entertainment were successful in its counterclaims and the Companys patents were deemed invalid and unenforceable, the assets relating to the patents that were deemed invalid would be impaired. For Sony Computer Entertainment to be awarded damages for attorneys fees the court would have to rule that the Company acted with willful disregard and did not perform a proper investigation. The Company currently believes it is remote that a loss may be or has been incurred related to the counterclaims of Sony Computer Entertainment.
Here is Note 10 mentioned above:
On July 28, 2003 the Company issued a press release announcing it had entered into agreements with Microsoft regarding certain license rights under the Companys patents, the settlement of the Companys lawsuit against Microsoft and certain investments by Microsoft in the Companys Series A Redeemable Convertible Preferred Stock and 7% Senior Redeemable Convertible Debentures.
Pursuant to the license agreement, the Company granted Microsoft a world-wide royalty-free, irrevocable license in exchange for $20 million. Under the terms of the Series A Redeemable Convertible Preferred Stock purchase agreement, Microsoft agreed to purchase 2,185,792 shares of Preferred Stock for $2.745, an aggregate purchase price of $6 million. Preferred Stock accrues cumulative dividends at a rate of 7% per year, payable in cash or additional shares of Preferred Stock. Under the terms of the Senior Redeemable Convertible Debentures agreement, Microsoft may purchase up to $9 million debentures accruing interest at 7% per year. No debentures have been purchased to date. The Company is currently evaluating the impact of these agreements on its results of operations and financial condition. Certain provisions of these agreements may preclude revenue recognition in the near term. In the event the Company settles its lawsuit with Sony Computer Entertainment, the Company will have certain repayment obligations including paying Microsoft up to 2.5 times the original purchase price of the Series A Redeemable Convertible Preferred Stock and up to 125% of the amount of any debentures drawn down by the Company as of the settlement date.
And some more details on their agreement with MS:
BECAUSE WE HAVE A FIXED PAYMENT LICENSE WITH MICROSOFT, OUR ROYALTY REVENUE FROM LICENSING IN THE GAMING MARKET AND OTHER CONSUMER MARKETS MIGHT DECLINE IF MICROSOFT INCREASES ITS VOLUME OF SALES OF TOUCH-ENABLED GAMING PRODUCTS AND CONSUMER PRODUCTS AT THE EXPENSE OF OUR OTHER LICENSEES.
Under the terms of our present agreement with Microsoft, Microsoft receives a royalty-free, perpetual, irrevocable license to Immersions world-wide portfolio of patents. This license permits Microsoft to make, use and sell hardware, software and services (excluding certain products (Excluded Products)) covered by Immersions patents. Immersion also granted to Microsoft a limited right, under Immersions patents relating to touch technology, to sublicense certain rights (excluding rights to Excluded Products and peripheral devices) to third party customers of Microsofts or Microsofts subsidiarys operating systems (other than Sony Corporation, Sony Computer Entertainment, Inc., Sony Computer Entertainment of America, Inc., and their subsidiaries (the Sony Entities)). In exchange, for these rights and the rights included in a separate Sublicense Agreement, Microsoft paid Immersion a one-time payment of $20 million. We will not receive any further revenues or royalties from Microsoft under our current agreement with Microsoft. Microsoft has a significant share of the market for touch-enabled gaming computer peripherals and is pursuing other consumer markets such as cell phones and PDAs. Microsoft has significantly greater financial, sales and marketing resources, as well as greater name recognition and a larger customer base, than our other licensees. In the event that Microsoft increases its share of these markets, our royalty revenue from other licensees in these market segments might decline.
Full text: http://yahoo.brand.edgar-online.com/fetchFilingFrameset.aspx?FilingID=2444049&Type=HTML
Now, if you would like to back up YOUR claims, feel free to cite your sources...
What can I say, this is how business works sometimes. If you want to complain about the lack of rumble on the PS3 controller, MS is just as responsible (if not more so, as they removed settling out of court as a viable option for Sony...unless Sony wanted to pay the extra cash to get Immersion out of the poison pill contract) as any of the other parties - the brilliance is that you have to read between the lines to see it. Sue your competitor by proxy, and without any bad press - it's a smart move!
It does suck for us gamers tho