Microsoft claims that Immersion has not lived up to the terms of settlement of a lawsuit brought against Microsoft by Immersion in 2003. In that suit, Immersion sued both Microsoft and Sony for patent infringement, saying that the feedback technology at use in the Xbox and PlayStation consoles infringed upon the company's patents. In the settlement, Microsoft agreed to pay $26 million for licensing rights as well as a stake in Immersion and other provisions, including a sublicense agreement that requires Immersion to pay Microsoft a sum of cash dependent upon its eventual settlement with Sony. Microsoft is claiming that this sublicense has been breached.
Microsoft Associate General Counsel Steve Aeschbacher said, "We entered into a binding licensing agreement with Immersion and are seeking to have that agreement honored. Microsoft licenses technology both in and out and relies on these agreements to be honored and enforced. Our request to the court is that all companies and industry partners should play by the same rules and that the binding agreement we signed with Immersion be honored."
A press release filed by Immersion in response to the lawsuit said, "Immersion believes that it is not obligated under the sublicense agreement with Microsoft to make any payment to Microsoft relating to the conclusion of its litigation with Sony Computer Entertainment. Immersion intends to defend this lawsuit vigorously." On March 1, Sony and Immersion announced the litigation between them had reached a "conclusion."