Microsoft hit for $26m in Immersion lawsuit

Microsoft has settled a patent infringement suit and received the rights to use Immersion’s technology for providing tactile responses in devices such as joysticks.

Under the deal, Microsoft will pay Immersion $26m for licensing rights and for a stake in the company, Immersion said on Tuesday. Immersion also can borrow as much as $9m more through a convertible debenture arrangement with Microsoft, the company said.

Immersion specialises in so-called haptic technology, which uses the sense of touch to expand interactions between humans and computers. For example, its technology can be used to build a joystick that shudders in a flight simulation game when a player's airplane is shot, or a mouse that thumps slightly so people with poor vision can tell when their cursor is hovering over a clickable button.

Microsoft uses haptic technology in its Force Feedback joysticks. Immersion sued Microsoft and Sony for patent infringement in February 2002 over their use of haptic technology. Immersion said its suit against Sony still is in litigation.

"Microsoft recognises the importance of haptic technology to consumers, the value of Immersion's patent portfolio in this space, as well as Immersion's role as a leading supplier of haptics," Barry Spector, Microsoft's director of business development, said in a statement.

Also on Monday, Immersion announced a net loss of $4.4m for the quarter ended 30 June on revenue of $4.1m.

Shares of Immersion surged late Monday after the deal was announced. In after-hours trading, the stock climbed to $4.75, well above its closing price of $1.85 on the Nasdaq.

Stephen Shankland writes for CNET News.com