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Immersion Settles With Microsoft Over Xbox Controller

San Jose-based Immersion has agreed to pay $20.75 million to settle a legal tangle with Microsoft over the 'rumble' feature of its Xbox game console controllers.

SAN JOSE, Calif. (AP) -- Immersion Corp. has agreed to pay Microsoft Corp. $20.75 million to settle a legal tangle that started with a suit against Microsoft over the "rumble" feature of its Xbox game console controllers.

San Jose-based Immersion sued Microsoft in 2002, alleging that the Xbox controller infringed on a patent for force feedback, Immersion's specialty. The Xbox controller shakes when triggered by a game event, like a car driving over a speed bump. Microsoft agreed to pay Immersion $26 million to settle the lawsuit.

Immersion also sued Sony Corp., which makes the PlayStation game console. That suit was resolved in March last year, when the electronics maker agreed to pay Immersion $22.5 million over three years, plus more than $100 million in costs, royalties and patent license fees.

Immersion's agreement with Microsoft contained a clause requiring it to hand over a slice of any settlement with Sony -- a minimum of $15 million, plus percentages of any amount over $100 million. Immersion said the agreement with Sony did not trigger that clause, but Microsoft disagreed, and filed suit last year in the U.S. District Court for the Western District of Washington.

Immersion counterclaimed that Microsoft breached a confidentiality agreement.

Both the Microsoft suit and Immersion's counterclaim have now been settled, Immersion said.

"We are pleased to resolve our outstanding dispute with Microsoft and to put this litigation behind us," said Immersion president and chief executive Clent Richardson.

"We are pleased to have reached a resolution to our legal dispute with Immersion that includes a $20.75 million payment to Microsoft," Steve Aeschbacher, an associate general counsel for Microsoft, in a statement. "We are gratified that we have successfully resolved our claims under the 2003 settlement we negotiated with Immersion, which provided benefits to both companies and specific rights to Microsoft."

Immersion shares rose 8 cents to $6.55 in extended trading after the announcement.

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