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Microsoft and Immersion settle settlement settlement

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Microsoft and the force-feedback technology firm, Immersion, appear to have come to final terms after six years of suing each other.

In the end, Immersion has agreed to pay $21m to settle its legal dispute with Redmond, and will join Microsoft's Certified Partner Program.

By our count, today's settlement settles a settlement dispute over a settlement. Got that?

Perhaps we should start from the beginning. (And don't let our liberal use of the word "settle" destroy its meaning, as it becomes important shortly.)

In 2002, Immersion filed a patent infringement lawsuit against Microsoft and Sony, claiming the rumble feature in both companies' respective game consoles improperly impinged on their intellectual property.

Microsoft was the first to settle, inking a $26m licensing deal with Immersion and buying a 10 per cent stake in the firm. Microsoft also notably negotiated rights to get a piece of the reward should Immersion also settle its case with Sony.

And Sony eventually did make good with Immersion in March 2007, paying $22.5m to keep using the technology. But in what can only be described as a shining moment in pedantry, Immersion said it didn't settle with Sony, but merely "agreed to conclude their patent litigation at the U.S. Court of Appeals for the Federal Circuit and have entered into a new business agreement to explore the inclusion of Immersion technology in PlayStation format products."

Apparently, this arrangement was much different than "settling." Worlds apart even. Thus, in a filing with the SEC, Immersion stated:

"The Company has determined that the conclusion of its litigation with Sony Computer Entertainment does not trigger any payment obligations under its Microsoft agreements."

Microsoft, understandably, wasn't terribly amused by Immersion's clever wordplay. It then sued Immersion in June 2007 to get the slice of Sony's settlement pie Microsoft believe it deserved.

Immersion then counter-sued, claiming Microsoft breached a confidentiality agreement.

But in the end, Immersion has agreed to pay the piper, resulting in the lawsuit and its counterclaim being dropped. Immersion announced today it will pay Microsoft a one-time fee of $20.75m and will be admitted to Microsoft's partner program.

"We are pleased to resolve our outstanding dispute with Microsoft and to put this litigation behind us," said Immersion president and CEO Clent Richardson. "We now have our full attention and focus devoted to working with innovative companies around the world, including Microsoft, to accelerate and rapidly achieve global adoption of our haptic technology in gaming, consumer electronics, mobility, and medical products."

And yes, Immersion calls the agreement a settlement. Assuming Microsoft can keep a lid on the "other terms," which are described on the Immersion press release as "confidential," we may at last be seeing the end of this litigious ballet. ®

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