Friday, February 11, 2005

...AND FROM THE ASHES ROSE IMMERSION: In the "one for the little guys" column is the great story of Immersion Corp. from San Jose which patented technologies in haptics, which combines software and motors to add a tactile interface to the digital world. Its surgical-training machines reproduce the sensation of inserting a catheter into a vein. BMW uses Immersion's haptics to help drivers fiddle with dozens of functions of their iDrive dash-board knob. Last month Samsung showed off Immersion-enabled mobiles that iden-tify callers by different vibrations and add customized pulsations to games and ring tones.

Founded in 1993 by a group of Stanford and MIT engineers, Immersion financed its early days partly by developing technology the Navy used to feel around the ocean floor for lost submarines. Dreams for haptics as a component in every PC never panned out.

But "vibrotactile" features were becoming common in PCgaming, and Immersion's lock on the technology earned it increasing license revenue on steering wheels and joysticks from the likes of Logitech, Microsoft and MadCatz. In late 2000 gamers started shifting their allegiance to the powerful PlayStation system from Sony, which promoted its vibrating "Dual Shock" controller prominently on the box. Immersion began calling Sony to negotiate a licensing deal. Sony repeatedly declined. Microsoft, openly planning its Xbox for release in late 2001, told Immersion it would not pay unless Sony started paying.

On Feb. 11, 2002 Immersion filed suit against both companies, a move meant to draw attention. That it did: Immersion's stock got savaged, falling 50% in a week, from $4.50 to $2.30. Then litigation began to drag on. Microsoft, which had a decent prior relationship with Immersion, settled in July 2003.

Sony chose to keep fighting. The case went to trial in August in the federal district court in Oakland. However, the jury came back with a verdict on Sept. 21, agreeing that Sony's controllers infringed two Immersion patents, one applied for in 1995 though not issued until 2001. The jury awarded Immersion $82 million in lost licensing revenue, and the judge later ordered Sony to pay Immersion 1.4% of ongoing revenue from its PlayStation 2 system and offending games, a rate that would double Immersion's revenue.

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