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Microsoft coughs up $26m to settle case

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CIOL Bureau
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SEATTLE: Immersion Corp., a maker of technology that lets users interact with computers through the sense of touch, said on Monday that Microsoft Corp. had agreed to pay it $26 million in licensing fees to settle a lawsuit.

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Immersion's share price more than doubled after the announcement.

Microsoft, the world's largest software maker, will also make an equity investment in San Jose, California-based Immersion, the company said in a statement.

Immersion sued Microsoft in February 2002, for patent infringement and also has a lawsuit pending against Sony Corp.'s video game unit and its U.S. subsidiary.

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Video games, as well as virtual reality games, often use vibration and feedback to enhance the realism of games.

Microsoft, which makes the Xbox video game machine that competes with Sony'S PlayStation 2 console, will now be able to use Immersion's haptic (sense of touch) technologies its software, product and services, Immersion said.

Immersion said the agreements "grant Microsoft licensing rights for Immersion's patent portfolio, which is primarily directed to haptic technologies (the sense of touch)."

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"They (Microsoft) are an ideal partner to help demonstrate the value and benefits of haptic technologies to consumer markets such as personal computers, games and handheld devices," Victor Viegas, President and Chief Executive of Immersion, said in a statement.

Immersion said that Microsoft would pay it $26 million for licensing rights, make an equity investment and also lend the smaller technology company up to $9 million in convertible debt.

Immersion also released financial results for the second quarter on Monday that showed a net loss of $4.4 million, or 22 cents per share, on revenue of $4.1 million.

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Viegas said that the agreements with Microsoft would net the company a total of $35 million.

Immersion shares rose to $4.75 in after-hours trade after the financial results and agreement with Microsoft was announced, from their close of $1.85 on Nasdaq.

© Reuters

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