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A case pitting two of the biggest names in IP law against each other came to a head Tuesday, when an Oakland jury awarded $82 million to a San Jose company, finding that Sony Computer Entertainment America Inc. infringed two patents. Immersion Corp. sells hardware and software technology that allows users to interact with digital devices, such as computer joysticks and medical procedure simulators. In February 2002, the company filed suit against Sony and Microsoft Corp., alleging that the companies improperly used company technology in their popular PlayStation 2 and Xbox gaming consoles. In a conference call Wednesday, Immersion President and CEO Victor Viegas said the company had sought $299 million in damages. He said Sony had argued that damages should be set at $9.4 million if the jury found Sony Computer Entertainment infringed both patents. Microsoft settled out of the case last year. While disappointed by the amount of the award, Viegas said, “We are pleased the jury held the patents valid and infringed.” The jury also found that Sony had not willfully infringed Immersion’s patents, which would have allowed treble damages. Immersion said it intends to ask the court to grant a permanent injunction against Sony. The damages award relates to U.S. sales of Sony products, including 47 PlayStation games. Both companies pulled in prominent patent litigators to slug it out in court. Morgan Chu, a partner at Los Angeles’ Irell & Manella, represented Immersion. Matthew Powers, a partner at Weil, Gotshal & Manges’ Redwood Shores office, came to the defense of Sony. Chu said the victory is significant for Immersion, while Powers said the suit is not unusual. “It’s a fairly typical case of a small company suing a large company and trying to get a lot of money,” Powers said. He said the PlayStation technology in dispute “is a very small subset of vibrations” that occur in a joystick during a small number of events per game. For example, he said, in “A Bug’s Life,” the ant in the game must jump first on an acorn, which then turns into a mushroom. Powers said the vibration in question occurs only when the ant jumps on the mushroom several times. For Immersion, however, the decision was huge. Chu said the verdict “is about four times” Immersion’s annual revenue. He said that under the Microsoft settlement, Immersion could garner another $35 million. Sony said in a statement that it would appeal the decision. “Patent cases are highly technical and extremely difficult and too often wrongly decided,” Sony said. Immersion has spent $16 million in legal fees and costs since February 2002, with approximately $7 million of that incurred this year, according to the company. Fighting an appeal could cost the company another $1 million. U.S. District Judge Claudia Wilken is now expected to take up a question that was not put before the jury. Sony contends that Immersion failed to inform the U.S. Patent and Trademark Office of relevant prior art that would make one of the disputed patents unenforceable. Following the settlement with Microsoft and the verdict against Sony, Immersion may pursue litigation against other companies. An investor on the conference call asked if Nintendo Co. Ltd. and Sega Corp. could be deemed to be infringers as well. “We are not at liberty to speculate,” an Immersion official said during the conference call, on what impact the outcome of the trial has “on our discussions with other companies.” As for the clash of the intellectual property titans, one lawyer said it’s not for everyone. “It takes a special breed of person to enjoy watching great patent lawyers try a case, and generally that breed of person is ill,” said Harold McElhinny, a patent litigation partner at Morrison & Foerster. “The dramatic skills for openings and cross-examinations don’t appear quite as often in patent cases where the subject matter is colorless. “I have to pay money to have my family come and watch me try a patent case,” McElhinny joked.

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