Microsoft has licensed patents on technology from Immersion that lets a user interact with a computer through the sense of touch, and invested in the company as part of a legal settlement.
Microsoft will pay Immersion $US20 million for a perpetual patent license and invest $US6 million in the company, Immersion president and chief executive officer, Victor Viegas, said.
The investment gave Microsoft a stake of just under 10 per cent in Immersion, he said.
Additionally, as part of the settlement Immersion had the right to take out a $US9 million loan from Microsoft and pay that back in shares, Viegas said.
Immersion sued Microsoft and two Sony subsidiaries in February last year over their alleged use of Immersion's "haptic" technology in Microsoft's XBox and Sony Computer Entertainment's PlayStation and PlayStation 2, as well as associated games and devices.
Haptic technology lets users receive touch feedback from devices such as game controllers. Immersion licensees included Logitech and Apple Computer, as well as companies in other industries, such as car manufacturer BMW, the compnay said.
The settlement is part of Microsoft's effort to get its legal woes behind it, Microsoft spokesman, Jim Desler, said. "We contended all along that we developed our own technology in this area," he said. "However, we wanted to avoid the uncertainty and risks of the legal process."
Immersion's case against Sony Computer Entertainment and Sony Computer Entertainment of America continues and was scheduled to go to trial unless it is settled before then, Viegas said.
A jury trial in the case has been set for April 12, 2004, in the US District Court for the Northern District of California in Oakland, he said.