"Haptics" is the science of touch that lets you interact with your computer's virtual world. Feeling the bone-jarring vibrations through Logitech's (Nasdaq: LOGI ) force-feedback Driving Force Pro steering wheel as you careen over the rutted terrain in Gran Turismo 4 is an example of the technology at work. While it has other uses -- doctors can train using virtual surgery, for example -- gaming is where most people will encounter haptics.
Sony (NYSE: SNE ) , unfortunately, is encountering it in court these days. The electronics giant was ordered to pay $91 million to tiny tech company Immersion (Nasdaq: IMMR ) and was also ordered to stop selling its PlayStation gaming consoles in the U.S. because they infringe on Immersion's patents. While the supply of PlayStations won't dry up any time soon since the order has been stayed pending an appeal, it could be represent a big payday for the small company. The judgment would total more than the company has made for the past four years combined.
Immersion is no stranger to taking on behemoths to enforce its patents. At the same time it sued Sony, it also sued Microsoft (Nasdaq: MSFT ) for infringing on its patents with its Xbox console. Bill Gates ponied up $26 million to settle the lawsuit, and agreed to invest in Immersion as well as loan it an additional $9 million. Immersion sought more from Sony because its platform is more popular and widespread, and to cover the extensive legal costs the company has experienced from the litigation. Still, if the ruling is upheld or a settlement is reached between the two, Sony will be getting a bargain. Immersion usually realizes a royalty of 5% from the licensing of its technology and the judgment only amounts to what would be a 1.4% royalty.
Immersion is not completely dependent upon gaming, though. While it licenses its technology to Logitech, Sony, Microsoft, and MadCatz (AMEX: MCZ ) for game consoles and PCs, it also licenses it to Samsung for use in cell phones, partners with Medtronic (NYSE: MDT ) for surgical simulations, teams up with various auto manufacturers for assorted cockpit control features, and offers industrial, three-dimensional product-creation technologies. However, the company's computing segment does account for the vast bulk of its revenues, comprising more than 50% of the total.
Immersion's stock jumped 10% on the news yesterday while Sony's didn't register a blip, sensing perhaps investors' feel for the judgment on the prospective outlook for each. Gaming, it turns out, hasn't been the panacea Immersion was looking for, and haptics may just be a haphazard technology for the general public.
Fool contributor Rich Duprey often takes a haphazard approach to his life. He does not own any of the stocks mentioned in the article.