Immersion had drawn Microsoft's ire by violating a 2003 settlement, when Immersion simultaneously sued Microsoft and Sony for their use of Immersion's patented force-feedback technology in the Xbox and PlayStation 2, respectively. According to the terms of that settlement, Microsoft was promised $15 million in the event that Immersion settled with Sony as well.
Much later, in 2007, Sony and Immersion did settle, prompting Microsoft to ask for its $15 million. Immersion refused to pay, and a lawsuit ensued.
It appears that Immersion has now elected to pay up, but at a price: today's settlement resulted in Immersion making a one-time payment of $20.75 million to Microsoft and enrolling in Microsoft's Certified Partner Program, effectively making Immersion a customer of Microsoft. Other terms to the settlement are confidential.
An Immersion spokesman said of the settlement: "Immersion is pleased to resolve the litigation and can fully focus on working with companies, including Microsoft, on adoption of its haptic technologies."