EXHIBIT 99.1
IMMERSION CORPORATION
MODERATOR: VICTOR VIEGAS
SEPTEMBER 22, 2004
3:30 PM CT
Operator: At this time I would like to welcome everyone to the Sony
Litigation conference call. All lines have been placed on
mute to prevent any background noise. After the speaker's
remarks there will be a question and answer period.
If you would like to ask a question during this time,
simply press star, then the 1 on your telephone keypad. If
you would like to withdraw your question, press the pound
key. I would now like to turn the conference over to Mr.
Victor Viegas, Immersion's President and CEO and CFO. Sir,
you may begin.
Victor Viegas: Thank you (Marcus). Good afternoon ladies and gentlemen.
I'm pleased to welcome you to this conference call
regarding the recent favorable jury verdict and damage
award in Immersion's litigation against Sony Computer
Entertainment, Inc. and Sony Computer Entertainment of
America, Inc.
Our press release announcing the verdict is available at
our Web site, www.immersion.com. Joining me on today's
call is Patrick Reutens, Immersion's Senior Vice President
of Corporate Development and Legal Affairs.
A replay of today's call may be accessed until September
26, 2004 by dialing 800 642-1687 and entering reservation
number 60353. A replay of this call will also be archived
and available on our Web site for one year.
All statements made during this conference call that are
not statements of historical fact constitute
"forward-looking statements" and are made pursuant to the
Safe-Harbor Provision of the Private Securities Litigation
Reform Act of 1995. Actual results could vary materially
from those contained in forward-looking statements.
Factors that could cause actual results to differ
materially from those in the forward-looking statements
are described in our reports on Form 10-Q and Form 10-K,
as filed with the Securities and Exchange Commission.
We recognize that many of you have questions regarding the
outcome, future steps in the legal process, and how this
verdict affects Immersion's business. Today I will be
taking questions regarding yesterday's announcement, but I
will not be able to discuss or answer questions on matters
relating to the continuing legal process or speculative
questions. These subjects include: analysis of Sony's
defense in the trial; speculation on Sony's intentions,
plans or possible future actions; speculation regarding a
settlement; any future possible effect of the verdict on
any other companies; questions regarding the nature of any
possible appeal; performance of either parties witnesses;
or evaluation of legal theories advanced by either side.
I will also not be discussing Immersion's specific
business conditions or results. Our next scheduled
conference call to discuss Immersion's third quarter
financial results is currently scheduled to be October 25.
For those of you who are new to Immersion, I thought I
would provide you with a brief overview of our business.
We are a leading provider of haptic technology that brings
the sense of touch to a wide variety of markets. We
develop, manufacture, and license and support a wide range
of hardware and software technologies that let users
interact with digital devices using their sense of touch.
We focus on four application areas -- medical simulation,
computer and console gaming, mobility, and automotive. In
markets where our touch technology is a small piece of a
larger system (such as mobile phones, consumer gaming
products, and automotive interfaces), we license our
technologies to third party manufacturers who integrate
our technology into their products and resell it under
their own brand names.
In other markets, where our touch technology is a complete
system (like medical simulation systems, and
three-dimensional and professional products), we
manufacture and sell products under our own Immersion
brand name through direct sales, distributors, and value
added resellers. In all market areas, we also engage in
development projects for third parties and government
agencies, from time to time.
Our objective is to proliferate our technologies across
markets, platforms, and applications so that touch and
feel become as common as color, graphics, and sound in
modern user interfaces.
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Immersion and its wholly owned subsidiaries hold more than
230 issued patents and more than 270 pending patent
applications worldwide, covering various aspects of
hardware and software technologies.
Our focus is revenue growth that leads to sustained
profitability. We recently expanded our sales and
marketing team and are executing initiatives to perform
the following:
1) Launch our medical simulator products, expand our
customer base, and increase penetration in our installed
base. We are already the leader in medical simulation with
more than 1,000 systems installed worldwide, but many more
healthcare facilities and teaching hospitals can benefit
from using our products.
2) Close new deals with mobile phone manufacturers,
content providers, and carriers, providing them with new
revenue opportunities and potential replacement hardware
sales.
3) Expand our automotive business with both development
contracts and platform design wins across a broader range
of mainstream vehicle classes.
While litigation expense has been a burden on our mission
to achieve profitability, we are looking forward to
resolving the litigation with Sony.
Now, I will start the litigation discussion by summarizing
the trial background and outcome. The case involved
Immersion's allegation that Sony Computer Entertainment
America, Inc. (SCEA) and Sony Computer Entertainment, Inc.
(SCEI, the Japanese parent of SCEA) infringed 16 claims in
two of our patents, U.S. Patent Number 6,275,213 and
6,424,333, relating to vibro-tactile technologies. The
case was filed on February 11, 2002 in the U.S. District
Court for the Northern District of California. The case
has been pending before United States District Judge
Claudia Wilken.
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The jury trial began on August 16, 2004. The jury was
composed of nine people -- six women and three men. A
unanimous jury decision was required. I am pleased to
report that on September 21, the jury returned a verdict
in favor of Immersion.
I'd like to address what the jury was asked to decide, and
what they did in fact decide, as indicated on the verdict
form. As background, the systems and methods alleged to
infringe in this particular case were the systems
comprising Sony PlayStation consoles, Dual Shock
controllers, and a list of 47 PlayStation games.
The jury was asked to look at questions of infringement,
validity, and damages. On infringement, the jury was asked
a series of 13 questions relating to the two patents.
Summarizing, the jury was asked:
1) Whether Immersion had proven that it was more likely
than not that one or more of its patent claims covered the
PlayStation consoles and Dual Shock controller, in
conjunction with one or more of 47 games, accused in this
case.
2) Whether SCEA and SCEI directly infringed or induced
infringement.
3) What specific claims were infringed.
The jury found that Sony infringed all the asserted claims
of U.S. Patent Numbers 6,275,213 and 6,424,333. The jury
also was asked a series of questions relating to whether
Sony had proven that the asserted claims of the two
patents were invalid.
Because patents are presumed valid under the patent laws,
it was up to Sony to prove the claims were invalid. Sony
contended the patent claims were invalid under three
different theories called anticipation, obviousness, and
for certain claims, lack of written description.
The jury decided that all the asserted claims were valid.
If the jury found any claim of the two patents to be valid
and infringed, the jury was asked to decide the amount of
reasonable royalty damages to be awarded Immersion. The
jury awarded damages to Immersion in the amount of $82
million.
Finally, the jury was asked to decide if SCEA or SCEI
willfully infringed the patents. This is a separate
question because willfulness is a factor that can be
considered by the Court in deciding whether to increase
the amount of damages. The patent laws allow the Court to
increase damages up to three times, but this is a matter
in the discretion of the Court. The jury found no willful
infringement on the part of SCEA or SCEI.
During the trial, Sony argued that, if it was found to
infringe and the claims were valid, the damages should be
$9.4 million, or $5 million if it only infringed the `333
patent, which issued in July of 2002.
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Immersion requested damages in the amount of $299 million.
While the jury's award of $82 million is less than the
amount we requested, we are pleased that the jury held the
patents valid and infringed. The jury does not comment on
their decision other than through their answers on the
verdict form, which I have just now summarized.
There are additional remedies that Immersion intends to
pursue. Immersion will seek a permanent injunction to
prevent further infringement. This will be a matter
presented to the Court. Even if Immersion is successful in
obtaining an injunction, we expect that Sony would seek to
stay the effect of an injunction, pending the outcome of
appeals.
Immersion also intends to ask the Court to award
"pre-judgment interest" on the damage amount. This could
increase the damages awarded to Immersion.
You may have a question regarding whether Sony will have
to pay Immersion's legal fees. The jury's decision does
not include any award of attorney's fees. This is not a
matter that the jury decides, so there is no award of any
attorney's fees in the verdict. The patent laws allow the
Court to award "reasonable attorney fees" in what are
called "exceptional cases." While it is unusual for
attorney fees to be awarded, Immersion intends to
vigorously pursue all remedies that are available. I, of
course, cannot predict how the Court will rule on future
issues that may be presented.
Although the trial was open to the public, the transcripts
of the testimony are not posted. Copies of the transcripts
of any particular session from the trial can be purchased
from the Court Reporter at the U.S .District Court for the
Northern District Court of California in Oakland.
Overall, we are pleased that the jury has agreed with our
position on the merits of our patent rights.
I will now describe the possible next steps in the legal
process. The next step in the legal process that we expect
is that the parties will file motions, which I understand
are referred to as post-trial motions, challenging the
jury's decision.
I note that Sony also is asserting that the `333 patent is
not enforceable because of alleged inequitable conduct
during the prosecution of that patent. There is one narrow
issue remaining that will be heard solely by the judge, in
a manner and on a schedule that the Court will determine.
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When the post-trial motions and other issues are resolved,
the Court will enter a judgment. We expect this process to
last up to 90 days.
As far as timing, a notice of appeal needs to be filed
within 30 days after the judgment is entered. The appeal
would be heard by the United States Court of Appeals for
the Federal Circuit in Washington D.C.
This is the court that hears all appeals in patent cases.
Appeals from the Federal Circuit could then be made to the
Supreme Court of the United States. However, the Supreme
Court only hears appeals in cases in which it decides to
hear the case.
The appeals process typically involves preparing the
record from the proceedings in the trial court, briefing
by both parties, and then argument before a panel of three
judges. The time frame for an appeal varies from case to
case, and it is our understanding that the typical
timeframe is 12 to 18 months, but it could be longer or
shorter depending on a number of factors.
The Appellate Court could find that the District Court
erred as a matter of law or that there was insufficient
evidence to support the judgment, and may remand the case
back to the District Court for further proceedings,
consistent with the Appellate Court's decision.
If Sony wishes to stay the effect of a judgment, Sony will
need to post a bond. The amount of the bond is a matter
for Judge Wilken to decide.
I will now take questions, but please let me remind you
that I will not be discussing Immersion's financial
performance or business conditions. And I will not be able
to answer questions on subjects including matters relating
to the continuing legal process or speculative questions
identified earlier.
(Marcus) please open the call for questions.
Operator: Thank you. At this time I would like to remind everyone,
if you would like to ask a question, please press the
star, then the 1 on your telephone keypad. We will pause
for just a moment to compile the Q&A roster. Your first
question comes from (Ken Hagen) with Lakeside Capital.
(Ken Hagen): Hi, Vic, congratulations.
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Victor Viegas: Thank you (Ken).
(Ken Hagen): A couple questions. Now that you have won this case, is it
fair to say that the validity of the patents can't be
contested by any other third party?
Victor Viegas: Clearly, there were two patents at issue in this case, and
they were found to be valid by this jury. That gives us
quite a bit of confidence. We've always had confidence in
our patent portfolio. But in particular, this one has been
tested by Sony, and they were declared valid. So we think
it's a very important step. And we think it's one that
validates the balance of our patent portfolio.
(Ken Hagen): Yes, because I would think it would be -- any
other party would be stopped from making the same claims
against that patent. Second thing is on damages -- those
were calculated -- the damages that were before the jury
did not include foreign sales of Sony products. Is that
correct?
Victor Viegas: That's correct. The patents that we brought into
suit -- the two patents -- were U.S. patents only. And so
this particular case is about the U.S. infringement of
those two patents.
(Ken Hagen): So, the damages that were calculated were in my
recollection August of '01 through what time period?
Victor Viegas: Our data and our damages expert had information through
June 30 of 2004.
(Ken Hagen): Okay, so that $82 million doesn't include damages after
June `till the current date.
Victor Viegas: That's correct, nor does it address future damages for any
continuing shipment of infringing products.
(Ken Hagen): Or foreign sales, I guess, as well. And the prejudgment
interest that's about 1.5% a month? Is that how it was
being calculated? I know it wasn't before the jury, but is
that your understanding as to what the right amount is?
Victor Viegas: I understand that to be the standard rate that Immersion
and Sony would charge for delinquent payment. So it's the
position that I believe we will be taking with the judge.
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(Ken Hagen): If I could just do the calculation, that's about a little
north of $20 million in additional damages or proceeds
that would be due the company.
Victor Viegas: Potentially. I think there are issues about the rate, the
timeframe, and so on. But that's something that I can't
really speculate on, other than that we will be
aggressively pursuing something in that order.
(Ken Hagen): And last question, all the proceeds, when they're
collected, will go to use as something in the Microsoft
settlement that was required any proceeds due to
Microsoft.
Victor Viegas: That's not correct. The current verdict of damages at $82
million, I believe it is safe to say, that it may lead to
settlement discussions between Immersion and Sony. If the
two parties were to settle the matter, then the payment
under a settlement agreement would be subject to a
repayment obligation that we have with Microsoft.
And I guess I would point you and others to our previous
filings with the SEC, particularly in the most recent 10Q
footnote number 6, where we say that, under certain
circumstances related to a company-initiated settlement
with Sony Computer Entertainment, the company would be
obligated to pay Microsoft a minimum of $15 million.
(Ken Hagen): But if you collect on this verdict, it all goes to you,
not to Sony -- not to Microsoft is the question.
Victor Viegas: If we collect on the verdict, I think it will depend on
very close reading of the agreement we have with
Microsoft.
(Ken Hagen): Well, congratulations, Vic.
Victor Viegas: Thank you (Ken).
Operator: Once again, in order to ask a question, press star 1 on
your telephone keypad. Your next question comes from (Greg
Cioth), a Private Investor.
Victor Viegas: Hi (Greg).
(Greg Cioth): Hello Vic, Patrick. Congratulations on a long fought
battle and great job by the legal team and all you guys.
So congratulations, first of all, on that.
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Victor Viegas: Thank you very much.
(Greg Cioth): Regarding the game, we said that they were in violation of
47 games. And the jury didn't come back and find that Sony
violated 47 games.
Were you able to discuss with the jury at all on an exit
interview why they didn't find any violation of a few of
those games?
Victor Viegas: There were two patents. So if you look at the `213 patent,
I believe the jury found that 44 out of 47 games
infringed. If you look at the `333 patent, it was a
similar finding. However, all 47 games were found to have
infringed at least one of the patents. So in many cases,
the games infringed both patents. In some cases, the games
only infringed one patent.
Why they reached that conclusion, I don't know. We did
discuss briefly with a few members of the jury. But we did
not arrive at any reason why certain games infringed one,
but not both, patents.
(Greg Cioth): Okay. And then regarding a meeting October 1 with Judge
Wilken what is going to occur at that date?
Victor Viegas: I believe that's a status meeting, which will simply
summarize what's occurred, probably create a calendar for
future motions, resolve any open issues that need to be
dealt with. So it's more of an administrative meeting. And
then subject to future motions, appeals, injunctions,
there will be further meetings, discussion, and so on,
with the judge.
(Greg Cioth): Okay. And then regarding -- I was at the shareholders'
meeting and saw the new controller device that you're
demoing on the Xbox that was quite significantly different
in feel than your current patent or the current PS2
controller. Do these same patents cover that device, or
are those new patents under that scenario, that product?
Victor Viegas: The patent that we utilized in this particular case had to
do with what's called a plurality of motors. So these are
devices with more than one motor. But they also covered
other areas such as various pulsing claims and other ways
to achieve a certain level of fidelity.
The technology you're referring to, I believe, would
utilize some of the pulsing claims, but it would be
covered under a number of other patents that Immersion has
on this additional technology. So we have single-motor
patents, we have dual-motor patents, and we have patents
that cover various aspects of achieving the force effects.
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(Greg Cioth): Great. And then does the jury's verdict and the amount of
it -- I saw on the jury form that there's no, you know,
percent calculated. I know in the trial we were arguing 5%
and Sony 0 to maybe 2-1/2% -- does the jury's verdict at
$82 million impact, or let me say, legally bind us to some
sort of percent going forward, or is that just an open
negotiation between the two parties?
Victor Viegas: I believe that's an open negotiation between the two
parties. It will be a function of the risks associated
with injunctions versus the lengthened process of an
appeal. And hopefully the two parties can reach agreement
on some ongoing royalty rate or amount that would be
satisfactory.
(Greg Cioth): Okay, great. And I think that was, let's see, it.
Appreciate it, and congratulations again.
Victor Viegas: Thank you, (Greg).
Operator: Your next question comes from (Ben Simmon) with (Future
Trade).
(Ben Simmon): Hi -- two questions. One, how much are you spending, if
you'll give this out, for legal expense this year? And
what would you estimate the amount would go down now that
you don't have to prepare for this type of trial? And I'm
assuming that it does go down from here.
And two, Microsoft, as I understand it, does not pay you a
royalty. And if I'm wrong, then forget the question. But
the way I read it is Microsoft is not paying you a
royalty. And why would you assume then that Sony would pay
you a royalty going forward?
Victor Viegas: Let me answer your first question first. The total amount
of legal fees spent in this litigation, which would
include all activity since February of 2002, is
approximately $16 million. In 2004, that amount is
approximately $7 million year-to-date. The amount in any
given quarter, obviously, is influenced by that quarter's
activities. We incurred a significant amount, obviously,
in trial, and at other phases of the court proceedings.
But it's, as I said, roughly $7 million for 2004
year-to-date.
I believe that the motions and activities that will begin
now post trial through the appeals process will be
significantly lower. And in fact, I believe, depending on
how long the appeal process would take, the legal fees
through the appeal process could be in the neighborhood of
$1 million. So I think on a quarterly basis, you will see
a significant decrease in the legal fees.
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In terms of the Microsoft license agreement, that was a
license agreement reached by both parties prior to a jury
verdict, in fact, prior to trial. So we reached agreement
on a series of business relationships. One is a license
agreement. Another is an equity investment. And there are
others. And the terms of those agreements do not include
an ongoing royalty for a patent portfolio license.
This does not include a technology license, as I've
discussed earlier, previously. If Microsoft wants to use
specific technology, needs our help in developing new
technology, or implementing technology, that would be
subject to a future arrangement between Immersion and
Microsoft.
But those discussions were quite different than the
results that we now have with Sony. With Sony, we have
gone through the trial, and we have reached a verdict
where the patents were deemed valid and infringed. And
they awarded us an amount of $82 million on past damages.
They are not in a position, nor did they address ongoing
royalties. And that would be subject to a discussion that
Immersion would have with Sony. And the way that we would
arrive at a mutually satisfactory rate or amount is really
going to be subject to those discussions.
(Ben Simmon): Let me ask it a different way. I just want to
make sure that I understand that. Does Microsoft pay you
any cash now -- have they -- for using the product aside
from the agreement that you have with them that was
announced approximately a year ago?
Victor Viegas: Microsoft does not have an ongoing royalty
obligation for the patent portfolio license that we have
in place.
(Ben Simmon): Okay. Thank you.
Victor Viegas: Okay. You're welcome. Thank you.
Operator: Your next question comes from (Robert Katz) with
(Senvest).
(Robert Katz): Hi, Vic. Congratulations on the outcome.
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Victor Viegas: Thank you, (Robert).
(Robert Katz): I was wondering, now that the jury has a decision,
when will the verdict come out, and does the judge have
any leeway in how he can word the verdict that would be
more favorable to you then in how you posture going
forward? Or, does the judge pretty much just say what the
jury decided?
Victor Viegas: Well, so the jury reaches a verdict, which is
something that they have done. And then, based on
post-trial motions that both sides will file, as I
mentioned earlier, the verdict will not necessarily be
entered as a judgment until the judge has heard the
post-trial motions.
(Robert Katz): Okay.
Victor Viegas: So at this point, it's really going to depend on the
matters raised by Immersion or Sony, and how the judge
might rule on those particular issues.
(Robert Katz): So there's still some room for change, then, in how the
judge interprets everything?
Victor Viegas: At this point, I would say yes, that's true. It
appears, by looking at the verdict, the verdict was
reached unanimously. There was no ambiguity in their
answers. So, it would be something the judge would look
at. But I believe it would be highly unusual for the judge
to find significantly different than the jury.
(Robert Katz): Right. Okay. I was thinking, if anything, it would
probably be in your benefit, if you got something else to
that -- the judge -- at least, he would see something more
sort of in your light.
Victor Viegas: Well, like I said, I really can't speculate one way or
another.
(Robert Katz): How many PlayStations has Sony shipped year-to-date? Is
that number part of the whole decision?
Victor Viegas: You know, if I knew the number, it still would be
confidential information. It's not something I'm
at liberty to disclose.
(Robert Katz): Great. Thank you.
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Victor Viegas: Thank you, (Robert).
Operator: Your next question comes from (Mark Nouss), private
investor.
(Mark Nouss): Good afternoon, gentlemen.
Victor Viegas: Hi, (Mark).
(Mark Nouss): How are you doing?
Victor Viegas: Fine, thanks.
(Mark Nouss): Vic, you had mentioned in your -- I must say quite
effective -- summary that Sony will appeal one of the
patent issues. Is it safe to assume that, if worst-case
scenario, the judge reverses that jury verdict, the damage
amount would come down? And can you give us a feel for
what percentage of the $82 million would be related to
that particular patent?
Victor Viegas: So let me clarify. What I believe has been discussed from
Sony's perspective is that the `333 patent -- they are
arguing that there was inequitable conduct on Immersion's
part in the prosecution of that patent. That's not a
matter for the jury to decide. It's a matter for the judge
to weigh the evidence. That's something that the judge
will review as a separate issue.
So separate from that, there's an appeal process. And this
is speculation. But I'm assuming Sony will appeal that
verdict. And that appeal will not be limited to just a
patent or...
(Mark Nouss): Right. I understand. I was hoping for more on the first
part of your answer there, which was, you know, the judge
considering whether there was bad conduct. And if a judge
were to determine, yes, there was bad conduct, what's the
effect of that on the $82 million number? Is it still
within her discretion to reduce it accordingly or...?
Victor Viegas: I'm not sure the full impact. I believe the `333
patent issued later than the `213 patent. If you go back
to the conclusions reached by the jury, I believe they
concluded that claims under the `213 patent were
infringed. So therefore, the fact that they were also
infringed by the `333 is very positive. But I'm not sure
it's necessary, in looking at what the verdict or the
damages amount would be.
(Mark Nouss): Okay.
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Victor Viegas: I'm going to let Patrick clarify this for you.
Patrick Reutens: I would just point out that only 3 of the 47
games were found not to infringe the `213 patent. And
those three games were found to infringe the `333 patent.
Victor Viegas: So, if there was a question of validity of the `333, 3 out
of the 47 games may be at risk or at issue.
(Mark Nouss): Okay.
Victor Viegas: Controllers, consoles obviously would not be.
(Mark Nouss): Okay. Second part of the question -- have you any requests
for interviews?
Victor Viegas: Yes. We have quite a few requests. And I'm going to try to
fulfill those later today, and tomorrow, and the balance
of this week.
(Mark Nouss): Anything on the major news programs that we can look for
you on?
Victor Viegas: At this point it's still a little too early to see what
kind of interest there is. But there is considerable
interest.
(Mark Nouss): Okay. Thank you. Congratulations, gentlemen.
Victor Viegas: Thank you, (Mark).
Operator: Your next question comes from (Mark Kabbash) with
(Vistaquest).
(Mark Kabbash): Congratulations, guys.
Victor Viegas: Thank you, (Mark).
(Mark Kabbash): A quick question -- seeing that Sony and
Microsoft seem to have -- well, definitely have infringed
on those two key patents, are there other organizations
out there in the universe such as Nintendo and Sega that
could be deemed as potential infringers?
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Victor Viegas: (Mark), thank you for the question, but I'm really
not at liberty to speculate on what the outcome of this
trial has on our discussions with other companies.
(Mark Kabbash): Okay. That's fair. Thank you very much.
Victor Viegas: Thank you.
Operator: At this time you do have a follow-up question from (Ken
Hagen) with (Lakeside) Capital.
Victor Viegas: Okay, great.
(Ken Hagen): Hey, Vic, one last question. You mentioned the 47
games that were at issue in this litigation. So I
understand, then, that you have preserved your right to go
after Sony with, in fact, all the other games that
potentially infringe?
Victor Viegas: Yes, that's correct. And maybe just a brief word
of clarification, because of timing and various
administrative aspects of the case we were only able to
test and introduce into evidence 47 games. But we clearly
have access to other games and continue to test those
games and reserve rights to raise those issues in the
future.
(Ken Hagen): Okay. So you've still got a lot of powder left to ignite
here. Great. Thanks.
Victor Viegas: You're welcome. Thank you, (Ken).
Operator: You have another follow-up question from (Greg Cioth),
private investor.
Victor Viegas: Hi, (Greg).
(Greg Cioth): Hi, Vic. Just to clarify, on the year-to-date $7 million
for legal fees, is that year-to-date today, or is that
ending Q2?
Victor Viegas: Now we're starting to get quite specific.
(Greg Cioth): Well, the last three months of this quarter obviously is,
you know, a significant legal bill, because that's when
the trial took place.
Victor Viegas: Right. I believe that number reflects the period through
August.
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(Greg Cioth): Through August, okay -- and now that this case has gone to
trial, it seemed what I heard, Sony's defense against
willful infringement is that they actually thought,
because of previous art and some of the other things that
you mentioned at the beginning of the call -- AT&T
joystick -- that, you know, maybe they weren't found
willfully infringing because they didn't think you had
valid patents.
Now that that defense has been, by this particular jury,
found not viable, or that the patents are valid, so no one
else could use that defense -- the AT&T joystick defense
-- does that help your case against others that may be
violating and now are maybe more at risk of being found to
be willful violators?
Victor Viegas: You know, (Greg), I'm not sure I know exactly why
the jury decided that there was no willful infringement. I
don't know if it was based on certain prior art that the
jury felt were relevant. I don't know if it was a
negotiated way for a jury to reach a unanimous verdict. I
really just can't speculate.
I think, given the time of the patent filing, the
publication of the patent, the introduction of the
product, one could reach the conclusion that, while there
was infringement, maybe it wasn't willful. So, I don't
really know exactly why they reached that position. But I
think others, if we were to raise the issue, I think they
would form their own defense, and we'd have to take a look
at that. I really can't speculate as to what it was in
this trial that led them to reach that conclusion.
(Greg Cioth): Okay. And then the other caller was talking about
additional powder. These were just U.S. patents. I would
imagine that any negotiations or further possible, you
know, trials, et cetera, could involve sales to outside of
the U.S. Is that correct?
Victor Viegas: Again, I don't really want to speculate on what we might
do in the future. All I really want to say is that the
patents that we brought into this suit were just two U.S.
patents. And how we move forward is really getting into
our legal strategy.
(Greg Cioth): Okay, fair enough. Thanks again.
Victor Viegas: Thank you, (Greg).
Operator: Your next question comes from (Tom Tortolani),
private investor.
16
(Tom Torolani): Gentlemen, thank you for the update.
Victor Viegas: You're welcome, (Tom).
(Tom Tortolani): Actually, I had a question, but it was just answered on
(Greg's) question about the U.S. sales and overseas sales.
So, thanks again for the update, appreciate all your
information.
Victor Viegas: You're welcome. Thank you.
Operator: At this time there are no further questions. You may
proceed with your presentation or any closing remarks.
Victor Viegas: Okay. Well thank you very much for your participation in
today's call. We appreciate your continued interest in
Immersion. We invite you to join our financial third
quarter conference call, which will be held on October 25.
I want to thank you for being shareholders and having an
interest in Immersion, and good afternoon.
Operator: This concludes today's Sony Litigation conference call.
You may now disconnect.
END