First reported by the CNET Tech news blog, Microsoft's legal action stems from a 2003 settlement with Immersion. In 2002, Immersion pressed charges against Microsoft and Sony, alleging patent infringement over the inclusion of rumble in the controllers of each company's respective video game console. Microsoft struck a deal with Immersion in 2003, which mainly consisted of a payment totaling $26 million.

According to court documents uncovered by Seattle Post-Intelligencer writer Todd Bishop, the terms of Microsoft and Immersion's settlement promised Microsoft a minimum of $15 million in the event Immersion received settlement funds from Sony as well, with the exact amount determined by the total of Sony's payment.

When Sony and Immersion dropped the litigation and resumed business operations with one another in March of this year, Microsoft received no payment.

"The Company has determined that the conclusion of its litigation with Sony Computer Entertainment does not trigger any payment obligations under its Microsoft agreements," reads Immersion's latest quarterly filing with the SEC. "However, in a letter sent to the Company dated May 1, 2007, Microsoft disputed the Company's position and stated that it believes the Company owes Microsoft at least $27.5 million. If Microsoft brings a lawsuit to further dispute the Company's position, the Company intends to oppose Microsoft's claims and vigorously defend the Company's position."

The quarterly report also mentions that Immersion has received $131.575 million from Sony thus far--$97.3 million from the now-dropped legal action, $32.4 million in license fees and interest, plus $1.875 million under the terms of the new business deal--with plans to obtain eleven more quarterly payments of $1.875 million, totaling another $20.625 million.

"We entered into a binding licensing agreement with Immersion and are seeking to have that agreement honored," explained Microsoft associate general counsel Steve Aeschbacher. "Microsoft licenses technology both in and out and relies on these agreements to be honored and enforced. Our request to the court is that all companies and industry partners should play by the same rules and that the binding agreement we signed with Immersion be honored."