Item 1. Legal Proceedings
Item 1. Legal Proceedings
Immersion Corporation vs. Meta Platforms, Inc., f/k/a Facebook, Inc. (“Meta”)
On May 26, 2022, we filed a complaint against Meta in the United States District Court for the Western District of Texas. The complaint alleges that Meta’s augmented and virtual reality (“AR/VR”) systems, including the Meta Quest 2, infringe six of our patents that cover various uses of haptic effects in connection with such AR/VR systems. We are seeking to enjoin Meta from further infringement and to recover a reasonable royalty for such infringement.
The complaint against Meta asserts infringement of the following patents:
• U.S. Patent No. 8,469,806: “System and method for providing complex haptic stimulation during input of control gestures, and relating to control of virtual equipment”
• U.S. Patent No. 8,896,524: “Context-dependent haptic confirmation system”
• U.S. Patent No. 9,727,217: “Haptically enhanced interactivity with interactive content”
• U.S. Patent No. 10,248,298: “Haptically enhanced interactivity with interactive content”
• U.S. Patent No. 10,269,222: “System with wearable device and haptic output device”
• U.S. Patent No. 10,664,143: “Haptically enhanced interactivity with interactive content”
Meta responded to the Company’s complaint on August 1, 2022. On September 12, 2022, Meta filed a motion to transfer the lawsuit to the Northern District of California or, in the alternative, to the Austin Division of the Western District of Texas. The Court denied Meta’s motion on May 30, 2023, and held the claim construction hearing on the same day. The Court adopted certain claim constructions during the hearing, and issued a formal claim construction order consistent with those constructions on July 7, 2023.Fact discovery is ongoing, and is set to close on September 6, 2023.
In addition, Meta filed inter partes reviews (“IPRs”), IPR2023-00942; IPR2023-00943; and IPR2023-00944, on May 25, 2023. These are directed to U.S. Patent Nos. 8,469,806; 8,896,524; and 10,269,222, respectively. The Company’s response to IPR2023-00942 and IPR2023-0094 is due on September 8, 2023, and to IPR2023-00944 is due on September 12, 2023. Meta filed IPR2023-00945; IPR2023-00946; and IPR2023-00947 on May 26, 2023. These IPRs are directed to United States Patent Nos. 10,664,143; 9,727,217; and 10,248,298, respectively. The Company’s response to IPR2023-00945 is due on September 8, 2023, and to IPR2023-00946 and IPR2023-00947 is due on September 12, 2023.
On August 2, 2023, Meta filed a mandamus petition asking the Federal Circuit to vacate Judge Albright’s May 30, 2023 order denying transfer of the litigation from the Waco Division of the Western District of Texas to the Northern District of California and instead transferring the case to the Austin Division of the Western District of Texas. The Federal Circuit has set a response deadline of August 11, 2023 for us, and a reply deadline of August 14, 2023 for Meta
Immersion Corporation vs. Xiaomi Group
On or about March 3, 2023, the Company filed patent infringement lawsuits against several companies of the Xiaomi-Group in Germany, France and India. Immersion filed complaints against Xiaomi-Group companies and their agents in the Düsseldorf Regional Court in Germany, the Tribunal judiciaire de Paris (Paris First Instance Civil Court) in France, and the High Court of Delhi, at New Delhi, in India.
The complaints allege that Xiaomi’s smartphones, including the Xiaomi 12, infringe Immersion’s patents that cover various uses of haptic effects in connection with such smartphones. Immersion is seeking injunctions that would allow Immersion to prohibit Xiaomi from selling the infringing smartphones in Germany, France and India, as well as costs and damages as compensation for such infringement.
The complaints against Xiaomi assert infringement of the following patents:
• EP 2 463 752 B1 (German part) titled “ Haptisches Feedback-System mit gespeicherten Effekten ”
• EP 2 463 752 B1 (French part) titled “ Système de rendu haptique avec stockage d’effets ”
• IN 304 396 (India) titled “ Haptic Feedback System With Stored Effects”
On June 19, 2023, Xiaomi filed an initial response to the Company’s lawsuit in India. On July 7, 2023, the Indian litigation was listed before the Learned Joint Registrar (“JR”), Mr. Siddharth Mathur. Immersion’s preliminary response to Xiaomi’s initial response is due on August 11, 2023.
On July 11, 2023, in the German proceeding Xiaomi filed its nullity action in the German Federal Patent Court, which was served on Immersion on July 27, 2023.
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LGE Korean Withholding Tax Matter
On October 16, 2017, we received a letter from LG Electronics Inc. (“ LGE ”) requesting that we reimburse LGE with respect to withholding tax imposed on LGE by the Korean tax authorities following an investigation where the tax authority determined that LGE failed to withhold on LGE’s royalty payments to Immersion Software Ireland Limited from 2012 to 2014. Pursuant to an agreement reached with LGE, on April 8, 2020, the Company provided a provisional deposit to LGE in the amount of KRW 5,916,845,454 (approximately $5.0 million) representing the amount of such withholding tax that was imposed on LGE, which provisional deposit would be returned to us to the extent we ultimately prevail in the appeal in the Korea courts.
On November 3, 2017, on behalf of LGE, we filed an appeal with the Korea Tax Tribunal regarding their findings with respect to the withholding taxes related to the 2012 to 2014 period. The Korea Tax Tribunal hearing took place on March 5, 2019. On March 19, 2019, the Korea Tax Tribunal issued its ruling in which it decided not to accept our arguments with respect to the Korean tax authorities’ assessment of withholding tax and penalties imposed on LGE. On behalf of LGE, the Company filed an appeal with the Korea Administrative Court on June 10, 2019. The Company has had numerous hearings before the Korea Administrative Court in the years 2019 through 2022. The Company had a hearing on April 27, 2023, and the Korea Administrative Court rendered a decision on this matter on June 7, 2023, in which it ruled that the withholding taxes and penalties which were imposed by the Korean tax authorities on LGE should be cancelled with litigation costs to be borne by the Korean tax authorities. In connection with the Korea Administrative Court’s decision, the Korean tax authorities filed an appeal on June 28, 2023 with the Korea Administrative Court to seek the cancellation of the court’s decision.
On April 25, 2023, the Company received notice from LGE requesting the Company to reimburse LGE with respect to withholding tax imposed on LGE by the Korean tax authorities following a recent tax audit of LGE for the years 2018 through 2022. Pursuant to an agreement reached with LGE, on June 2, 2023, the Company provided a provisional deposit to LGE in the amount of KRW 3,024,877,044 (approximately $2.3 million) representing the amount of such withholding tax that was imposed on LGE, which provisional deposit would be returned to the Company to the extent the Company ultimately prevails in the appeal in the Korean courts. On June 29, 2023, on behalf of LGE, the Company filed an appeal with the Korea Tax Tribunal regarding their findings with respect to the withholding taxes related to the 2018 to 2022 period.
Section 220 Demands
On March 14, 2022, we received a stockholder demand (the “ Franchi Demand ”) to inspect our records pursuant to Section 220 of the Delaware General Corporation Law from Anthony Franchi, a purported stockholder of the Company. On March 21, 2022, we responded, noting deficiencies in the stockholder demand, but agreeing to produce certain requested documentation, subject to the execution of a confidentiality agreement relating to the confidentiality of such requested documentation. On April 29, 2022, the parties executed a confidentiality agreement covering such requested documentation. We produced documents in response to the Franchi Demand in May 2022 and since then has heard nothing further regarding the Franchi Demand.
We also received a demand for the inspection of books and records under Section 220 on behalf of Interlink Electronics, Inc. (“ Interlink ”) dated May 9, 2022 (the “ Interlink Demand ”). Interlink is a purported beneficial owner of 1.2 million shares of our common stock. The Interlink Demand seeks to inspect certain our books and records. It contends that Interlink requires the books and records in order to investigate a series of transactions and actions that the Company’s board of directors and management effected in 2021 and 2022. On May 19, 2022, we responded to the Interlink Demand by objecting that it failed to meet the requirements of Section 220. However, we agreed to permit Interlink to inspect certain books and records subject to a confidentiality agreement. We most recently provided a draft confidentiality agreement to Interlink in August 2022 and since then has heard nothing further regarding the Interlink Demand.
Immersion Corporation vs. Valve Corporation
On May 15, 2023, we filed a complaint against Valve Corporation (“ Valve ”) in the United States District Court for the Western District of Washington. The complaint alleges that Valve’s AR/VR systems, including the Valve Index, and handheld Steam Deck, infringe seven of our patents that cover various uses of haptic effects in connection with such AR/VR systems and other video game systems. We are seeking to enjoin Valve from further infringement and to recover a reasonable royalty for such infringement.
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The complaint against Valve asserts infringement of the following patents:
• U.S. Patent No. 7,336,260: “Method and Apparatus for Providing Tactile Sensations”
• U.S. Patent No. 8,749,507: “Systems and Methods for Adaptive Interpretation of Input from a Touch-Sensitive Input Device”
• U.S. Patent No. 9,430,042: “Virtual Detents Through Vibrotactile Feedback”
• U.S. Patent No. 9,116,546: “System for Haptically Representing Sensor Input”
• U.S. Patent No. 10,627,907: “Position Control of a User Input Element Associated With a Haptic Output Device”
• U.S. Patent No. 10,665,067: “Systems and Methods for Integrating Haptics Overlay in Augmented Reality”
• U.S. Patent No. 11,175,738: “Systems and Methods for Proximity-Based Haptic Feedback”
Valve responded to the Complaint on July 24, 2023 with a motion to dismiss. Immersion’s response to the motion is due on August 14, 2023.
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.