Item 1. Legal Proceedings
Item 1. Legal Proceedings
Immersion Corporation vs. Xiaomi Group
On or about March 3, 2023, the Company initiated patent infringement lawsuits against several companies of the Xiaomi-Group in Germany, France and India (the “Xiaomi Litigation”). 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 alleged that the Xiaomi-Group’s devices, including the Xiaomi 12, infringed Immersion's patents that cover various uses of haptic effects in connection with such devices.
On June 12, 2024, the Company entered into a Patent License Agreement (the “Xiaomi License Agreement”) with the Xiaomi Group, pursuant to which the parties have agreed to terms for resolving the Xiaomi Litigation and the Xiaomi Group will license, on a non-exclusive basis, the Company’s patent portfolio for use in its products. Pursuant to the Xiaomi License Agreement, the Company and the Xiaomi Group have agreed to terms for dismissal by them of the outstanding Xiaomi Litigation.
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 2017 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 8, 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 Seoul High Court to seek the cancellation of the lower
court’s decision. The appellate case is in progress at the Seoul High Court and
the first hearing and the hearing took place on November 30, 2023 and
February 1, 2024, respectively. However, the next hearing will be set at a
later date.
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. On August 7, 2023, the
Korean tax authority submitted its answer against the tax appeal. On September
8, 2023, on behalf of LGE, the Company submitted its rebuttal brief in response
thereto. On September 25, 2023, the Korean tax authority, on behalf of LGE, the
Company submitted an additional response brief, and on November 23, 2023, the
Korea Tax Tribunal rendered a decision against LGE, dismissing the claims of
the Company on the grounds that its claims are without merit.
In response thereto, on behalf of LGE, the Company filed an appeal with the
Korea Administrative Court on December 29, 2023. On July 25, 2024, the
Korea Tax Tribunal rendered a decision against LGE, and the deadline for the court
appeal of the local income claim is October 21, 2024. In addition, the Korea
Administrative Court scheduled a hearing date of August 29, 2024.
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Immersion Corporation vs. Valve Corporation ( “ Valve ”)
On May 15, 2023, we filed a complaint against 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.
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. Valve re-noted its motion, which changed
Immersion’s response deadline from August 14, 2023 to August 21, 2023.
Immersion timely filed its response, and Valve filed its reply on August 25,
2023. The Court heard arguments on Valve’s motion on February 8, 2024. The
Court entered a case schedule on November 21, 2023. The case schedule did not
include a trial date but set the pretrial conference for May 30, 2025.
Valve filed inter
partes reviews (“IPRs”), IPR2024-00477 and IPR2024-00478 on January 19, 2024.
These petitions are directed to U.S. Patent Nos. 7,336,260 and 9,430,042
respectively. The Company filed its patent owner preliminary responses to these
petitions on April 26, 2024, and April 29, 2024, respectively. The Patent Trial
and Appeal Board issued a decision, granting institution of these petitions on
July 24, 2024, and July 25, 2024, respectively. The Company’s patent owner
responses to these petitions are due on October 15, 2024 and October 17, 2024,
respectively. Valve filed IPR2024-00508 on January 30, 2024, which is directed
to U.S. Patent No. 9,116,546. The Company elected not to file a patent owner
preliminary response to this petition. The Patent Trial and Appeal Board issued
a decision, granting institution of this petition on August 6, 2024. The
Company’s patent owner response to the petition is due on October 31, 2024.
Valve filed IPR2024-00556 on February 7, 2024, which is directed to U.S. Patent
No. 8,749,507. The Company filed its patent owner preliminary response to this
petition on May 15, 2024. The Patent Trial and Appeal Board issued a decision,
granting institution on August 6, 2024. The Company’s patent owner response to
the petition is due on October 31, 2024. Valve filed IPR2024-00557 on February
7, 2024, which is directed to U.S. Patent No. 10,665,067. The Company filed its
patent owner preliminary response to this petition on May 15, 2024. The Patent
Trial and Appeal Board issued a decision, granting institution on August 13,
2024. Valve filed IPR2024-00582 on February 16, 2024, which is directed to U.S.
Patent No. 11,175,738. The Company filed its patent owner preliminary response
to this petition on June 27, 2024. The Patent Trial and Appeal Board’s decision
on whether to institute the petition is expected to issue around September 27,
2024. Valve filed IPR2024-00714 on March 22, 2024, which is directed to U.S.
Patent No. 10,627,907. The Company filed its preliminary patent owner preliminary
response to this petition on July 30, 2024. The Patent Trial and Appeal Board’s
decision on whether to institute the petition is expected to issue around
October 30, 2024.
The parties submitted their joint claim
construction statement and respective positions on March 29, 2024.
On March 14, 2024, Valve filed a motion to
stay the district court case pending the PTAB’s decisions on the IPRs.
Immersion opposed the motion on March 25, 2024, and Valve filed its reply brief
on March 29, 2024. The Court granted Valve’s motion to stay on April 4, 2024.
In connection with that order, the Court struck Valve’s motion to dismiss with
leave to refile at a later date.
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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.