Sony told to halt US sales of PlayStation

Published on Monday 28 March 2005 11:58

ELECTRONICS giant Sony today said it had been ordered by a US court to halt sales of its blockbuster PlayStation consoles in the key American market and pay some £48 million in damages to technology minnow Immersion.

But Sony Computer Entertainment, the Japanese giant’s gaming unit, said it would appeal the decision by a California federal court in the patent infringement case.

For the time being, Sony will keep selling PlayStations, as the order - which covers the PlayStation and PlayStation 2 consoles, two game controllers and 47 software titles - will not go into effect before the appeal, an SCE spokeswoman confirmed. Sony will be paying compulsory licence fees to Immersion, she added.

Games have been Sony’s profit driver in recent years, accounting for around 44 per cent of group operating profit in October-December, as the firm struggles with price declines at its electronics division.

In January, Sony cut its operating profit estimate for this business year by 31 per cent, citing falling prices of televisions and DVD recorders and weak demand for chips.

Immersion, a California-based developer of digital touch technologies, claimed SCE infringed on its technology that makes a game controller vibrate in sync with actions in games.

The amount awarded by the court is more than triple Immersion’s total revenues in 2004 and represents two-thirds of the company’s current market value. The court’s decision confirmed a ruling by a California jury last year that ordered Sony to pay about 44m in the case. The amount was raised to slightly over 48m due to interest.

In another intellectual property-related lawsuit between Japanese and US technology companies, Toshiba was ordered by a California jury last week to pay a total of 248m in punitive and other damages to Lexar Media for stealing trade secrets.