Sony Ordered to Halt Playstation Sales
LOS ANGELES (Reuters) - Sony Corp. (6758.T) on Monday said it was ordered by a U.S. federal court to halt U.S. sales of its PlayStation game consoles and pay nearly $91 million in patent infringement damages to a California company, although the judge immediately put her ruling on hold.
The stay in the case means Sony will not actually have to stop importing or selling the PlayStation 2 console in the United States, and will not have to remove PS2s from store shelves, while the appeal is pending.
Financial analysts said there was little practical impact to the order.
"There's no way that Sony's going to stop selling PS2s any time soon, so I don't see the injunction ever taking effect," said Michael Pachter, an analyst at Wedbush Morgan.
"Clearly if Sony loses the appeal they will pay the judgment and enter into a royalty agreement," he added.
At issue is patents held by Immersion Corp. (Nasdaq:IMMR - news) on vibration technology. The PS2's Dualshock controllers vibrate when players take actions in some games, like firing guns.
Immersion shares were up nearly 15 percent on the news, though Sony shares were basically unchanged.
Sony Computer Entertainment, Sony's gaming unit, said it would appeal the order, handed down last Thursday by a federal court in northern California.
A Sony spokeswoman in the United States said the appeal was in progress but declined to say when it would be filed. However, a Sony spokeswoman in Tokyo said the company would be paying compulsory license fees to Immersion while the appeal progressed through the courts.
Games accounted for 44 percent of Sony's group operating profit from October to December, as its electronics division continues to struggle.
The $90.7 million awarded by the court is more than triple Immersion's total revenues of $23.8 million in 2004.
The court's decision confirmed a ruling last year that ordered Sony to pay $82 million in the case. The amount was raised to slightly more than $90 million due to interest.
Immersion shares were up 85 cents at $6.60 in afternoon trading on Nasdaq. Sony shares were down 2 cents at $41.14 on the New York Stock Exchange, having fallen slightly in Tokyo.
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