I had not heard about this suit before, but it looks like Microsoft's decision to settle - leaving Sony to sight the battle against a patent for game controllers with feedback - is going to bite Sony:

Sony's struggle with Immersion dates back to 2002, when Immersion came after Sony and its DualShock vibration feedback system for controllers. Immersion also pursued Microsoft and its controllers, but Microsoft settled with the company and entered into a licensing agreement, leaving Sony to fend for itself. In September of 2004, Sony lost a jury trial and was ordered to pay US$82 million in damages for infringing on Immersion's patents. Half a year later in March of 2005, Sony lost an appeal and damages were revised to nearly $91 million.

Worse, it looks an awful lot like Sony tried to buy off the guy who filed the patent:

In this latest round, Sony argued that Immersion was holding back evidence and requested that the original verdict be tossed out. They argued that inventions of Craig Thorner—once a consultant for Immersion—were not fully and properly disclosed. Sony argued that the full body Thorner's work on haptic feedback reveals weaknesses in Immersion's patent claims, and that such weaknesses are grounds for a new trial.

US District Judge Claudia Wilken has sided with Immersion. The problem is Mr. Thorner. While Thorner did once work for Immersion, he has also received a $150,000 payment from Sony for royalties and a purchase option on another patent. Although the money in question appears to be technically unrelated to Thorner's testimony, Wilken wrote that Thorner's testimony was suspect and that it was quite possible that he viewed his testimony as a favor to Sony. Since Thorner's testimony serves as the basis for Sony's new attack on Immersion's patents, Wilken's ruling effectively puts this line of appeal to rest.

Regardless of the merits of the patent, I doubt the court will take that payment lightly. I think Microsoft just got another leg up in the console space.