Sony Tarnished By Malpractice and Fraud Claims

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Sony, who is wallowing in losses and falling Playstation sales, has now found itself being sued in a messy malpractice and fraud case that raises questions about the ethics of the company.

Three months ago, Sony was forced to shell out $97 million in damages and interest to Immersion, a company who sued Sony in a dispute over the rumble functions in Sony’s Dual Shock controllers.

Now a US inventor John Thorner alleges that Sony and its affiliates cheated him out of royalties for a license that he held for the technology. He also claims that Sony conspired to obtain his patent  using “dubious” means.

Thorner claims that he retained the patents for vibration feedback, which he subsequently licensed exclusively to Immersion. Sometime later he terminated the patent with Immersion and licensed the patent to another gaming industry manufacturer PDP. 

He then found out that PDP and Sony were in league with each other to secure the patents and avoid hefty payouts to Immersion.

Thorner alleges that the partnership between PDP and Sony were not disclosed and had if it been, he would not have done business with them.


Thorner was the key witness in Sony’s effort to overturn an $82 million patent infringement verdict in favour of Immersion over the vibrating video game controllers. It’s also alleged that Sony agreed to pay Thorner $150,000 to be a witness for them. 

Sony claimed that Immersion paid Thorner to keep quiet about inventions of his that could have invalidated Immersion’s patents.

 

In a wide-ranging suit filed last week in the New Jersey District Court, Thorner accuses Sony’s outside and in-house lawyers of snookering him into the $150,000 deal, which came in the form of convoluted agreement to license his patents.

He also accuses Sony’s outside counsel Gregory Gewirtz, of New Jersey firm Lerner David Littenberg Krumholz & Mentlik – of malpractice, for allegedly acting as his lawyer in the deal but for Sony’s benefit.

The lawsuit claims that the lawyers “contrived to take advantage of Thorner’s inexperience and lack of resources in order to (i) obtain a patent license from Thorner on extremely favourable terms, and (ii) induce Thorner to testify against Immersion.”

The way the deal worked, according to the lawsuit, was that Electro Source, a video game company which is also being sued by Immersion, would pay Thorner $150,000 to license his patents. The deal, however, was actually being funded by Sony, which in turn got a license from Electro Source according to the lawsuit and court hearing transcripts.

Thorner claims that Gewirtz agreed to be his lawyer in the negotiations with Electro Source, but was actually looking out for Sony’s interest.

Riley Russell, a Sony in-house lawyer whom the lawsuit accuses of authorizing Sony’s secret funding of the deal, was out of the country and couldn’t be reached for comment.

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