8-K

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

___________________FORM 8-KCURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934Date of Report (Date of earliest event reported): August 25, 2008IMMERSION CORPORATION(Exact name of registrant as specified in its charter)
___________________

Delaware	000-27969	94-3180138
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

801 Fox Lane

San Jose, California  95131

(Address of principal executive offices) (Zip Code)

___________________
Registrant’s telephone number, including area code: (408) 467-1900

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01     Entry into a Material Definitive Agreement.

On August 25, 2008, Immersion Corporation (“Immersion”) and Microsoft Corporation (“Microsoft”) agreed to settle the breach of contract claim filed by Microsoft in June 2007 against Immersion in the U.S. District Court for the Western District of Washington, as well as Immersion’s counterclaim.  A copy of the press release announcing the settlement is attached as Exhibit 99.1 to this report and incorporated herein by reference.  

The settlement arrangement provides that Immersion will pay Microsoft $20.75 million, and Immersion will be admitted to the Microsoft Certified Partner Program.

Item 9.01     Financial Statements and Exhibits.

(d)       Exhibits.

Exhibit No.	Description
99.1	Press Release dated August 26, 2008 regarding the settlement of the lawsuit filed by Microsoft Corporation against Immersion.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		IMMERSION CORPORATION
Date:	August 26, 2008	By:	/s/ Stephen M. Ambler
			Chief Financial Officer and Vice President,
			Finance

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release dated August 26, 2008 regarding the settlement of the lawsuit filed by Microsoft Corporation against Immersion.

EX-99.1

Exhibit 99.1

Immersion and Microsoft Settle Litigation

SAN JOSE, Calif.--(BUSINESS WIRE)--Immersion Corporation (NASDAQ:IMMR), the leading developer and licensor of touch feedback technology, today announced that Immersion and Microsoft (NASDAQ: MSFT), have settled their litigation, which was pending in the United States District Court for the Western District of Washington since June 2007.

Immersion and Microsoft have agreed to resolve Microsoft's claim under a 2003 Sublicense Agreement between Microsoft and Immersion, as well as Immersion's counterclaim that Microsoft breached a confidentiality agreement between the companies dated May 2007. Immersion agreed to make a one time payment to Microsoft in the amount of $20.75 million. In addition, Immersion will be admitted to Microsoft’s Certified Partner Program. Other terms of the settlement are confidential.

"We are pleased to resolve our outstanding dispute with Microsoft and to put this litigation behind us," said Immersion president and CEO Clent Richardson. “We now have our full attention and focus devoted to working with innovative companies around the world, including Microsoft, to accelerate and rapidly achieve global adoption of our haptic technology in gaming, consumer electronics, mobility, and medical products.”

About Immersion (www.immersion.com)

Founded in 1993, Immersion Corporation is the recognized leader in developing, licensing, and marketing digital touch technology and products. Using Immersion’s advanced touch feedback technology (http://www.immersion.com/corporate), electronic user interfaces are more compelling, entertaining, and in many applications, safer and more productive. Immersion’s technology has helped manufacturers develop innovative and creative solutions for products such as hundreds of video games and leading video console gaming systems, medical training simulators installed around the world, driver controls for automotive manufacturers, and mobile phones, such as those from LG and Samsung. Immersion’s patent portfolio includes over 700 issued or pending patents in the U.S. and other countries.

Immersion and the Immersion logo are trademarks of Immersion Corporation in the United States and other countries. All other trademarks are the property of their respective owners.

CONTACT:
A&R Edelman
Angie Ayala, +1-650-762-2952
aayala@ar-edelman.com