Citing a number of patent infringements, misrepresentation, and fraud, a small group of inventors is suing Microsoft. Intellivision (not affiliated with the Mattel group) says it was lied to by Microsoft. In 2001, Intellivison licensed its DVR intellectual property rights to Microsoft, royalty-free.

While negotiating the deal, Microsoft reportedly claimed to want the rights to Intellivision's DVR technology for "defensive purposes only," and claimed to have no plans for its use on the consumer market. A week after the ink was dry, Microsoft launched an agressive ad campain for the ill-fated Ultimate TV.

Although Microsoft has yet to file a legal response to the suit, last week the company filed a motion to move the case from the NY Supreme Court to the US District Court in NY. The inventors are seeking to nullify the contract and asking for unspecified damages.

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