"Sony can continue to sell its Playstation2 games console in the United States, despite an injunction made by a California Court last week ordering it to stop.
The judge, in a California court, upheld a ruling last September that Sony had infringed patents held by Immersion Technology on force feedback controllers. At the time, the court ordered Sony to pay Immersion damages of $82m, a figure based on sales of the PS2 Stateside. The award was updated to $90.7m last week. The judge also ordered Sony to stop selling or importing PS2 consoles, but immediately suspended the judgment pending the outcome of an anticipated appeal.
Immersion's haptic technology first appeared in a PC joystick in 1996, and with Microsoft the company developed the DirectX force feedback API. But the two subsequently fell out, with Microsoft named as the joint-defendent in the Sony action for infriging Immersion's IP in its Xbox console. However Microsoft settled, paying out $26m and taking a 10 per cent equity stake in the firm.
The decision doesn't affect the Playstation Portable"
From:
http://www.theregister.co.uk/2005/03/29/sony_immersion_injunction/
So most likely, they decided to give up on it as they didn't want to shell out more cash, or Immersion simply didn't let them use it, and would fret to sue them again.
I do understand somewhat how the vibration could mess up the movement sensor, but I don't think that was the inital problem.