Few gamers have heard of a recent legal battle between Hillcrest Labs and Nintendo, and the ones that have had written it off as another attempting at patent trolling. The lawsuit claimed that Nintendo infringed on various patents owned by Hillcrest when it came to motion control. Hillcrest labs is a venture backed start up that has raised over $50 million to date, and invested heavily to create the next generation of motion controls.

So what happened to that lawsuit? Nintendo decided to settle last Aug, with no admission of guilt. So while it's not clear what would have happened if the battle went all the way through court, what is clear is that the technology Hillcrest Labs has invented is now of keen interest to every console developer.

Our source at Hillcrest labs, who prefers to remain anonymous, has confirmed that his company is now in talks in various stages with all the big console makers, ie. Sony, Microsoft and yes, Nintendo. And there is good reason why the big three are interested. Hillcrest Lab's technology in motion control and 3D interfaces are impressive. To date, they own 29 patents in this area, and have already filed more than 100 more related patents. While Microsoft  is banking heavily in Natal, and Sony seems to be focusing on the magic wand controller, there are some interesting components of Hillcrest's technology that could make the big 3 console maker's motion control initiatives that much more impressive. So lets speculate, based on what I discussed, and on what I have seen, shall we?

Adaptive Tremor Removal
Currently, when you use your Wii mote to point to the screen and try to get that pointy finger to press different things onscreen, it always seems like it is jittery, as if you had too much coffee to drink. Hillcrest Labs has technology that pretty much eliminates the natural tremors on your hands, so that the mouse pointer is always moving smoothly onscreen.

Look ma, no sensor bar!
It seems like all console makers will eventually require you to either have a sensor bar or camera in front of your TV for their motion controller to work. Hillcrest has designed their controller to work without the sensor bar, which means that you can have someone walk infront of your game, and it won't matter. You no longer need line of site for the controller to stay active.

Orientation Compensation
Sounds like getting paid for going to a meeting. Basically here's how this feature works: Let's say you are lounging on your couch and surfing around the menu system for a game. If you're lying on your side, chances are the controller is tilted a bit too. But with Hillcrest Lab's tech the controller will automatically adjust to any position you are in. Even when you hold the controller upside down, if you motion your arm to go up, the onscreen pointer goes up instead of the opposite direction.

Pinpoint Pointing
One thing I found impressive about the controller is that it allowed for very pinpoint accuracy, right down to a pixel on a high resolution screen. It's always frustrating playing a gun game and having your accuracy compromised by iffy controller precision.

Interface technology
Similar to how Apple created a new interface structure with the iPhone, Hillscrest has created an interface that makes it easy to use motion controls to navigate around various menus. It looks like a combination of circular menus that zoom in and out based on how deep you go into the navigation tree.

You can actually play around with some of this technlogy today, as Hillcrest Labs recently released a consumer version of their circular controller for the PC, which looks a lot like a Halo Plasma Pistol. Just so happens this tech was also nominated for the 2010 Design and Engineering Award at CES. Just from my hands-on demo, it already feels much smoother and precise than what the Wiimote can do today, even with the extra Wii Plus added on. What's fascinating is that this tech was already fully functional way back in 2007. The guys at Gizmodo were given a demo of it, and they went as far as retracting their earlier statements on how the technology was vaporware, and went on to say that "thing was amazing."