NEW YORK (AP) - Shares of microchip design company Tessera Technology Inc.
soared Thursday after the company said it still holds the right to patents at
the center of its lawsuit against Motorola and others.
Tessera shares plunged last Tuesday after the U.S. Patent and Trademark
Office appeared to reject the majority of Tessera's claims to the chip designs.
The International Trade Commission stayed Tessera's lawsuit as a result.
However, the company said Thursday the rejection was part of the overall
re-examination process and that Tessera could continue to assert its right to
the patents until the process was completed.
In a note to investors, Cowen and Company analyst Raj Seth backed Tessera
and said he was shocked by the "brutal, negative reaction" in Tessera's stock
price in reaction to the stay in the case.
"In our view the market is now discounting a very, very, very, very unlikely
scenario" in which Tessera patents are overturned and existing licensees refuse
to pay.
"Licensees are quite knowledgeable on patent issues and surely know that
we're not even close to any patents being overturned," he wrote.
Deutsche Bank analyst Arnab Chanda said he continued to believe that the
legal proceedings will not have any impact on Tessera's current business and
said investors should stay focused on the status of Tessera's ITC appeal in 30
days.
The patents relate to chip packages, which carry electrical signals between
chips and computers and protect the chips from contamination.
The stay was granted at the request of the respondents, which include
Motorola Inc., Qualcomm Inc., Freescale Semiconductor and ATI Technologies, a
unit of Advanced Micro Devices Inc.
Tessera shares added $1.59, or 11.5 percent, to $15.41 in afternoon trading.
Over the last year, the stock has traded between $11.11 and $46.43.
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