2nd UPDATE: ITC Rules For Tessera In Patent Case
May 20 2009 - 6:59PM
Dow Jones News
The U.S. International Trade Commission, overturning a prior
judgment, ruled in favor of Tessera Technologies Inc. (TSRA) in a
closely watched case involving patents associated with packaging
computer chips.
Tessera shares jumped 21% to $20.10 after hours following the
news.
The ITC ruled that defendants Qualcomm Inc. (QCOM), Motorola
Inc. (MOT), Spansion Inc. (SPSN), STMicroelectronics NV (STM),
Freescale Semiconductor Inc. (FSLB) and ATI Technologies, now owned
by Advanced Micro Devices Inc. (AMD), violated Tessera's patents
related to how certain chips were packaged.
"This is everything that we have set out to gain," said Tessera
Chief Executive Henry Nothhaft in an interview with Dow Jones
Newswires. "This is a material victory for us and the rights of
innovators in general."
The commission issued a ban on the import of chips manufactured
by or on behalf of any of the companies. Additionally, the
commission issued a cease and desist order to Motorola, Qualcomm,
Freescale and Spansion halting the sale of infringing articles out
of their U.S. inventories.
The import ban, known as a "limited exclusion order," does not
affect downstream manufacturers, such as mobile phone makers, which
import products that already include the chips.
The ruling is subject to review by the Obama administration for
60 days. During that period, the companies can continue to import
the chips if they post a bond in the amount of 3.5% of the imported
articles.
Alex Rogers, legal counsel for Qualcomm, said the company is
disappointed with the decision and that Qualcomm will evaluate
whether to appeal after sifting through the arguments.
"I would expect that we would appeal, but we'll have to look at
it," he said.
Qualcomm said the ruling won't affect its chip shipments to the
U.S. In advance of the decision, Rogers said the company shifted
supply of the chips in question to Amkor Technology Inc. (AMKR), a
Tessera licensee.
Tessera's chip technology is currently used in mobile phones,
set-top boxes and other electronics equipment.
Nothhaft declined to provide any estimates or revenue guidance,
but said the ruling will materially impact the company
financially.In addition, he said the ruling was positive signal
that Tessera will come out ahead in a separate ruling related to
memory chip technology expected in July.
Wednesday's ruling overturns a previous ruling from December
that found two Tessera patents were valid, but weren't infringed by
the defendants.
Representatives of Spansion, Freescale, Motorola, and Advanced
Micro Devices weren't immediately available for comment.
A spokesman for STMicro said "they are obviously disappointed
with the ruling," but wouldn't comment further regarding ongoing
legal matters.
-By Jerry A. DiColo, Dow Jones Newswires; 201-938-5670;
jerry.dicolo@dowjones.com