Tessera Wins in Court Again

Highlights include Tessera Technologies, Inc. (TSRA - Analyst Report), Motorola Inc. (MOT - Analyst Report), Qualcomm Inc. (QCOM - Analyst Report), Spansion Inc. (SPSNQ - Snapshot Report) and Amkor Technology, Inc. (AMKR - Analyst Report).

On Wednesday May 20th Tessera Technologies, Inc. (TSRA - Analyst Report) announced that the International Trade Commission (ITC) issued a final determination in the action brought by Tessera against certain wireless manufacturers, (Wireless ITC action), finding Tessera’s patents are valid and infringed.

The ITC issued a Limited Exclusion Order that prohibits the importation of certain infringing electronic devices that use Tessera’s patented technology, which are imported by or on behalf of the named respondents. The Commission also issued a Cease and Desist Order against Motorola (MOT - Analyst Report), Qualcomm (QCOM - Analyst Report), Freescale and Spansion (SPSNQ - Snapshot Report), directing them to cease their unfair acts including selling infringing articles out of their US inventories.

TSRA’s record in court has been nothing short of sensational. The firm has won five major lawsuits and now receives royalties from all of the big four in the DRAM market. TSRA currently has 4 major litigation cases pending. These could provide significant ongoing, one-time income, or both.

Litigation Review and Update Per Management

Amkor (AMKR - Analyst Report) Arbitration - On Jan. 14, 2009, the International Chamber of Commerce's International Court of Arbitration issued to Tessera an award of $64.1 million, due by Feb. 15, 2009, for Amkor's material breach of its license agreement. This amount covers the time period March 2, 2002 through Dec. 1, 2008 and includes pre-judgment interest. (Settled and Paid)
Investigation No. 337-TA-630 (DRAM ITC Action) - On Jan. 6, 2009, the International Trade Commission (ITC) Administrative Law Judge (ALJ), citing the Court’s current caseload and responsibilities in other investigations, extended the deadline for issuing the Initial Determination in the action from Jan. 14, 2009 to March 6, 2009, and the date for issuance of the Final Determination (the target completion date) in the action from April 14, 2009 to July 6, 2009. (Extended to July 27th)
Investigation No. 337-TA-605 (Wireless ITC Action) - On Jan. 30, 2009, the ITC granted Tessera’s Petition for Review and will review the Initial Determination by the ALJ. The ITC’s Final Determination remains scheduled to be issued by April 3, 2009. (Settled)
Investigation No. 337-TA-649 (Subcon ITC Action) - On Feb. 2, 2009, Tessera requested that the ITC pause the proceedings until the ITC has made a Final Determination in the Wireless ITC Action. The chief reason for Tessera’s request is that there are disputes common to both the Subcon ITC Action and the Wireless ITC Action now under review by the full ITC, so that it would be a waste of judicial resources, as well as the parties’ resources, to proceed to trial before the ALJ in the Subcon ITC Action until both the Court and the parties have the benefit of the ITC’s Final Determination in the Wireless ITC action.