Tessera Says ITC Overturns Stay Order In Wireless Action Case - Update

(RTTNews) - Tessera Technologies Inc. (TSRA | news | PowerRating | PR Charts ) announced Thursday evening that the International Trade Commission, or ITC, has overturned the recent decision of the Administrative Law Judge to stay the company's wireless ITC action against Motorola Inc. (MOT | news | PowerRating | PR Charts ), Freescale Semiconductor (FSL | news | PowerRating | PR Charts ), Qualcomm Inc. (QCOM | news | PowerRating | PR Charts ) and others. The company said it was orally informed about the decision by the General Counsel's Office of the ITC and added that it has not yet received the ITC's written notice of the decision. Tessera said it expects the written notice will be available shortly and added that it expects the case to go forward.

The San Jose, California-based Tessera requested the International Trade Commission in May 2007 to institute an investigation regarding infringement of the company's patents by Qualcomm, Freescale, Motorola, ATI Technologies, ULC, Spansion Inc., Spansion LLC, and ST Microelectronics, N.V. The complaint centers on computer chips used in mobile phones, computers and digital cameras. The company receives royalties from Intel Corp. (INTC | news | PowerRating | PR Charts ), Sony Corp. (SNE | news | PowerRating | PR Charts ) and Siemens AG (SI | news | PowerRating | PR Charts ) that use its technology, while others have refused to pay. The respondents filed a motion in February this year, seeking to stop the ITC action from proceeding, in view of recent actions by the Patent and Trademark Office or PTO regarding the reexamination of three Tessera patents. At the request of one of the defendants involved in a legal action with the company, the three patents were placed into reexamination proceedings. An ITC judge issued a decision in February to stay the company's patent infringement action against Motorola and others, pending completion of reexamination proceedings before the U.S. Patent and Trademark Office. The reexaminations of the patents are ongoing.

On March 4, Tessera petitioned the U.S. International Trade Commission, or ITC, to review the recent decision to stay the company's wireless ITC action. The ITC's staff had also filed its own petition arguing against the stay.

Tessera had said in February that it received three new office actions from the PTO, which rejected certain claims of three of its patents that are being asserted in pending legal actions. On February 20, Tessera received from the PTO an office action in the Inter Partes reexamintion of Tessera's '893 patent, rejecting 25 of 66 claims of the patent. The next day, the company received from the PTO an office action in the Inter Partes reexamination of its '419 patent, rejecting 23 of 29 claims of the patent.

Tessera also said last month that it received the PTO's first office action in the reexamination of the '326 patent, rejecting 14 of the 29 claims of the patent and confirming 3 claims as valid. The company noted that the office action for the patent is non-final and said that it would have multiple opportunities to respond to the patent examiner.

Earlier this month, Tessera issued statements regarding the mischaracterization of its patent's validity and on the associated legal proceedings.

Senior vice president and general counsel, Scot Griffin stated, "Nothing issued by the U.S. Patent and Trademark Office in these reexaminations has overturned our patents. We believe the market may have misunderstood the PTO's terminology, and we are taking this opportunity to clarify the process."

The company had said that the PTO issued office actions regarding claims in five of the company's patents and added that it anticipates an initial office action for a sixth patent sometime in the coming weeks. According to the company, these office actions are a usual step in the PTO reexamination process and are in no way a final determination on the validity of the patents.

Tessera noted that even after a final determination in the PTO, it would have ongoing opportunities to appeal any decision and the patents would remain in force throughout all appeals.

TSRA closed Thursday's regular trading session at $16.49, down $0.40 or 2.37% on a volume of 3.01 million shares.

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