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Tessera Loses Appeal Over Semiconductors in Patent Dispute

Tessera Technologies Inc. lost an appeals court ruling in its efforts to get new licensing revenue from makers of computer-memory chips, including Acer Inc. and Nanya Technology Corp.

The U.S. Court of Appeals for the Federal Circuit today upheld a trade agency’s finding that the companies weren’t infringing a Tessera patent. The court vacated the agency’s finding of no violation of two other patents because they have expired.

Tessera owns patents related to packaging that protects silicon wafers from damage while allowing the chips to be made smaller and faster. The patent that was the subject of the case before the U.S. International Trade Commission covers a method for encapsulating wafers without contaminating the terminals that connect the chips to a circuit board.

The appeals court said today that the commission was correct to find in December 2009 that the patented innovation related to a different layer of the packaging than what is used by the chipmakers.

The court also said Tessera couldn’t make a claim against products made by Elpida Memory Inc. of Tokyo because the company bought its products from firms that already had a license with Tessera, exhausting the patent rights.

Tessera General Counsel Barney Cassidy said in an interview that the company may file a request asking the Federal Circuit to reconsider the court’s non-infringement finding and the Elpida issue.

Pursuing Claims

The company also is pursuing patent claims against the chipmakers in district court. By vacating the non-infringement finding on the other two patents, the Federal Circuit eliminated the ability of the chipmakers to use the ITC finding in the civil suit, he said.

“It would have been a weapon the defendants used against us and we neutralized it,” he said, adding the company will continue to ask that the chipmakers license its entire patent portfolio.

Tessera fell 82 cents, or 4.5 percent, to $17.26 at 4:29 p.m. New York time in Nasdaq Stock Market trading.

San Jose, California-based Tessera filed complaints against companies that refused to license the technology and in December won an appeals court ruling against Qualcomm Inc., Spansion Inc. and STMicroelectronics NV.

Import Ban

The ITC, a quasi-judicial agency that investigates claims of unfair trade practices, said the computer-chip makers weren’t violating Tessera’s rights. Tessera had sought an import ban on certain dynamic random-access memory, or DRAM, chips that act as the main memory in computers and electronics.

Royalties and licensing fees accounted for $279.6 million, or 93 percent of the company’s 2010 revenue, Tessera said in its annual report.

The companies named in Tessera’s complaint included Acer of Taipei; Kingston Technology Co. of Fountain Valley, California; Nanya of Taoyuan, Taiwan; Powerchip Semiconductor Corp. of Hsinchu, Taiwan; Ramaxel Technology Ltd. of Hong Kong; and Smart Modular Technologies Inc. of Fremont, California.

The case is Tessera Inc. v. ITC, 10-1176, U.S. Court of Appeals for the Federal Circuit (Washington). The ITC case is In the Matter of Semiconductor Chips with Minimized Chip Packaging, 337-630, U.S. International Trade Commission in Washington.

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