Tessera counts on reversal of patent decision, fortunes

By John Tilak

BANGALORE, March 19 (Reuters) - Chip technology developer Tessera Technologies Inc (TSRA.O: Quote, Profile, Research, Stock Buzz) is counting on a reversal of a decision in a patent case to help turn around its fortunes.

The case could go either way, analysts say, but a negative outcome would ensure a long, costly legal battle and call into question the company's ability to sustain revenue growth over the long run. Tessera collects royalties from companies such as Intel Corp (INTC.O: Quote, Profile, Research, Stock Buzz), Sony Corp (6758.T: Quote, Profile, Research, Stock Buzz) and Siemens AG (SIEGn.DE: Quote, Profile, Research, Stock Buzz) that use its technology, but others have refused to pay.

"We want to level the playing field," said Scot Griffin, the company's general counsel.

Tessera derives about 80 percent of its revenue from licensing its chip packaging technology that compresses the size of semiconductors. It posted revenue of $195.7 million in 2007.

The company is embroiled in a legal battle with Motorola Inc (MOT.N: Quote, Profile, Research, Stock Buzz), Freescale Semiconductor Inc, Qualcomm Inc (QCOM.O: Quote, Profile, Research, Stock Buzz) and others to try to force them to pay royalties for using what it says is its technology.

Tessera's complaint centers on computer chips used in mobile phones, computers and digital cameras that it says infringe on its patents.

Last month, the U.S. International Trade Commission, a federal agency, halted proceedings of Tessera's patent infringement case until the U.S. Patent and Trademark Office concludes a reexamination of the patents.

Investors reacted by clobbering the stock. Since the stay, Tessera's stock has lost nearly 60 percent of its value. It closed at $16.15 on Tuesday, down from its 52-week high of $46.43 last June.