Tessera says panel finds patents valid in Amkor dispute
By Supantha Mukherjee
BANGALORE, Oct 28 (Reuters) - Chip technology developer Tessera Technologies Inc (TSRA.O) said an arbitration panel found its patents valid in a dispute against Amkor Technology Inc (AMKR.O), sending shares up 25 percent.
The patents relate to chip technologies used in DRAM and certain wireless applications.
Tessera said the panel found that Amkor owes it monetary damages for failing to pay royalties on a broad range of products.
"We expect that the monetary award will be material," Chief Executive Henry Nothhaft said in a statement.
Nothhaft said the settlement is expected in the first quarter but refused to comment on the financial aspects.
Amkor had highlighted a number of $115 million as a risk related to the litigation and that is the only number available in the public domain related to the award, Pacific Crest Securities analyst Kevin Vassily said by phone.
If Amkor still wants to be making products using the package which is infringing Tessera's patents, they will have to sign a new license pact which will bring in more revenue for Tessera, analyst Vassily said.
Vassily has an "outperform" rating on the stock.
"They (Amkor) were a longstanding licensee and a number of years ago a disagreement arose over what products were subject to royalties. At that time they stopped paying," CEO Nothhaft said by phone.
"As the contract has a mandatory arbitration clause, rather than going to a court and settle this, we went to an international chamber of commerce arbitration process to settle it," Nothhaft added.
When contacted, Amkor spokesperson couldn't confirm or deny the matter.
Shares of the company rose 25 percent to $16.20 in trading after the bell, after closing at $12.91 Tuesday on Nasdaq. (Reporting by Supantha Mukherjee in Bangalore; Editing by Saumyadeb Chakrabarty)
