Arbitration between Tessera and Amkor Results in Over $130 Million in Additional Revenue for Tessera
Friday, February, 22, 2013
In its arbitrated dispute between Amkor Technology, Inc, Tessera Technologies, Inc. (NASDAQ: TSRA), a holding company with operating subsidiaries in Intellectual Property and DigitalOptics, was pleased that the International Court of Arbitration of the International Chamber of Commerce (ICC) issued an award in its favor for the second time in four years. Now, the company is expecting at least another $130 million from Amkor to be paid, in addition to the $20 million Amkor paid to Tessera last year, although the final amount will not be known for some time. The money being paid is a result of a patent license agreement between the two companies and royalties that are owed from it.
Bernard Cassidy, Tessera Intellectual Property Corporation’s president, stated, “We help advance innovation by rewarding engineers whose inventions have been successfully implemented by commercial entities. We are grateful that the tribunal has ruled in our favor in this dispute – by doing so they have confirmed the strength of the Tessera, Inc. patent portfolio as well as the bedrock legal principle that companies should abide by their agreements.”
Arbitration between the two companies has been an ongoing process spanning four years, and this win marks the second award given to Tessera, Inc. within that four-year time span. In addition to this most recent award, an arbitrator ruled in Tessera’s favor in 2009 for a reward of $64.1 million. However, due to the confidentiality of arbitration and the ICC’s rules, the details regarding payment and timing of payments is unknown.
Tessera, Inc. has stated that it will continue to pursue its patent rights case against Amkor, as the company has infringed on Tessera, Inc.’s intellectual property rights, according to the arbitrators’ ruling.
According to the ruling, the amount that is eventually paid to Tessera, Inc. could change due to several factors, including unknown market or industry conditions; potential changes in patent laws, the regulation or enforcement of those laws, or other factors that might affect Tessera’s ability to protect or realize the value of its intellectual property; the expiration of license agreements and the resulting expiration of related royalty income; and the failure, inability or refusal of licensees to pay royalties that are owed to the license holder.