Update: Tessera wins ITC patent ruling

SAN JOSE, Calif. — The U.S. International Trade Commission (ITC) has issued a limited exclusion order prohibiting the import of chips from six companies it has determined infringe two packaging patents of Tessera Technologies Inc. The ruling overturns a December decision by an administrative law judge.

The latest ruling applies to certain chips from ATI Technologies (now part of Advanced Micro Devices Inc.), Freescale Semiconductor, Motorola Inc., Spansion LLC and ST Microelectronics NV that the ITC said infringe Tessera's '326 and '419 patents. Tessera said the patents describe a plastic layer that allows a die to flex as its package heats and cools, enabling smaller packages.

Qualcomm said it disagrees with the decision but has already moved production of chips in question to Amkor which has a license for the Tessera technology. Other companies could avoid the import ban by taking a license from Tessera or by moving packaging work to any of 60 companies Tessera already has licensed.

The list of potentially affected chips has so far remained confidential. However, once the order is made final, instructions on which chips are banned would be given to customs officials at which time the details may be made public.

Tessera said the decision affects chips or systems using them such as handsets, set-top boxes and radios. However it only covers products made by or for the companies in question. Other companies using or importing the products would not face the ban.

The ITC decision was sent to President Barack Obama for a 60-day review. After the review period the affected companies can appeal the decision in federal court.

The patents in question are being re-examined by the U.S. Patent and Trademark Office. The agency has issued final rejections of all of the asserted claims in both patents as invalid based on prior art, but Tessera is contesting the final rejections, according to Qualcomm. The patents will expire in September 2010.

Tessera has a parallel case still in progress seeking a general exclusion order against a number of DRAM and module makers including Acer, Inc., Elpida Memory, Inc., Kingston Technology Co., Inc., Nanya Technology Corporation, Powerchip Semiconductor Corp., Promos Technologies Inc., Smart Modular Technologies, Inc. and TwinMOS Technologies. That case involves three patents similar in kind to the two in the current ITC ruling.

Tessera's stock was up 20 percent in the wake of the ruling. The company's stock fell 40 percent after the December ruling against the company and had rebounded in recent days in anticipation of a favorable ruling. The ITC investigation began in may 2007.