Patent Law

Tessera shares up on re-exam action

By Lawrence B. Ebert, Esq.

Shares of Tessera Technologies Inc. rallied Monday after the San Jose, Calif.-based company said the U.S. Patent and Trade Office (PTO) extended the reexamination of the company's patent related to semiconductor packaging technologies used in the wireless industry.

Tessera said the examiners' decision is known as an action closing prosecution, and gives Tessera the opportunity to respond within one month to questions raised by the PTO examiners. Tessera said it plans to respond.

Shares of Tessera rose 11% to $19.18 on heavy volume of 1.4 million. The issue's 30-day average volume is about 1 million.

Barron's covered the same event in the following way:

Chip industry miniaturization specialist Tessera Technologies (TSRA) said the U.S. Patent and Trademark Office late Friday [June 13] issued an ?office action? which rejects certain claims of the company?s patent No. 6,433,419. Tessera said it will respond to the decision, which it said is known as an ?Action Closing Prosecution.? The examiners may then reopen prosection [sic: prosecution], issue another ACP, or issue a notice that Tessera may appeal to the Board of Patent Appeals and Interferences.

Here?s the really interesting part: in its release, Tessera contends that the average patent re-examination takes 5-8 years. Tessera figures this case is not going to finish before the patent expires in September 2010. They are going to drag this out as long as possible, is what they are basically saying. And until the process is concluded, the patent remains in force. The patent is at the heart of two pending U.S. International Trade Commission cases in which Tessera makes claims against a number of companies.

So despite what is on the surface a negative ruling, the Street seems happy to have this drag on as long as possible: TSRA today is up $1.82, or 10.5%, at $19.16.

Here's the Tessera press release:

Tessera Technologies, Inc., a leading provider of miniaturization technologies for the electronics industry, today announced the U.S. Patent and Trade Office (PTO) late on Friday, June 13, 2008, issued an office action in the ongoing inter partes reexamination of Tessera's U.S. Patent No. 6,433,419 (the '419 patent), which relates to semiconductor packaging technologies used in the wireless industry, among other applications. The examiners? decision, which rejects certain claims of the '419 patent, is known as an Action Closing Prosecution (ACP), and gives Tessera the opportunity to respond within one month to questions raised by the PTO examiners.

Tessera plans to respond to the ACP. The examiners may then reopen prosecution, issue another ACP, or issue a notice that Tessera may appeal the examiners? decision to the Board of Patent Appeals and Interferences. There is no deadline for further action by the examiners. Tessera anticipates it ultimately will be required to appeal the examiners? decision.

According to a recent study of inter partes reexamination statistics by the Institute for Progress, the average pendency of inter partes reexaminations where appeals are involved is five to eight years, which means that the reexamination of the ?419 patent likely will not be completed before the ?419 patent expires in September 2010. The claims of a patent undergoing reexamination are not invalidated until a reexamination certificate cancelling the claims is issued. A certificate can only be issued after all actions closing prosecution are concluded, and all appeals have been exhausted.

A first ACP was issued by the examiners on February 19, 2008. Following review of submissions in response to that ACP, the examiners issued the second ACP on June 13, 2008.

The press release announcing the "Action Closing Prosecution" is titled PTO Extends Reexamination of Tessera Patent.

On the surface, strictly Alice-in-Wonderland, but this process could drag on until patent expiry.

Full post as published by IPBiz on June 17, 2008 (boomark / email).