What Next for Tessera?

Implications: With the '419 patent now back for another few months of patent review, Tessera has a clean shot at two big legal events: resolution of the Amkor arbitration, and an initial decision from the ITC.  The scary part: almost everyone seems to expect that TSRA will win both.

Analysis: Tessera has been riding a rollercoaster of legal news the last many months, with headlines out of the ITC and the PTO both causing sharp movement in the stock and public perception as well.  This summer, two more big events loom: the end of the Amkor arbitration, and an initial decision from the ITC.

The Amkor arbitration has thus far been something of a black box.  Could Amkor be challenging TSRA's patents on grounds of validity?  Maybe.  And obviously similar challenges are working (for now) at the Patent Office.  But such a strategy seems unlikely because, to beat a patent in arbitration, Amkor would have to carry a heavy evidentiary burden -- much heavier than the one in play at the Patent Office.  That leads me to think that the real fight here is probably a fight about royalties (probably which products are covered by the contract, and which not) rather than about the patents per se.  Put differently, this is about how much Amkor owes, not whether Amkor owes.

The ITC hearing has similarly been a somewhat quiet affair.  This time, the reason is that almost all of the juicy arguments and documents remain under seal.  That said, we know that the ALJ in the fight originally thought that the case should be frozen until the PTO finishes its review; and now that the case is back, against his better judgment, one wonders how he will look at the patent validity issues in the case.  After all, although he is not allowed to defer to the Patent Office's views, he certainly will remember them as he does his work. If he found the analysis convincing enough last time to freeze the case, is it possible that he will hear similar arguments this time and again find them convincing -- this time enough to invalidate the patents as part of his own investigation?