Tag Archives: license agreement

amkor - legal

Amkor Announces Interim Ruling In Tessera Arbitration

Chander-based Amkor Technology, Inc. announced that on July 5, 2012, the Arbitration Panel from the International Court of Arbitration of the International Chamber of Commerce issued an interim order in the arbitration proceedings initiated in August 2009 relating to Amkor’s license agreement with Tessera, Inc.

The panel found that no royalties are due to Tessera on seven of the ten asserted U.S. patents. The panel also found that royalties are due on four foreign patents related to U.S. patents that the panel previously found to be royalty bearing. The panel has reserved for later decision the issues of the amount of royalties and pre-judgment interest due, the allocation of costs, and the question of whether Tessera intends to pursue its allegations regarding other patents which have not yet been addressed.

The Company currently estimates that the damages and interest could be around $30 million with respect to the foreign patents. The factors affecting the calculation of damages and interest with respect to the U.S. patents are more complex and require further analysis before the Company can make an estimate, which could be more or less than the amount estimated for the foreign patents. In both cases, the ultimate amount of damages and interest is subject to the determination of which package families the patents apply to, whether those packages meet criteria previously laid out by the panel, overlaps among the packages, the final date through which royalties are applicable and other factors.

The panel also ruled that the license agreement, under which the royalties were awarded, was terminated by Tessera as of February 17, 2011. Based in part on this ruling that the license has terminated, on July 6, 2012, Tessera filed a complaint in the U.S. District Court for the District of Delaware. The complaint seeks injunctive relief and damages with respect to Amkor’s alleged infringement of one of the U.S. patents that the arbitration panel found to be royalty bearing. The Company strongly disputes Tessera’s claims and intends to vigorously defend against them.

“Although we are disappointed that the panel did not rule in our favor on all of the claims, we prevailed on the patents for which Tessera made the largest claims for royalties and we expect that the amount of the award will be well below the more than $400 million claimed by Tessera in the arbitration,” said Ken Joyce, president and chief executive officer of Amkor. “Furthermore, we do not expect that the final amount of the panel’s award will have a material impact on our liquidity, and we do not believe the ruling will interfere in any significant way with our ability to use our technology, conduct our business or service our customers.”

The Company expects to record a charge to operating results in the second quarter 2012 in respect of the panel’s award. Payment of the award is not anticipated before the fourth quarter 2012, after the proceedings to determine the final amount of the award are concluded. We expect to use cash on hand and/or proceeds from borrowings under our existing credit line or other sources to make the payment.

Amkor is a leading provider of semiconductor packaging and test services to semiconductor companies and electronics OEMs. More information about Amkor is available from the company’s Securities and Exchange Commission filings and on Amkor’s website: www.amkor.com.


Failing To Honor Copyrights On Software Could Cost Company Thousands

If you use software in your business, a little knowledge about an often misunderstood area of the law could save you tens and possibly hundreds of thousands of dollars. The area of the law is copyrights — but don’t stop reading just because you know you would never illegally copyright software. I have had many clients come to me faced with serious financial sanctions who thought they did nothing wrong.

Perhaps you have never heard of the Business Software Alliance. You are lucky. If you don’t have written agreements with your employees about computer usage, you need to reconsider. And if you have no interest in reading that long license agreement before you click “accept” … well I can’t blame you, but you should at least read it before you make any extra copies of the program.

Let’s start with the basics. Microsoft owns the copyright on Word, Auto Desk owns the copyright on AutoCAD, and Adobe owns the copyright on Acrobat. If you “bought” any of those programs or any other software, you really only licensed them. Whether you bought a CD in the store, downloaded it from the Internet for “free” or it came bundled on your new computer, your use is subject to whatever conditions the copyright owner wishes to impose. If you exceed your permission, then you are violating the copyright. Another basic — you are responsible for the actions of your employees, even if you did not know they were violating the copyright law.

Now let’s discuss a few common myths. Each of the following statements is absolutely false: (1) I can make extra copies for my own use as long as I don’t give or sell them to third parties; (2) I don’t use that computer anymore, so I can just copy the program onto the computer that I do use; (3) it was free on the Internet so it is in the public domain; and (4) they are not interested in going after a small company like mine.

The only way to really know whether an archive copy is permitted or how many different computers you can legally load the software onto is to read the terms of the license that you accepted when you downloaded or installed the software. Don’t assume. Don’t rely on the representative who sold it to you and don’t rely on your tech person. In almost every instance where one of my business clients was accused of copyright infringement, the business assumed or believed that the extra copies were permitted.

Finally, let’s discuss the myth that your business is too small to attract attention and why you should familiarize yourself with the Business Software Alliance (BSA). The BSA is a trade association for copyright owners and it has one purpose — the protection of the copyrights of its members. Its members range from big players like Adobe and AutoCAD to smaller software companies. By turning these enforcement issues over to the BSA, the companies can focus on what they do best — write and develop software. What the BSA does best is locate, negotiate with, and sue infringers. A popular source of information for the BSA is disgruntled former employees. The BSA periodically runs advertisements offering rewards for information. No case is too small and no business is too small for the BSA. Also, the BSA’s idea of negotiation is to slightly discount the full damages. Since copyright laws provide for statutory damages of up to $150,000 per infringement, plus attorney fees, the exposure is significant and the alternative to accepting their proposals is daunting.

With just a few preventative measures, you can protect your business. First, educate your employees on the dangers of unauthorized copying and implement written policies and contracts that prohibit or provide a protocol for any software downloads or copies. By having appropriate policies, you may decrease the amount of damages that can be claimed against you. You will still be responsible for your employees’ conduct so it is important to educate and re-educate your employees on the importance of following the policy.

Another preventative measure is to review your current software and licenses. Un-install any extra copies that are not authorized. When you add a new computer, do not install any software from previous computers without reading the license provisions and determining whether the new install is authorized.

Most importantly, treat copyright protected intangible property such as computer software like you would treat tangible property such as fixtures and equipment. Teach your employees to do the same. You wouldn’t steal or even borrow your neighbor’s car without permission. Respect the intangible property of others in the same way and you are far less likely to find yourself on the wrong side of a copyright infringement claim.