Dylan McGrath EE Times (06/02/2009 5:31 PM EST)

SAN FRANCISCO—Motorola Inc. will pay royalties to Tessera Technologies Inc. on shipments of certain electronic products—including cell phones—under the terms of a pre-negotiated license agreement announced by Tessera Tuesday (June 2).

The worldwide license agreement settles all outstanding litigation between the two companies, Tessera said. Financial terms of the license agreement or royalty amounts were not announced.

The license agreement comes on the heels of a recent ruling by the U.S. International Trade Commission (ITC), which issued an exclusion order prohibiting the import of chips from six companies—including Motorola—that it determined infringe two packaging patents held by Tessera. The ruling overturned a December decision by an administrative law judge.

Following the May 20 ITC ruling, C.J. Muse, a semiconductor capital equipment analyst with Barclays Capital, raised his earnings forecst for Tessera and predicted that Morotola would start paying Tessera royalties through an option that the companies' had already put in place. Muse said other defendants could likely begin paying as well.

Motorola will pay royalties on shipments of products including cell phones, set-top boxes and radio equipment that incorporate unlicensed chips that use Tessera's patented TCC technology, Tessera said.

Tessera (San Jose, Calif.) also Tuesday increased its second quarter revenue targets, saying the company now expects revenue to between $59 million and $61 million, up from the company's April estimate of $46 million to $49 million.

Second quarter microelectronics revenue, all of which will be royalty and license related, is now expected to be between $53 million and $55 million, Tessera said, up from the previous estimate of $40 million to $42 million.

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