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Judge Robinson denies motion to vacate, modify, or correct arbitration award relating to patent licensing agreement

In Tessera, Inc. v. Amkor Technology, Inc., C.A. No. 12-852-SLR (D. Del. Dec. 10, 2014), Judge Sue L. Robinson recently denied plaintiff’s motion to vacate, modify, or correct an arbitration award connected with the parties’ ongoing patent infringement dispute.  The parties had previously entered into an agreement that licensed plaintiff’s technology and patents to defendant, and disputes would be settled by arbitration.  Id. at 1-2.  The parties had adjudicated a number of disputes in arbitration relating to royalty payments, in which plaintiff was awarded damages that also included damages based on conduct following the termination of the license agreement.  Defendant unsuccessfully attempted to appeal this award in California state court.  Its motion before this Court to vacate, modify, or correct the arbitration award claimed that the parties had agreed to arbitrate license royalties, but not “patent infringement after the termination of their license”; as a result, the arbitration award’s inclusion of damages based on post-termination conduct was improper, and this Court, not the California state courts, had jurisdiction to review the arbitrator’s award of post-termination damages.  Id. at 5.

The Court disagreed, noting that the agreement’s arbitration clause was broad enough to cover post-termination damages.  Id. at 5.  In addition, the Court chose to abstain from hearing the matter, citing the fact that the license agreement was governed by California law, that the California state courts were already involved in the matter, and that the merits of defendant’s arguments had already been rejected by the California courts.  Id. at 6-7.  Further, defendant had “invoked the jurisdiction of the California courts until it was handed an adverse decision.”  Id. at 7.

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