Toshiba sued by Tessera for alleged breach of contract

If your tech business licenses your products and intellectual property to another company, then you need someone on your side -- an intellectual property lawyer -- to monitor the arrangement and protect your interests. In some cases, businesses start out with a good agreement that lasts for years, but somewhere along the line one party stops honoring the contract in full.

It may be possible, then, to correct the issue without going to court, but sometimes litigation is necessary.

That is case for Tessera, Inc., according to a lawsuit the tech licensing company recently filed in California state court. 

The case relates to a license agreement Tessera entered into with Toshiba Corporation in 1999. The agreement allowed Toshiba to use some of Tessera's semiconductor packaging technologies, and Tessera received royalties in exchange.

According to the lawsuit, Toshiba honored the contract and paid royalties for years, but in 2011 an independent audit found that Toshiba had not been paying the full amounts. Tessera claims that, after auditors calculated the amount owed, Toshiba stopped payment of all royalties in 2013.

The lawsuit claims breach of the implied covenant of good faith and fair dealing, breach of contract and declaratory relief. Tessera's CEO has stated that the company is still interested in reaching a fair, out-of-court settlement.

Sound legal planning can help businesses avoid disputes and the distraction and cost of litigation. When going to court is necessary, however, you need experienced trial lawyers on your side to protect your interests.

For more on these matters, please see Shulman, Hodges & Bastian's commercial litigation overview.

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