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March 5, 2008

Punted

The power of patents to stock punters was apparent on Tuesday as Tessera Technologies shares were battered in the wake of a non-final office action in a patent reexamination; the price ravaged 39%, losing $8.99, closing at $14.07. Like a kindergarten "time out," share trading was halted mid-day after a free-fall of 52%; trading in massive volume. Tessera's patent gravy train has reaped $250 million in licenses so far.

Taiwan-based Siliconware Precision Industries instigated the reexamination. Orrick, Herrington and Sutcliffe represented Siliconware. Patent Hawk, patent killer par excellence, participated in the prior art search to invalidate Tessera patents.

Tessera CEO Bruce McWilliams practically went unheard in reminding that non-final office actions are not at all unusual, and not the bottom of the ninth inning by any means.

Posted by Patent Hawk at March 5, 2008 12:08 AM | Prosecution

Comments

Seems like working in the reexamination unit would be an opportunity to make some pretty good money. Just buy/short a stock before you send out an action in a case that's in litigation.

Posted by: 2600examiner at March 5, 2008 6:24 AM

What do you bet the SEC has their eyes on that?

Posted by: ruralcounsel at March 5, 2008 12:01 PM

"Seems like working in the reexamination unit would be an opportunity to make some pretty good money. Just buy/short a stock before you send out an action in a case that's in litigation."

Feel free to try that strategy. And then break out your stop watch and see how long it takes the SEC to show up at your door.

Posted by: JD at March 5, 2008 12:31 PM

Unfortunately the SEC is probably about as efficient as the PTO. Unless you traded in huge quantities there's no way they'd find out. People on Capitol Hill get away with insider trading all the time. That said, I think there's money to be made legally. Insider trading applies only to nonpublic information. Once an action is available through public pair it's public information. There should be a window to act before the market reacts.

Posted by: 2600examiner at March 5, 2008 1:26 PM

Remember that Martha Stewart sold to avoid a loss of about $40k and they were onto her. $40k may be, or may not be, a huge quantity, depending on your perspective.

Doesn't the PTO require examiners to disclose any securities they own? I seem to remember filling out a bunch of forms when I was there.

Posted by: JD at March 5, 2008 2:16 PM

I don't recall any details, but we're supposed to disclose anything more that we have more than an marginal interest in. $40K is huge to me. I owe more in student loans than I have in total assets.

Tessera stock dropped yesterday not Monday (seemingly in response to news reaching the wire). It also dropped on 2/26 due to an ITC decision.

The action was counted and mailed on Friday 2/29. I checked one of my actions has been counted and mailed today (not scanned yet) and in the status in public pair it says Non-Final Action mailed.

As a curious person (and former economics double major) this intrigues me enough that I am going to write down the serial numbers of cases currently docketed to people in the reexamination unit and watch what happens to the stock prices of the litigating parties when news of the action reaches the general public.

Posted by: 2600examiner at March 5, 2008 3:09 PM