An appeals court has affirmed an International Trade Commission ruling saying Elpida Memory Inc. (6665.TO), Smart Modular Technologies Inc. (SMOD) and several other technology companies didn't infringe on Tessera Inc.'s (TSRA) patents for chip packaging.

The ITC had found certain products infringed the patents, but they were "exhausted," while other products did not infringe.

The U.S. Court of Appeals for the Federal Circuit on Monday affirmed the lower court's determination that the companies didn't violate Tessera's patents because the Commission's decision was based on "substantial" evidence. The court also vacated the ITC's decisions regarding certain patents that have now expired.

The ruling deals a blow to Tessera, whose primary business is licensing its technology. According to the court filing, it has licensed the patents in the suit to more than 60 semiconductor technology companies since the late 1990s.

Tessera President and Chief Executive Robert Young said in a statement that the company has the opportunity to appeal the ruling and that it's continuing to review "other avenues open to use to ensure we are fully compensated for use of our technology."

"Although we are somewhat disappointed in today's decision by the U.S. Court of Appeals, we do not believe it will have a material impact on our business," he said.

Shares, down 22% in the year to date, ended the session down 4.5% at $17.26.

The technology at issue enables a semiconductor manufacturer to protect chips from mechanical and thermal damage without contaminating the endpoints, or electrical terminals, that connect the package to another device such as a printed circuit board.

Tessera initially filed a complaint with the International Trade Commission in 2007, alleging 18 memory companies infringed on its technology. Ten companies--including Elpida, Smart Modular, Acer Inc. (ACEIY, 2353.TW) and Nanya Technology Corp. (2408.TW)--remained in the case.

-By Shara Tibken, Dow Jones Newswires; 212-416-2189; shara.tibken@dowjones.com

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