Department Manager, September 23, 2002
Exhibit 10.9
| Department Manager, |
September 23, 2002 | |
Business Development Department
Semiconductor & Integrated Circuits
Hitachi, Ltd.
Nippon Building, 0-0, Xxxxxxxx 0-xxxxx, Xxxxxxx-xx,
Tokyo, 100-0004 Japan
| Re: | Letter Amendment, dated September 23, 2002, to TCC Master License Agreement, dated July 7, 1994, between Hitachi, Ltd., and Tessera, Inc. (the “TCC License”) |
Dear Xx. Xxxxxxx:
The purpose of this letter is to explain the background for the Letter Amendment and to clarify the business compromise reached between Hitachi and Tessera. During negotiation of the Letter Amendment, the Parties attempted to take into account the possible package variations covered under the scope Xxxxxxx’s patent claims, examining such items as substrate thickness, solder ball diameter and pitch, size of semiconductor chips, etc. However, the Parties were unable to reach agreement on certain types of F-µBGA Packages and whether such packages are covered by Xxxxxxx’s patents and thus by the proposed license grant to Hitachi under the Letter Amendment.
In order to resolve the dispute and avoid litigation, the Parties have agreed to disagree and, instead, have arrived at a business arrangement which will allow Hitachi to make, have made, use, sell and offer for sale certain devices without breaching the Letter Amendment. In order to better allow perfunctory adherence to the Letter Amendment, TCC License and the terms set forth in this letter, the Parties have agreed to simplify the identification of the royalty bearing F-µBGA Packages to the following information in combination with the definition of “F-µBGA Package” in the Letter Amendment:
| • | The Parties agree that Type 2 F-µBGA Packages having a package substrate thickness [*] are within the scope of the Letter Amendment and that Hitachi will pay royalties for such packages; |
| • | The Parties disagree that certain Type 2 F-µBGA Packages having a package substrate thickness of [*] are within the Tessera Patent claims. However, such packages are being shipped in comparatively lower volumes by Hitachi; and therefore, [*]; |
| • | The Parties could also not reach agreement on whether Type 2 F-µBGA Packages having a package substrate thickness [*] are within the Tessera Patent claims. However, such disagreement is merely theoretical since Hitachi does not currently produce Type 2 F-µBGA Packages using substrates in this thickness range. Therefore, if Hitachi ever makes a Type 2 F-µBGA Package using a package substrate having a thickness [*] Hitachi will contact Tessera and both Parties agree to negotiate a license in good faith to resolve coverage under the Letter Amendment; and |
| • | Lastly, the Parties agree that unintentional variations in the thickness of the package substrate in Type 2 F-µBGA Packages due to normal process variances that alter the thickness in an insignificant manner, will not be considered when determining substrate package thickness to the thickness ranges set forth above. |
On another matter, as a further business consideration, Xxxxxxx agrees not to assert any claims against Hitachi (including its sublicensees, subcontractors and customers) under Tessera US Patents 5,679,977 and USP 5,852,326 (including re-issue, re-examination, continuation, continuation-in-part and divisional applications, and foreign counterparts of either of these patents) for manufacture, use, sale, or offer for sale by Hitachi (including its sublicensees) or under its “have made” right under the Letter Amendment of:
| • | [*] |
| • | [*] |
If the terms of this Side Letter are acceptable, please sign below and return one enclosed copy to us, retaining the second copy for your files.
| TESSERA, INC. | HITACHI, LTD. | |||||||
| By: | /s/ Xxxxxxxxxxx Xxxxxxx |
By: | [ILLEGIBLE] | |||||
| Title: | SVP, LICENSING BUSINESS |
Title: | DEPT MANAGER BUSINESS DEVT DEPT. SIC | |||||
| Date: | SEPT 26, 2002 |
Date: | 9/26/02 | |||||
Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as [*]. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission.
September 23, 2002
Department Manager,
Business Development Department
Semiconductor & Integrated Circuits
Hitachi, Ltd.
Nippon Building, 0-0, Xxxxxxxx 0-xxxxx, Xxxxxxx-xx,
Tokyo, 100-0004 Japan
| Re: | TCC Master License Agreement, dated July 7, 1994, between Hitachi, Ltd., and Tessera, Inc. (the “TCC License”) |
Dear Xx. Xxxxxxx:
This letter (the “Letter Amendment”) amends the TCC License based on our agreements during my recent visits to Hitachi. Generally, the purpose of the amendments is to expand the scope of the TCC License to include TCC packages having a semiconductor die in a “face-up” orientation, and to establish a royalty rate Hitachi will pay for such face-up packages.
Definitions
The terms used herein that are defined in the TCC License shall have the same meaning when used herein unless the context hereof shall otherwise require or provide. The following additional definitions apply to this letter:
The term “F-µBGA Package” means a [*]:
| 1. | Fine Pitch F-µBGA Package [*] (“Type 1 F-µBGA”), |
| 2. | Fine Pitch F-µBGA Package [*] (“Type 2 F-µBGA”). |
The term “Licensed Package Assembler” means a party licensed by Tessera to assemble, use and sell TCC packages for others. Xxxxxxx agrees to periodically provide Licensee a list of such parties.
The term “Billable Pin” means [*]
F-µBGA License Grant
Subject to the terms and conditions hereinafter set forth and Licensee’s payment of the royalties stated herein, Tessera hereby grants Licensee a non-exclusive license to the Technology to manufacture, package and/or assemble ICs into Type 1 and Type 2 F-µBGA Packages and use, import, offer to sell or sell such Type 1 and Type 2 F-µBGA Packages world wide. In addition, Licensee is granted the right to have Type 1 and Type 2 F-µBGA Packages made for Licensee by any Licensed Package Assembler for sale under Licensee’s indicia. Licensee may, at its option, exercise this “have made” right with such Licensed Package Assembler
| Tessera Confidential |
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and pay royalties due hereunder for the assembly of Type 1 and Type 2 F-µBGA Packages by such Licensed Package Assembler directly to Tessera instead of having such Licensed Package Assembler pay the royalties to Tessera. When Licensee exercises this right to pay royalties directly to Tessera, it shall provide written notice to such Licensed Package Assembler and to Tessera. Notwithstanding the foregoing, Licensee may exercise this “have made” right (1) [*], (2) with an assembler not included in the Licensed Package Assemblers for one (1) year after the date Licensee provides Tessera with notification of its intent to use such unlicensed assembler, during which time Tessera will make good faith business efforts to license to such assembler to assemble TCC packages, and (3) with an assembler that becomes excluded from the definition of Licensed Package Assemblers, for a grace period of one (1) year after such exclusion is effective.
F-µBGA Package Royalty
For its exercise of the rights granted herein after June 30, 2002, Licensee shall pay running royalties of [*] (US$ [*]) per Billable Pin for Type 1 or Type 2 F-µBGA Packages sold by or for Licensee, provided [*].
In its exercise of the rights granted herein for the Type 1 or Type 2 F-µBGA Packages sold by or for Licensee up to and through June 30, 2002, Licensee shall pay the following amounts within sixty (60) days of the last signing date of this letter:
1. for Type 1 F-µBGA Packages, Licensee shall pay royalties of [*] (US$[*]) per Billable Pin for F-µBGA Packages, provided that [*]. Licensee shall further include a written report supporting this amount including the number of Type 1 F-µBGA Packages sold by or for Licensee, the contract assembler of such Type 1 F-µBGA Packages (if applicable), and the number of Billable Pins per such Type 1 F-µBGA Package; and
2. for Type 2 F-µBGA Packages, Licensee shall pay royalties equaling the lesser of [*]. Licensee shall further include a written report supporting this amount including the number of Type 2 F-µBGA Packages sold by or for Licensee, the contract assembler of such Type 2 F-µBGA Packages (if applicable), and the number of Billable Pins per such Type 2 F-µBGA Package.
[*]
Release for Prior F-µBGA Package Assembly
Solely with regard to the Type 1 and Type 2 F-µBGA Packages sold by or for Licensee (“Licensee” in this paragraph includes its sublicensees if applicable) up to and through June 30, 2002 and reported and paid for as provided above, Xxxxxxx agrees not to make any claims against either (i) Licensee for its manufacture, use, sale, or offer for sale of such F-µBGA Packages, (ii) any other party for its manufacture or sale of such F-µBGA Packages for Licensee’s use, sale, or offer for sale, or (iii) any Licensee customer for its use, sale, offer for sale or incorporation into products of such F-µBGA Packages purchased from Licensee.
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Royalty Reports and Payment
Beginning July 1, 2002, royalties for Type 1 and Type 2 F-µBGA Packages hereunder and TCC packages granted in under the TCC License shall be calculated and paid in full in quarter annual payment periods ending March 31, June 30, September 30 and December 31 of each year, provided that calculation and payment for the periods ending June 30 and December 31 may be based on good faith estimation by Licensee and that any underpayment or overpayment will be adjusted at the next payment. Beginning with the first such royalty payment, Licensee shall deliver the following written reports for each payment period:
| • | Attachment A: Royalty Report for Type 1 and Type 2 F-µBGA Packages Sold by or for Licensee, |
| • | Attachment B: Purchase Report for Type 1 and Type 2 F-µBGA Packages Purchased by Licensee, |
| • | Attachment C: Purchase Report for Type 1 and Type 2 F-µBGA Packages Made for Licensee by a Licensed Package Assembler Under Licensee’s Have Made Rights, and |
| • | Attachment D: Royalty Report for Type 1 and Type 2 F-µBGA Packages sold by a Licensee Affiliate who is a contract package assembler. |
No royalties will be due from Licensee for Type 1 and Type 2 F-µBGA Packages reported under Attachment B. Payment of royalties for Type 1 and Type 2 F-µBGA Packages reported under Attachments C and D will not be due until such Packages are sold by or for Licensee or a License Affiliate, respectively. All payments under this Paragraph shall be made in US Dollars by wire transfer to Union Bank of California, 00 Xxxxxxx Xxxx., Xxx Xxxx, XX 00000, Account Name: Tessera, Account No.: 6450148359, Routing No. 000000000, International Swift Code: XXXXXX00XXX, or such other bank or account as Tessera may from time to time designate in writing. The payments of royalties and submission of such reports from Licensee to Tessera under this Paragraph shall be made within sixty (60) days from the end of each quarter annual payment period and shall be considered to be made as of the day on which such payments are received in Tessera’s designated bank account.
Extension of F-µBGA License
[*]
Notice
The Notice section of the TCC License, Paragraph XVI.C, is amended by changing the contact information for Licensee to read as follows:
| Licensee: | Hitachi, Ltd. |
| Nippon Building, 6-2 Otemachi 2-chome, |
| Chiyoda-ku, Tokyo 100-0004 Japan |
| Facsimile: x00-0-0000-0000 |
| Attn: Department Manager, |
Business Development Department,
Semiconductor & Integrated Circuits
| Tessera Confidential |
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Duration
This Letter Amendment shall become effective on July 1, 2002 after it has been signed by both parties. Solely with respect to the F-µ BGA Packages, unless earlier terminated as provided for in the TCC License, this Letter Amendment (including [*]) shall remain in full force until [*], and this provision is intended to supersede Paragraphs X.A and X.B of the TCC License for purposes of this Letter Amendment.
Representation
Xxxxxxx represents and warrants that the F-µ BGA licenses granted herein shall, notwithstanding the foregoing, include a license under USP 5,679,977 and USP 5,852,326 and under any reexaminations, reissues, or foreign counterparts of either of these patents and under any patents issuing from divisional, continuation, request for continuation examination applications or continuation in part applications citing, for purpose of priority, either of these patents, or any patents or patent applications cited by either of these patents for purpose of priority.
In the event any of the provisions of the TCC License and this Letter Amendment conflict, the provisions contained in this Letter Amendment shall supersede the conflicting provisions of the TCC License.
Except as modified by this Letter Amendment, the remaining terms and conditions of the TCC License are unchanged and apply with equal force and effect.
If the terms of this Letter Amendment are acceptable, please sign below and return one executed copy to us, retaining the second copy for your files.
| TESSERA, INC. | HITACHI, LTD. | |||||||
| By: | [ILLEGIBLE] |
By: | [ILLEGIBLE] | |||||
| Title: | SVP, LICENSING BUSINESS |
Title: | DEPT. MANAGER BUSINESS DEVELOPMENT SIC | |||||
| Date: | SEPT 26, 2002 |
Date: | 9/26/02 | |||||
| Tessera Confidential |
4 | |||
Attachment A
F-µBGA ROYALTY REPORT UNDER TCC MASTER LICENSE AGREEMENT:
F-µBGA PACKAGES SOLD BY OR FOR LICENSEE
Reporting Period: From through
| TYPE OF IC DEVICE |
NUMBER OF F-µBGA PACKAGES |
NUMBER OF BILLABLE PINS |
ROYALTY RATE |
ROYALTY (US$) | ||||
TOTAL ROYALTY: US$
| LESS TAX: | US$ | |
| ACTUAL REMITTANCE: | US$ | |
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Attachment B
F-µBGA PACKAGE PURCHASE REPORT UNDER TCC MASTER LICENSE AGREEMENT:
F-µBGA PACKAGES PURCHASED BY LICENSEE
Reporting Period: From through
| LICENSED PACKAGE |
TYPE OF IC DEVICE |
NUMBER OF F-µBGA PACKAGES |
NUMBER OF BILLABLE PINS | |||
| Tessera Confidential |
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Attachment C
F-µBGA PACKAGE PURCHASE REPORT UNDER TCC MASTER LICENSE AGREEMENT:
F-µBGA PACKAGES MADE FOR LICENSEE UNDER LICENSEE’S HAVE MADE RIGHTS
Reporting Period: From through
| LICENSED PACKAGE ASSEMBLER |
TYPE OF IC DEVICE |
NUMBER OF F-µBGA PACKAGES |
NUMBER OF BILLABLE PINS | |||
| Tessera Confidential |
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Attachment D
F-µBGA PACKAGE ROYALTY REPORT UNDER TCC MASTER LICENSE AGREEMENT:
F-µBGA PACKAGES SOLD BY (A LICENSEE AFFILIATE)
Reporting Period: From through
| TYPE OF IC DEVICE |
NUMBER OF F- µBGA PACKAGES |
NUMBER OF BILLABLE PINS |
ROYALTY RATE |
ROYALTY (US$) | ||||
| Tessera Confidential |
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