Tech Industry

Altera falls on patent ruling

Altera Corp. (Nasdaq: ALTR) slipped 11 percent before the market opened Monday after losing a lawsuit to Xilinx Inc. (Nasdaq: XLNX).

Shares were down 3.36 to 27.01 on Island ECN. The company hit estimates in its third quarter and said it saw good growth ahead.

Altera plans to appeal the decision in the ruling, which is the result of a suit filed by Xilinx in June, 1993. Altera issued a statement Monday saying it believes the verdict from a US District Court for the Northern District of California -- ruling that Altera's FLEX 8000 products infringed two patents -- is in error

The jury verdict found that the company's FLEX 8000 Programmable Logic Device family infringed Xilinx's Freeman and Carter patents. In other rulings, the court found a number of claims in the Freeman patent to be invalid and that the main claim of the Carter patent is also invalid. Altera expected to get about $30 million, or about 2 percent of the company's total revenue for the current year from sales of its FLEX 8000 products.

Altera said it believes both the Freeman and the Carter patent should have been invalidated, and said Xilinx confused the jury by focusing on unpatented features common to both companies' products.

Statistically, since 1995, the U.S. Court of Appeals has overturned about half of patent infringement cases, Altera said. The company added that the appeal process could take as long as two years.


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