Texas Instruments v. Tessera, Inc.

Texas Instruments, Inc. (TI) (plaintiff) licensed certain semiconductor-chip technology from Tessera, Inc. (defendant). Both TI and Tessera were sophisticated businesses with extensive experience in patent licensing. The parties’ licensing agreement included a governing-law and venue provision, which stated that the agreement would be governed and construed in accordance with California law and that any litigation between the parties relating to the agreement must be brought in California. A dispute arose as to whether TI owed Tessera royalties on certain products that TI imported. TI filed an action for declaratory judgment of invalidity and noninfringement in federal district court in California. Shortly thereafter, Tessera filed a complaint with the International Trade Commission (commission) against TI and several other electronics companies under the Tariff Act. Tessera alleged that TI’s importation of the products in dispute infringed Tessera’s patents. TI then moved for preliminary injunctive relief in the federal court proceeding. Based on the licensing agreement’s venue clause, TI sought to enjoin Tessera from pursuing its claims against TI with the commission because that tribunal was located in Washington, D.C., not California. The commission then opened an investigation, based on Tessera’s complaint, naming TI and the other companies as respondents. The district court denied TI’s request for a preliminary injunction, and TI appealed.