Post-Termination Of License Royalties Were Part Of $128.3M Arbitration Award.
Appellant Amkor stumbled on a procedural hurdle: Its petition to correct the award was untimely. A petition to correct an award must be served and filed not later than 100 days after the date of the service of a signed copy. Cal. Code Civ. Proc., section 1288. Amkor’s problem was that it appealed 236 days after “Partial Award No. 3” – the award that it was attacking. Amkor argued a new 100-day period ran when the arbitration panel issued an addendum to the “partial award.” Amkor’s petition, however, did not seek to correct the addendum, which addendum was not even attached to the petition. The critical issue, concerning damages, had been decided in the earlier Partial Award No. 3, and subsequent briefing and the addendum merely confirmed the award.
COMMENT: When in doubt, appeal an original “partial award”, and a later award. Better safe than sorry. And “superfluity does not vitiate.” (Maxim of Equity).
Amkor argued the arbitration panel exceeded its powers by awarding royalties for the continued use of a patent after Tessera terminated the license agreement with its licensee Amkor. (There was no question Tessera could recover royalties for the period after Amkor breached and before Tessera terminated the license). Amkor further argued another lawsuit for patent infringement would be necessary to recover damages after the license agreement terminated, because once Tessera elected to terminate the license agreement upon Amkor’s breach, the obligation to pay future royalties ceased.
Relying on broad language in the arbitration clause, and the equitable powers of the arbitrator, the Court of Appeal concluded the license agreement contemplated the licensee would not continue to use the patented technology after the license expired and the arbitrator did have the authority to award royalties for the “improper use of patented technology.” Thus, the remedy was authorized by California law, and if there was an error of law, it was not a basis for holding the arbitration panel exceeded its authority.
COMMENT: At the end of the opinion, the Court states: “The court did not select a remedy not authorized by California law. Whether the court made an error of law in awarding royalties in this particular case is precisely the type of analysis prohibited under section 1286.6.” (italics added). Query whether the Court of Appeal meant to refer to the “arbitrator” rather than to the “court”? Arbitrators do not exceed their powers, “merely by erroneously deciding a contested issue of law or fact.” Advanced Micro Devices, Inc. v. Intel Corp., 9 Cal.4th 362, 366 (1994).