1261694--3/16/2006--TESSERA_TECHNOLOGIES

related topics

{property, intellectual, protect}

{product, market, service}

{customer, product, revenue}

{regulation, change, law}

{operation, natural, condition}

{personnel, key, retain}

{acquisition, growth, future}

{system, service, information}

{product, candidate, development}

{product, liability, claim}

{interest, director, officer}

{regulation, government, change}

{control, financial, internal}

{stock, price, operating}

{operation, international, foreign}

{cost, regulation, environmental}

{condition, economic, financial}

A court invalidation or limitation of our key patents could significantly harm our business. We are currently in litigation involving some of our key patents. We have become and may in the future be involved in litigation with our licensees, potential licensees or strategic partners, which could harm our business. If we fail to protect and enforce our intellectual property rights, our business will suffer. We may not be able to protect our confidential information, and this could adversely affect our business. We may be required to continue to undertake costly legal proceedings to enforce or protect our intellectual property rights and this may harm our business. Our revenues may suffer if we cannot continue to license or enforce our intellectual property rights or if third parties assert that we violate their intellectual property rights. If Congress changes the patent laws, we could be adversely impacted A significant amount of our royalty revenues comes from a few market segments and products, and our business could be harmed if these market segments or products decline. Our revenue is concentrated in a few customers and if we lose any of these customers our revenues may decrease substantially. Future changes in financial accounting standards or practices or existing taxation rules or practices may cause adverse unexpected revenue and expense fluctuations and affect our reported results of operations. We are subject to laws and regulations governing government contracts, and failure to address these laws and regulations or comply with government contracts could harm our business by leading to a reduction in revenue associated with these customers. Our financial and operating results may vary which may cause the price of our common stock to decline. Network outages could disrupt our internal operations, which could adversely affect our revenues, customers and stock price. We recently conducted our yearly evaluation of our internal controls systems in order to allow management to report on, and our independent registered public accounting firm to attest to, our internal controls, as required by Section 404 of the Sarbanes-Oxley Act of 2002, but we cannot ensure that these practices will satisfy future audits. We have a royalty-based business model, which is inherently risky. It is difficult for us to verify royalty amounts owed to us under our licensing agreements, and this may cause us to lose revenues. Failure by our licensees to introduce products using our technology could limit our royalty revenues growth. Failure by the semiconductor industry to adopt new high performance DRAM chips that utilize our packaging technology would significantly harm our business. Failure by the semiconductor industry to adopt broadly WLP packaging technology could limit our royalty revenue growth. Competing technologies may harm our business. If we do not create and implement new designs to expand our licensable technology portfolio, our competitive position could be harmed and our operating results adversely affected. Some of our license agreements have fixed terms and, in order to maintain our relationships with licensees under such agreements, we will need to renegotiate some of our existing license agreements in the future. Our licensing cycle is lengthy and costly and our marketing and sales efforts may be unsuccessful. Cyclicality in the semiconductor industry may affect our revenues, and as a result, our operating results could be adversely affected. The international nature of our business exposes us to financial and regulatory risks and we may have difficulty protecting our intellectual property in some foreign countries. Our services business may subject us to specific costs and risks that we may fail to manage adequately which could harm our business. If our prototypes, manufactured packages or products based on our designs are used in defective products, we may be subject to product liability or other claims. We intend to expand our operations which may strain our resources and increase our operating expenses. We have made and may continue to make acquisitions which could divert management s attention, cause ownership dilution to our stockholders, be difficult to integrate and adversely affect our financial results. There are numerous risks with our recent acquisition of certain assets from Shellcase, Ltd. If we lose any of our key personnel or are unable to attract, train and retain qualified personnel, we may not be able to execute our business strategy effectively. Decreased effectiveness of share-based compensation could adversely affect our ability to attract and retain employees. Failure to comply with environmental regulations could harm our business. Our operations are primarily located in California and, as a result, are subject to catastrophes. We have a research and development facility in Jerusalem, Israel that subjects us to risks that may negatively affect our results of operations and financial condition. Compliance with changing regulation of corporate governance and public disclosure may result in additional expenses.

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1261694--3/16/2006--TESSERA_TECHNOLOGIES_INC