1 Filed 11/25/14 Amkor Technology v. Tessera CA1/3 NOT TO BE PUBLISHED IN OFFICIAL REPORTS

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION THREE

AMKOR TECHNOLOGY, INC., Petitioner and Appellant,

v. TESSERA, INC., Respondent. A139596
(City & County of San Francisco Super. Ct. No. CPF-13-512796)

Petitioner Amkor Technology, Inc. (Am kor) appeals from an order denying its petition to correct an arbitration award that it contends exceeds the ar bitrators’ authority. We conclude that the trial court correctly he ld that the petition was untimely and, in all events, lacks merit. Factual and Procedural History On May 9, 1996, Tessera, Inc. (Tessera ) and Amkor entered a license agreement with respect to certain patent s held by Tessera. In 2006, Tessera initiated arbitration proceedings alleging that Amkor owed Tesse ra royalties under the license agreement. The arbitration ended in early 2009 with th e arbitrators awarding royalties to Tessera through December 1, 2008. In August 2009, Amkor requested a sec ond arbitration before the same panel of three arbitrators, seeking a declaration that “it is fully in complia nce with the license agreement for the period after December 1, 2008.” In response, Tessera filed a counterclaim seeking additional royalties fro m Amkor, as well as, a determination that2 the license agreement was term inated. This second arbitration is the subject of the present appeal. Following hearings in De cember 2010 and August 2011 , the panel issued “Partial Award No. 3.” The panel found th at “Tessera effectively exercised its express contractual rights to terminate the contract as of Febr uary 17, 2011,” and aw arded Tessera royalties based on Amkor’s pretermination use of the pa tents. The panel’s termination finding and pretermination royalty award are not at issue on appeal. The panel also awarded po sttermination royalties base d on Amkor’s continued use of the patents after the date of termination. Paragraph 314 of th e award provides, “We
also find that because Amkor has continue d to manufacture products covered by the license, Tessera is entitled to royalties, at th e original royalty rate from 17 February 2011, through the date of this tribunal’s judgment . Further, in light of the facts that all unresolved disputes ‘arising u nder’ the agreement must be arbitrated, the tribunal has continuing jurisdiction for such a finding.” The panel cited Naimie v. Cytozyme Research
Co. (10th Cir. 1999) 174 F. 3d 1104 in support of its award of posttermination royalties.
Partial Award No. 3 was served on the parties on July 6, 2012. On August 8, 2012, Amkor requested “clarification” of the award of posttermination royalties under paragr aph 314. Specifically, Amkor sought “clarification as to the basis for the tribunal’s award of pos ttermination, extra-contractual continuing royalties under the terms of reference.” In su pport of the request, Amkor argued that the award conflicted with the plain language of the license agreement, that the panel’s
reliance on Naimie was misplaced, and that Tessera could recover posttermination damages only in a separate patent infringement action. On November 27, 2012, th e panel issued an “Addendu m to Partial Award No. 3,” reconfirming the award. The addendum provid es that “Partial Award No. 3” should be interpreted in light of the fo llowing considerations: “In its 8 August 2012 submission to the ICC [International Chamber of Co mmerce], Amkor further argues that Naimie v. Cytozyme Research Co. , 174 F.3d 1104 (10th Cir. 1999) is distinguishable from the present case, and that Tessera did not cite Naimie until its final reply brief; thus, Amkor3 claims that it never had the opportunity to re spond to Tessera’s argu ment in that regard. . . . Tessera responds that Amkor mischaracterizes the holding of Naimie and that its challenge to that citation is untimely. Amkor has now had full opport unity to respond to
Naimie , and the tribunal rejects its attemp ts to distinguish that case.” On March 7, 2013, Amkor filed its “Pe tition to Correct An Ar bitration Award” in San Francisco Superior Court. Following a hearing on June 14, 2013, the court denied Amkor’s petition. The court found both that the petition was untimely under Code of
Civil Procedure 1 section 1288 and that the arbitrators di d not exceed their powers so as to justify correction of the award under sec tion 1286.6. Amkor filed a timely notice of appeal.
Discussion

1. The petition to correct is untimely.

The trial court concluded that Amkor’s petition was time barred under section 1288 which provides that “[a] petition to . . . correct an award shall be served and filed not later than 100 days after the date of the service of a signed copy of the award on the petitioner.” The court explained, “The po rtion of the arbitra tion for which Amkor seeks correction (i.e., paragraph 314 of the July 2012 award) existed as of July 2012; and
existed in a format that was cl ear and not tentative. That is, it was ripe for review as of July 2012. [¶] . . . [¶] The clock under [secti on 1288] started ticking at the point when the moving party was served with the award, and not later when and if the arbitral panel responded to the request for interpretation. Th erefore, in this inst ance, the July 2012 award was ripe for review in July 2012. Because Amkor waited 236 days after being served with the July 2012 award, its petition to correct an arbitral award on February 27, 2013, was untimely and the statute of limitations had run.” On appeal, Amkor argues that a ne w 100-day period bega n running when the panel issued its addendum to the partial awar d. It argues that the trial court improperly “rejected Amkor’s challenge as untimely becau se it believed that only Partial Award

1 All statutory references are to the Code of Civil Procedure unless otherwise noted.4 No. 3 and not the panel’s subs equent addendum, can properly constitute ‘the award’ for purposes of section 1288’s lim itation period.” Amkor’s petition, however, did not seek to
correct the November addend um. The petition sought “an order and judgment . . . correcting the tribunal’s partial award, dated July 5, 2012, by striking paragraph 314 from the partial award.” The addendum is not even attached to the petition. Rather it is one of
numerous exhibits to a declaration submitted in support of the petition. Moreover, the suggestion that the addendum is a separate partial judgment subject to petition for correction under section 1288 la cks merit. Amkor argu es, “Under the rules of the relevant arbitral forum, the ICC, the panel’s response in the form of the addendum unquestionably is a formal partial arbitration award. The addendum itself resolved issues not considered by the panel in the prior Partial Award No . 3, specifically Amkor’s posttermination and Naimie arguments, which had not even been presented to the panel at the
time of issuance of Partial Awa rd No. 3.” We disagree. Article 29 of the ICC rules provides in relevant part as follows: “1. On its own initiative, the arbitral tribun al may correct a clerical, co mputational or typographical error, or any errors of similar nature containe d in an award, provided such correction is submitted for approval to the court within 30 days of the date of such award. [¶] . . . [¶] 3.
A decision to correct or to in terpret the award shall take th e form of an addendum and shall constitute part of the award.” Article 29 does not expressly or implicitly toll the time for filing a petition for correcti on under section 1288. An or der correcting a “a clerical, computational or typographical error or any erro rs of similar nature” is, as the rule states, an addendum to an existing award and “cons titute[s] part of the award.” It is not a separate award.
The addendum in this case is consistent with article 29. Contrary to Amkor’s argument, the panel did not consider any ne w issues in the addendum. The question of the panel’s jurisdiction to award post-ter mination royalties and the applicability of
Naimie were squarely before the panel at the time “Partial Award No. 3” was issued. Although the panel may not have had the benefit of Amkor’s interpretation of Naimie before it at that time, the court clearly relied on Naimie and the issue was decided. The5 panel’s addendum merely confirms the aw ard, having fully considered Amkor’s arguments. Amkor also asserts for the first time on ap peal that its petiti on is timely because,
under Hightower v. Superior Court (2001) 86 Cal.App.4th 1 415, 1440-1441, it is allowed
to move for correction as late as 100 days after the panel’s final award is issued. Amkor argues that an “aggrieved party” is not requ ired to challenge a partial final award and retains the right to move for correction within 100 days after entry of the “ultimate final award.” Amkor, however, has not moved to corre ct the final award. As Amkor notes, at
the time it filed its motion to correct, a third phase of the arbitration was still pending.
Section 1288 cannot be understood to allow the filing of a petition to correct a partial final award at anytime that the arbitration proceedings remain pending to consider other outstanding issues. Accordingly, we agree w ith the trial court that Amkor’s petition is untimely.

2. The panel did not exceed its authority in issuing Partial Award No. 3.
Under section 1286.6, subd ivision (b), the court may correct an arbitration award if “[t]he arbitrators exceeded their powe rs but the award may be corrected without affecting the merits of the decision upon th e controversy submitted.” “For example, an award may be vacated when an arbitrator exceeds his or her powers ‘by acting without subject matter jurisdiction, deciding an i ssue that was not submitted to arbitration, arbitrarily remaking the contract, upholding an illegal contract, issuing an award that violates a well-defined public policy or a stat utory right, fashioning a remedy that is not rationally related to the contract, or sele cting a remedy not authorized by law.’ ” ( Kelly
Sutherlin McLeod Architect ure, Inc. v. Schneickert (2011) 194 Cal.Ap p.4th 519, 531, citing Jordan v. Department of Motor Vehicles (2002) 100 Cal.App.4th 431, 443 ( Jordan ).) Arbitrators do not exceed their powe rs, however, “merely by erroneously deciding a contested issue of law or fact.” ( Advanced Micro Devices, Inc. v. Intel Corp

. (1994) 9 Cal.4th 362, 366 ( AMD ); Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 28.)6 Amkor contends that the panel exc eeded its powers by (1) acting without jurisdiction and deciding an issu e that was not submitted to arbitration and (2) awarding a remedy (post-termination royalties) that is prohibited by the Li cense Agreement and contrary to California law. In determining wh ether an arbitrator exceeded his powers, we review the trial court’s decision de novo, but we must give substantial deference to the
arbitrators assessment of their contractual authority and their selection of a remedy. ( AMD, supra, 9 Cal.4th at pp. 374-375, 376, fn. 9; Jordan, supra, 100 Cal.App.4th at pp. 443-444.) An arbitrator’s powers “derive from, and are limited by, the agreement to arbitrate.” ( Jordan
, supra , 100 Cal.App.4th at p. 444.) Th e arbitrator’s powers also may be expanded or restricted by the scope of the issues submitted to arbitration. ( Greenspan v. LADT, LLC (2010) 185 Cal.App.4th 1413, 1437 –1438.) ‘ “ ‘ “Arbitration submissions are usually construed as broadly as possible in order that differences between the parties may be resolved quickly and economically. Under the [principle] of broad construction
an arbitrator is authorized to determine all questions which he needs to determine in order to resolve the controversy submitted to him, and the arbitrator himself decides which questions need to be determined.” . . .’ . . . ‘I f participants in the arbitral process begin to assert all possible legal or procedural defenses in court proceedings before the arbitration itself can go forward, the ar bitral wheels would very so on grind to a halt.’ ” ’ ” ( Id. at pp. 1437-1438.) In this case, the arbitration provision in the License Agreement requires arbitration of “any disputes, controversies, claims or differences whic h may arise from, under, out of or in connection with this Agreement.” Th e panel, recognizing that the phrase “ ‘in
connection with’ has been in terpreted broadly to encompass all disputes having a significant relationship to the contract,” c oncluded that it had jurisdiction to award Tessera royalties based on Amkor’s continued manufacture of products covered by the license after termination of the agreement. Am kor argues that despite the breadth of the arbitration provision, the “Terms of Refere nce” to which the partie s agreed limited the
issues submitted to arbitration.7 Section 6.1 of the terms of reference provi des, “Subject to any new claims (article 19, ICC rules), the arbitral tribunal may have to consider in particular the following issues (but not necessarily all of them or any of them and not in the following order): [¶] (a) Is claimant [Amkor] in compliance w ith the license agreement and a licensee in good standing? [¶] (b) Has respondent [Te ssera] interfered with claimants contractual relations with third parties?[¶] (c) If the ag reement was materially breached by either party, what monetary damages, if any should be awarded? [¶] Does respondent have the right to terminate the license agreement? [¶] (e) Has claimant infringed any of respondent’s patents that are at issue in th is case? [¶] (f) If so, are those patents valid? [¶] (g) Is either party entitled to any equitable relief? [¶] (h) Has claimant interfered with respondent’s prospective economic re lationships with third parties?” Amkor argues that “[t]he only determ ination of damages before the panel was Tessera’s counterclaim for damages under the terms of the license ag reement. No patent infringement claims under 35 U.S.C. § 271 et seq. were presented to the panel.” However, subdivision (c) of se ction 6.1 authorizes the pane l to determine appropriate damages if it finds that a party materially br eached the license agr eement, as it found Amkor to have done when it continued making use of Tessera’s patents after termination of the license agreement. Moreover, subdivision (g) authorizes the arbitrators to consider whether either party is entitled to equitabl e relief. “ ‘Equitable relief is by its nature flexible, and the maxim allowing a remedy fo r every wrong (Civ.Code, § 3523) has been invoked to justify the invention of new me thods of relief for new types of wrongs.’ ” ( Kelly Sutherlin McLeod Architecture, Inc. v. Schneickert, supra, 194 Cal.App.4th at p. 531 [“In light of the inherently flexible na ture of equitable remedies, the principle of arbitral finality which forbids judicial inquiry into the legal correctne ss of the arbitrator's decisions on submitted issues, a nd the related principle that re medies available to a court are only the minimum available to an arbitrator (unless restricted by agreement) . . . we
conclude that the order did not exceed the arbitrator's powers simply because the same relief is not or might not be available in a ju dicial action.”].) Given the scope of the terms of reference as well as of the arbitration provi sion itself, especially in light of the general8 principle that an arbitrator is authorized to determine all questions necessary to resolve the controversy submitted to arbitration ( Greenspan v. LADT, LLC , supra , 185 Cal.App.4th at p. 1438), Amkor’s contention that the determination of posttermination royalties was beyond the scope of the pane l’s jurisdiction cannot be sustained. Amkor argues next that even if the panel had jurisdiction to deci de this issue, the panel exceeded its powers by making an award th at is expressly forbidden by the license agreement. Amkor relies on section X.H of the license agreement which provides in relevant part, “Any termination of this agreem ent pursuant to this paragraph X . . . shall
be deemed a termination of the agreement in a ccordance with its terms (including termination of any paym ents of royalties to Tessera and a ny rights of licensee to use any technology or Tessera pa tent licensed hereunder).” 2 Contrary to Amkor’s characterization, th ese provisions do not expressly forbid the panel from awarding posttermination royalties. Section X.H clearly contemplates that upon termination of the agr eement Amkor will cease making use of Tessera’s patents and
therefore that Tessera will be entitled to no fu rther royalties. The section does not specify
what remedies will be available if Amkor wrongfully continues to make use of the patents after termination. “Arbitrators are not obliged to read cont racts literally, and an award may not be vacated merely because the court is unable to find the relief granted was authorized by a specific term of th e contract. [Citation.] The remedy awarded, however, must bear some rational relations hip to the contract and the breach. The required link may be to the contractual terms as actually interpreted by the arbitrator (if the arbitrator has made that interpretation known), to an interpre tation implied in the award itself, or to a plausible theory of th e contract's general subject matter, framework or intent. [Citation.] The award must be rela ted in a rational manner to the breach (as expressly or impliedly found by the arb itrator). Where the damage is difficult to

2 Amkor also relies on section X.I.1 of the lic ense agreement which provides in relevant part that “licensee’s obligati on to make payment to Tessera accrued under this agreement on or prior to expiration or termination” “s hall survive the termination or expiration of this agreement.”9 determine or measure, the arbitrator enjoys correspondingly broader discretion to fashion a remedy.” ( AMD , supra , 9 Cal.4th at p. 381, fn. omitted .) As noted by the trial court, the panel’s reasons “for granting a remedy thr ough the date of judgment bore a rational relationship to the contract and the effect s of Amkor’s conduct under the contract.” 3 Finally, Amkor argues that the panel ex ceeded its authority by awarding a remedy that is not authorized by Califor nia law. Amkor relies on language in Jordan, supra, 100 Cal.App.4th at page 443 that a panel exceeds its authority when it “selects a remedy not authorized by law.” However, the facts in Jordan bear no similarity to those in the present case, and the cases cited in Jordan in support of the broad proposition that arbitrators may not “select[] a remedy no t authorized by law” demonstrate the inapplicability of this broad statement. First, Jordan cited Marsch v. Williams (1994) 23 Cal.App.4th 238, in which the
court held that the arbitrator s exceeded their author ity by appointing a receiver. The court
in Marsch v. Williams emphasized “the importance of the trial court’s role in supervising
a receiver cannot be understated. ‘The receiver is but the hand of the court, to aid it in preserving and managing the property involved in the suit for the benefit of those to whom it may ultimately be determ ined to belong.’ [Citations.] ‘[A ] receiver is an agent of the court, not of the parties, and the receive rship estate consisting of property which is properly in his hands is under the control and continuous superv ision of the court.’ [Citation.] Given the continuing nature of a re ceiver’s duties and the court’s supervision, any addition to the type of tribunals empower ed to appoint and supervise receivers would represent a fairly profound chan ge in our receivership law.” ( Id . at p. 248.) The court concluded that “the power to appoint recei vers is unique and cannot be extended to arbitrators in the absence of legislative action” even where the partie s have agreed to the appointment of one. ( Id. at pp. 246, 248.)

3 For this reason, we similarly reject Am kor’s argument that the panel exceeded its powers by rewriting the terms of the license agreement.10 Jordan also cited Luster v. Collins (1993) 15 Cal.App.4th 1338, 1349, in which
the court held that the arbitrator exceeded its authority by imposi ng economic sanctions
to enforce the award. The court reasoned that there was no statutory authority for
arbitrators to enforce an award because secti ons 1285 and 1287.4 au thorize a party to an arbitration “to petition the court to confirm an award which, if confirmed, results in the entry of judgment” and that “[o]nce entered the judgment ‘has the same force and effect as, and is subject to all the provisions of la w relating to, a judgment in a civil action; . . . and it may be enforced like any other judgment of the court in which it is entered.’ ” ( Id

. at pp. 1348-1348.) The court explained, “The means through which a judgment may lawfully be enforced is a di screte subject involving many considerations. In enacting enforcement mechanisms, the Legislature mu st balance the due process rights of the judgment debtor against the right of the judgme nt creditor to receive the benefits of the judgment, resolving these conf licting positions so that the p ublic's confidence and respect for the judicial system will be enhanced. [¶] . . . [¶] In lig ht of . . . the Legislature’s prodigious efforts in enacting a comprehensiv e statute dealing with the various methods to enforce judgments, the Legi slature had no need to furn ish an arbitrator additional authority for enforcement purposes postjudgme nt. Such authority wo uld not only conflict with judicial power, but absent carefully pres cribed procedures pote ntially interfere with the respective rights of the parties.” ( Id. at p. 1349.)
These cases make clear that an arbitrat or exceeds its author ity not when it makes an error of law in selecting a remedy under a particular legal theory, but when it selects a remedy that it does not have authority to im pose under any circumst ances. Here, Amkor’s argument is simply that the ar bitrators’ remedy is inconsiste nt with California contract
law. Amkor relies on Susteen, Inc. v. Sourcenext Corp. (9th Cir. 2008) 266 Fed.Appx. 690, 691, in which the court ob served that “[u]nder California law . . . if a licensor elects to terminate a license agreemen t upon the licensee's breach, the obligation to pay future royalties ceases as well.” It argues, “Havin g chosen to terminate the agreement, as a matter of California law, Te ssera gave up any entitlement to receive further royalties under that agreement.” There is no dispute, however, that an arbitr ator has the authority11 to award royalties for the improper use of pate nted technology. The c ourt did not select a remedy not authorized by California law. Whet her the court made an error of law in awarding royalties in this particular case is pr ecisely the type of an alysis prohibited under section 1286.6. ( AMD, supra, 9 Cal.4th at p. 366; Moncharsh v. Heily & Blasé, supra, 3 Cal.4that p. 28.) In short, the panel did not exceed its authority in issuing “Partial Award No. 3.” 4 Disposition The order denying Am kor’s petition is affirmed. Tesse ra shall recover its costs on appeal.

_ ____________ ____________ Pollak, Acting P. J.

We concur:

_____________ ____________ Siggins, J.

_____________ ____________ Jenkins, J.

4 Because we need not address Tessera’s judicial estoppel and waiver arguments, Amkor’s requests for judicial notice filed Janua ry 23 and June 12, 2014 in support of its opposition to those arguments are denied. The exhibits to Amkor’s requests shall remain sealed.