What happened

Shares of Xperi Corporation (NASDAQ:XPER) were up 10.7% as of 12 p.m. EDT Monday after the semiconductor and IP licensing specialist announced encouraging news in an outstanding patent infringement complaint against Broadcom (NASDAQ:AVGO). Broadcom stock simultaneously declined a modest 1.4% following the news.

So what

According to a press release late Friday, Xperi subsidiary Tessera received a "favorable notice of initial determination" (ID) from U.S. International Trade Commission (ITC) Administrative Law Judge Sandra Dee Lord in the ongoing investigation. More specifically, Judge Lord found that Broadcom and its customers named in the complaint violated Section 337 of the Tariff Act as they infringed one of Tessera's U.S. patents (U.S. Patent  No. 6,849,946). She also found that while another patent (No. 6,133,136) was "infringed and valid," there was "no violation due to lack of domestic industry." Finally, no violation was found with a third patent (No. 6,856,007) in the complaint.

A judge holding a gavel.

Image source: Getty Images.

Now what

As it stands, Tessera cautioned that the notice is "only a brief summary of the ID's conclusions," and is still subject to review by ITC commissioners. What's more, any financial rewards will not be issued until the investigation's scheduled completion at the end of October 2017. And you can also be sure Broadcom will do everything in its power to contest any unfavorable ruling. But for now, it's no surprise to see shares of Xperi rebounding from near their 52-week low.

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