The CEO of San Jose's Tessera Technologies, facing a proxy battle this week for control of the board, is pleading with shareholders not to let a New York hedge fund "turn the company into a patent troll."

In a column published at Forbes.com, Richard Hill claims the fund, Starboard Value, wants the company to slash its R&D budget and spend more money filing patent infringement claims. Hill called it a shortsighted strategy akin to "cutting down the apple tree to harvest the apples."

Bryan Kohm, an intellectual property attorney with Fenwick & West in San Francisco, said an increasing number of Silicon Valley companies are at risk for such shareholder actions.

"For decades, you've had situations where investors come in and realize the assets of the company are worth more than the company as a going concern," he said. "What we're seeing now is the realization that a patent portfolio can be one of those assets. Companies that seem to have a difficult road ahead of them are very susceptible."

Starboard officials declined this newspaper's request for comment, saying it would be inappropriate before Thursday's proxy vote.

But in open letters to Tessera shareholders, Starboard managing member Peter Feld said Hill and Tessera's board were guilty of "false claims" and "manipulative tactics" in a desperate attempt to retain control of the company, which has seen revenues and profits dwindle in recent years.

Tessera, founded in 1990, makes most of its money licensing its semiconductor-packaging technology, which enables smaller and faster chips. The company also has been a frequent courtroom visitor, raking in tens of millions via patent-infringement lawsuits.

Starboard has become increasingly active since spinning out two years ago from financial services firm Cowen Group. It lost a headline-grabbing proxy fight with AOL last year but is currently waging a number of other battles, including one against office products giant Office Depot.

Last year, at Starboard's behest, Openwave -- a pioneering but long-troubled maker of software for mobile communications companies -- sold off its messaging business, changed its name to Unwired Planet and quit Silicon Valley for Reno. The company, with Feld as its board chairman, now is focused exclusively on licensing "and, if necessary," suing to protect its patent portfolio.

Starboard also amassed a big stake in another valley pioneer, chip design company MIPS Technologies. After a proxy threat, MIPS agreed to place two Starboard nominees on its board; a year later, the company was sold to a British technology outfit.

Still another proxy battle is currently underway at San Jose semiconductor firm DSP Group, with a shareholder vote expected June 10. And Starboard has amassed stakes in other valley companies, including Verifone and Extreme Networks.

Starboard, which owns about a 7.6 percent stake in Tessera, already has forced through several changes at the company, including the firing of its CEO in March. Hill, the retired chief executive of Novellus, was named interim CEO. Tessera stock has drifted upward throughout the controversy, closing last week at a yearly high of $20.68.

At Thursday's shareholder meeting, Hill and the board are asking shareholders to approve a slate of six directors, half of whom are new. Starboard is proposing an alternative slate of seven candidates.

Shareholder governance body ISS has recommended against most of Starboard's slate, saying the dissidents "have not demonstrated a compelling case that further change in the reconstituted board and management team is necessary."

But several large institutional shareholders have already announced plans to back Starboard's proposal.

Contact Peter Delevett at 408-271-3638. Follow him at Twitter.com/mercwiretap.

in the cross-hairs

Here are some Silicon Valley companies in which activist New York hedge fund Starboard Value has amassed ownership stakes:

DSP Group
Extreme Networks
Integrated Device Technology

MIPS Technologies (sold to Imagination Technologies Group)

Openwave (now Unwired Planet)
Tessera Technologies
Quantum
Verifone
Source: Starboard Value regulatory filings