Tessera Technologies Inc. (TSRA), the technology licensing company run by CEO Thomas Lacy, posted a 23% drop in net income in the second quarter on higher expenses.

San Jose, California-based Tessera said second quarter net income fell to $23.5 million, or 48 cents a share from $30.2 million, or 60 cents a share. Operating income fell to $30.2 million, or 60 cents a share, from $31.5 million, or 58 cents a share, a year ago. The company was expected to earn 56 cents a share, according to the average analyst estimate.

Revenue rose to $67 million from $64.2 million, a year ago. The company was expected to report revenue of $65.17 million, according to the average analyst estimate.

Total expenses increased to $32.9 million from $27.4 million, on higher research and development, litigation and patent amortization expenses. Selling, general and administrative expenses also rose to $11.17 million from $11.12 million.

Litigation expenses increased to $5.3 million from $3.5 million. Tessera increased research and development spending to $10.3 million from $$7.9 million. Patent amortization expenses increased to $6.05 million from $4.7 million.

The increase in litigation costs comes as Tessera launched a significant and material patent enforcement campaign involving 8 patents against Broadcom Ltd. at the U.S. International Trade Commission and courts in the Netherlands and Germany and in the U.S. District Court in Wilmington, Delaware.

The company has said that the enforcement campaign against Broadcom means an increase in litigation expenses in the range of 4% to 10% of revenue. That means Tessera could spend up to about $26 million this year on the litigation. The company spent some $6.5 million on litigation in the first quarter.

For the third quarter of 2016, Tessera said it expects total revenue to be between $61 million and

$63 million; GAAP earnings per share to be between 39 cents and 41 cents per diluted share; and operating earnings per share to be between 51 cents and 53 cents per diluted share.

For the full-year 2016, the company reiterated its total revenue guidance range of between $255 million and $270 million.

Tessera ended the quarter with cash and cash equivalents of $371.8 million.

Shares of Tessera fell 56 cents or 1.7% to $32.07 a share. They’ve traded between $26.21 and

$39.95 over the past year.

During a conference call with analysts and investors, Lacey said Tessera is “actively engaged” in discussions on possible acquisitions of “imaging related intellectual property.” He described the opportunities “as big and small” and stressed that Tessera would be cautious about the price of any transaction.