Chipmaker Realtek Semiconductor sued rival MediaTek Inc in the Northern California Federal Court on Tuesday, accusing the latter of reaching a secret agreement with a company specializing in patent litigation, to pay “litigation bounties” to launch baseless patent lawsuits against Realtek in an attempt to disrupt Realtek’s business and monopolize the chip market for smart TVs and set-top boxes.
Realtek said in the complaint that MediaTek and Future Link Systems LLC, a subsidiary of IPValue Management Inc, signed a patent license agreement in 2019 that contained a secret “litigation bounty” agreement that was involved in Future Link’s lawsuit last year. It was exposed in patent litigation in the United States West Texas Federal Court and the United States International Trade Commission (ITC). Realtek said Future Link had been trying to “hide details of the agreement under confidentiality obligations and protective orders.”
Realtek said MediaTek used the patent lawsuits to try to remove its allegedly infringing chips from the market, while suggesting to customers that Realtek might be an “unreliable supplier” to the TV chip industry. Realtek is asking the court to order the two companies to stop the alleged conspiracy and seek an undisclosed amount of monetary damages.
According to the complaint, MediaTek owns nearly 60 percent of the global TV chip market. In a statement, Realtek said it filed the lawsuit to “protect free and fair competition in the industry” and “prevent further harm to the public.”
As of press time, MediaTek and IPValue have not commented on the lawsuit.
The ITC had called the agreement “appalling” and said it was “likely to be improper and accountable,” while the West Texas court called it “inappropriate” and “should be governed by public policy.” Future Link quickly settled patent lawsuits with several tech companies, including MediaTek rival Amlogic, following the ITC’s criticism.
