Realtek Files Lawsuit Against MediaTek over Patent ‘Bounty’ Agreement

Realtek Files Lawsuit Against MediaTek over Patent ‘Bounty’ Agreement

A lawsuit has been filed before the Northern California Federal Court by the Realtek Semiconductor Corp against its rival Taiwanese chipmaker MediaTek Inc, accussing that MediaTek paid a company that sues over patents a “secret litigation bounty” to file meritless lawsuits in the United States to disrupt its business.

According to the lawsuit, MediaTek has conspired with IPValue Management Inc in order to drive Realtek out of the market as well as monopolize the market for chips used in smart televisions and set-top boxes in order to monopolize the market.

MediaTek owns nearly 60 percent of the global market share for television chips, as per the lawsuit.

Realtek in its statement said that the reason it filed the lawsuit was in order to ‘protect free and fair competition in the industry’ and ‘prevent further harm to the public.’

According to Realtek, MediaTek signed a patent licensing agreement with IPValue subsidiary Future Link Systems LLC in 2019 that included the secret ‘bounty’ agreement.

Last year, it was revealed by Future Link that it had signed a patent agreement with the US International Trade Commission, according to the lawsuit filed against Future Link in the West Texas federal court. In its latest disclosure Realtek said Future Link has kept details of the agreement ‘buried under confidentiality obligations and protective orders.’

The ITC described the agreement as 'alarming' and said it might be untoward and actionable on its face, while the West Texas court stated that it was ‘improper’ and ‘should not be tolerated as a matter of public policy.’

After receiving criticism from ITC, Future Link settled several other patent cases against tech companies including MediaTek competitor Amlogic.

The company said MediaTek has used the patent lawsuits, which are intended to prevent its allegedly infringing chips from being sold on the market, to suggest to customers that it may not be a reliable supplier for the world of semiconductors for televisions.

Realtek has further asked the Court to order the companies to end the alleged conspiracy and requested an unspecified amount of money damages.

Realtek is represented by Rudy Kim, Michael Murray and Nafeesah Attah of Paul Hastings; Steven Baik of White Hat Legal.