Realtek sues semiconductor rival MediaTek over patent ‘bounty’ agreement

Realtek Semiconductor on Tuesday sued rival Taiwanese chip maker MediaTek in federal court in Northern California, seeking to block the business of companies MediaTek is suing over patents in the United States. He claimed to have paid a “secret litigation bounty” to file a lawsuit without cause.

The lawsuit accuses MediaTek of conspiring with IPValue Management Inc to force Realtek out of the market and monopolize the industry for chips used in smart TVs and set-top boxes.

MediaTek owns nearly 60% of the global market share for TV chips, according to the lawsuit.

MediaTek and IPValue did not immediately respond to requests for comment on the lawsuit.

According to Realtek, MediaTek entered into a patent license agreement with IPValue’s subsidiary Future Link Systems LLC in 2019 that included a confidential “bounty” agreement.

The agreement emerged last year in a patent litigation involving FutureLink before the West Texas federal court and the U.S. International Trade Commission, according to the lawsuit. Realtek said Future Link hides the details of the deal “under confidentiality obligations and non-disclosure orders.”

While the ITC called the deal “disturbing” and “unfavorable and potentially actionable,” a West Texas court ruled that the deal was “inappropriate” and “cannot be blocked as a matter of public policy.” should,” he said.

Realtek says Future Link settled several other patent lawsuits against tech companies, including MediaTek competitor Amlogic, shortly after being criticized by the ITC.

Realtek says MediaTek used a patent lawsuit seeking to remove the allegedly infringing chips from the market, suggesting to customers that Realtek may be an “unreliable supplier” to the TV chip industry. It says.

Realtek has asked the court to order the companies to drop the conspiracy allegations and seek unspecified damages.

The action is Realtek Semiconductor Corp v. MediaTek Inc, United States District Court for the Northern District of California, No. 5:23-cv-02774.

For Realtek: Rudy Kim, Michael Murray, Nafeesah Attah of Paul Hastings. Steven Baik of White Hat Legal

For MediaTek and IPValue: Attorney information not available