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DOJ Weighs In on MediaTek-Realtek Antitrust Battle

By  |  October 10, 2024

MediaTek, a prominent player in the global semiconductor industry, is facing intensified scrutiny as the U.S. Department of Justice (DoJ) expresses interest in an ongoing antitrust dispute with fellow Taiwanese chipmaker Realtek. The dispute, which centers around allegations of anti-competitive behavior, has gained significant attention following a lawsuit filed by Realtek last year.

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    According to The Register, Realtek’s lawsuit accuses MediaTek of conspiring with so-called “patent trolls” to launch baseless patent infringement cases, allegedly with the intent to stifle competition. These claims specifically pertain to semiconductor chips used in television sets, where MediaTek holds a dominant position with an estimated market share of over 70%.

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    The DoJ’s involvement became evident in an October 4 court filing, where it submitted a Statement of Interest to highlight the potentially “anticompetitive” aspects of MediaTek’s actions. In the filing, the department underscored the “unprecedented nature” of the alleged litigation bounty agreement between MediaTek and patent assertion companies. The Register notes that the DoJ’s statement emphasized the improper nature of such agreements, warning that they could set a harmful precedent if left unchecked.

    Realtek’s original complaint alleged that MediaTek paid Future Link Systems LLC, a patent assertion entity, a secret “bounty” to file patent litigation cases against Realtek in U.S. courts. This arrangement, Realtek claims, was designed to force the company to divert resources from product development to fight meritless lawsuits. Realtek further named Future Link’s parent company, IPValue Management, as part of this scheme, labeling both entities as “patent trolls.”

    Per The Register, Realtek revealed that the discovery of this alleged bounty agreement came during the litigation process. A license agreement between MediaTek, Future Link, and IPValue was uncovered, which allegedly contained provisions incentivizing litigation. Following the agreement, Future Link filed six patent infringement suits—four targeting Realtek and two against another competitor, Amlogic, further escalating tensions within the industry.

    MediaTek, however, has pushed back against these claims. The company and its co-defendants filed a motion to dismiss the case, citing the Noerr-Pennington doctrine. This legal defense, which protects entities from liability when petitioning the government, was invoked to argue that the allegedly anti-competitive actions were merely incidental to legitimate legal activities. MediaTek maintains that it is acting within the bounds of the law, per The Register.

    Source: The Register