Stop the Anticompetitive Patent Trolls

A growing share of business costs today has little to do with materials, labor, or technology—and everything to do with legal strategy. Companies across multiple industries are using patent litigation to impose heavy legal expenses on competitors. Now a chip company has allegedly escalated this corporate warfare by financing third-party lawsuits to heap costs on a competitor. If unchecked, this could be the start of an anti-competitive arms race, in which the U.S. economy is the loser.

In its 2023 complaint, the semiconductor company Realtek accuses its competitor MediaTek of paying the company Future Link Systems a $1 million bounty to act as a patent troll. A patent troll acquires broad patents not to develop any technology but to extract settlement money through essentially meritless nuisance suits. Future Link in 2021, according to the complaint, filed a series of patent lawsuits that it then abandoned after it had generated substantial legal costs for Realtek across a year and a half. Allegedly, MediaTek also discreetly warned Realtek’s customers of possible supply disruptions, which the latter firm says cost it business.