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Via sues Mediatek over patent

Via Technologies Inc (威盛電子), the world's second-largest maker of chipsets for personal computers, said it has sued Taiwan rival MediaTek Inc (聯發科技) for patent violation.

Via filed the suit in the US District Court in San Francisco for patents used in chips that control compact disc and DVD players, the company said in an e-mailed statement.

MediaTek, the world's largest designer of DVD chips, last year displaced Via to become Taiwan's largest chip designer.

Via said it will seek a preliminary court order to halt the sale of MediaTek products in the US Mediatek said in an e-mailed statement it hasn't received any notification of the suit.

Via is the latest company in the DVD chip business to file suit against rivals for patent violation. Suppliers of the chips may be seeking legal means to shore up profit, which waned starting in the first quarter last year.

Fremont, California-based ESS Technology Inc, the world's second-largest maker of DVD chips, on Sept. 30 last year said it filed suit against MediaTek for violation of copyrights and sought to halt sales of MediaTek products in the US.

MediaTek on June 25 last year filed suit against Via in the US for violation of patents related to chips that control disc players. The company didn't provide details on the status of the legal proceedings in yesterday's statement.

MediaTek's profit growth has slipped since the first quarter last year, when net income quadrupled after consumers spent more on home-entertainment products such as DVD players following the Sept. 11, 2001 attacks in the US. First-quarter profit this year rose 18 percent from a year ago to NT$3.9 billion (US$112.4 million).

ESS posted a loss of US$2.1 million in the first quarter.

Via, which started selling DVD chips last year, had a first-quarter net loss of NT$646 million, compared with net income of NT$1.1 billion a year ago, after legal fees and other costs from a legal dispute with Intel Corp sapped earnings.

On April 7, Via and Intel, the world's biggest chipmaker, settled all 11 patent suits pending between the companies in 11 countries. The rivals signed a 10-year agreement to license each other's products, and Intel agreed not to claim patents on some processors for three years.

Via and Intel make chipsets, which work with processors to manage personal-computer functions such as memory and graphics.

Via also started making processors, Intel's main product, in competition with the Santa Clara, California-based company more than two years ago.

Via started selling chips for DVD players after profit in the computer chip business waned last year.

Sales and profit should improve in the current and third quarters, the company has said.
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