TP-Link is suing rival networking vendor Netgear, alleging that the rival and its CEO carried out a smear campaign by falsely suggesting, it says, that the biz had been infiltrated by the Chinese government.
“The accusation is baseless,” TP-Link said in a complaint [PDF] filed this week in Delaware, asserting that it is a US company incorporated and headquartered in California, and that it has no ties with the Chinese government.
In the complaint, TP-Link claims that Netgear spread falsehoods about the security of TP-Link’s products through public channels and earnings calls – information it said prompted “the media and others to spread this disinformation, thereby harming TP-Link’s reputation.”
TP-Link’s filing seeks a jury trial. It is pursuing damages, alleging various legal violations, including commercial disparagement, defamation, unjust enrichment, and a breach of contract.
The latter action specifically relates to the $135 million TP-Link paid Netgear in 2024 to settle multiple patent-related lawsuits.
As part of the deal, TP-Link claims that Netgear agreed to cease publishing disparaging, derogatory, and untrue statements about its market competitor, an agreement it claims Netgear has broken by allegedly “return[ing] to the exact conduct prohibited by that Agreement: disparaging TP-Link and TP-Link’s business and competing unfairly rather than on the merits of the parties’ products.”
“In so doing, Netgear has breached its contractual obligations and deprived TP-Link of the benefit of the bargain for which TP-Link negotiated and paid $135 million,” the vendor stated in the lawsuit.
Netgear’s earnings calls
TP-Link also adds exhibits [PDF] that it alleges that support its claims. The attachments quote from numerous earnings calls Netgear held with analysts, investors, and journalists. TP-Link alleges Netgear spread false information about the security of its products and falsely portrayed the company as infiltrated by the Chinese government, “passing along misinformation Netgear had covertly injected into the public through the media and other proxies in the first place.”
It cited, as an example, Netgear’s February 5 earnings call. TP-Link claimed that in the call, Netgear CEO Charles Prober referenced a Microsoft blog, and accused Prober of taking elements out of context and suggesting that TP-Link was a national security risk.
On the call, Prober responded to one analyst by referencing Microsoft’s report on Storm-0940, which noted the state-sponsored group had recruited TP-Link routers for a botnet used to carry out evasive password spraying attacks to gather credentials for US corporate networks.
The CEO’s response stated that the blog post “really exposed kind of TP-Link’s role in some of these typhoons that the US is facing.” Earlier in the call, Prober also referenced “the government scrutiny of TP-Link as a national security risk,” which was “exposed” by national media outlets.
TP-Link claimed that the language Prober used on the call was “false and misleading,” and that the Microsoft blog did not suggest the vendor had any “role” in the attacks, nor did it attribute any aspect of the attacks by the various Chinese groups to TP-Link itself.
It also took issue with Prober’s reference to “these Typhoons.”
The infosec industry tracks many of the known Chinese state-sponsored cyberespionage groups using the Typhoon name (Salt Typhoon, Silk Typhoon, and others), and the attribution of some of the most impactful attacks recently in the US has been assigned to these groups. Microsoft’s blog does not mention any Typhoon group’s involvement in that specific campaign.
“It is untrue, disparaging, and derogatory for Netgear’s CEO to assert that TP-Link should not be viewed as ‘trusted’ because it is ‘China-based.’ TP-Link is based in California, where it is incorporated and headquartered. TP-Link employs a local workforce of over 500 personnel in California, and its US-based executives and managers exercise global decision-making authority,” the complaint writes.
According to the filing, TP-Link’s predecessor company was founded in China in 1996, although it says there are now two distinct businesses – TP-Link Technologies, which remains based in China, and TP-Link Systems, which is based in the US.
In addition to the statements made on its rival’s earnings calls, TP-Link said that it suspects Netgear “fed false and misleading information to third parties,” and “retained prominent industry personalities and influential commentators to propagate its false messages.”
In a statement to The Register, Netgear said: “We are aware of the complaint filed by TP-Link. The claims are without merit and we intend to respond through the appropriate legal channels. Netgear remains focused on its commitment to innovation, product security, and serving our customers.”
Wider reports in news media have asserted that multiple US government agencies have opened investigations into TP-Link, although this has never been confirmed via official channels. ®