Chinese telecommunications company Huawei filed a lawsuit against Motorola on Monday alleging misappropriation of trade secrets, copyright infringement, and breach of contract related to Motorola’s $1.2 billion wireless infrastructure deal with Nokia Siemens Networks.
In July, Motorola agreed to sell its GSM and CDMA wireless infrastructure business to Nokia Siemens for $1.2 billion, a deal which promised to vastly improve Motorola’s cash situation as it moved toward the completion of its split into two companies.
According to Huawei, Motorola has purchased the Chinese company’s UMTS and GSM products and sold them under its own brand since July 16, 2000. Together, the two companies had a Cooperative Development and Licensing Agreement, under which Huawei was required to provide certain confidential information to Motorola under strict protections against disclosure to third parties. Huawei’s complaint says these confidentiality obligations were built to survive the termination of the development and licensing agreement.
“While Huawei has focused on innovation, research and development,
Motorola has focused on sales and professional services in these technical areas,” the company’s complaint, filed in the Northeastern District Court of Illinois, said.
“Motorola is obligated to maintain the secrecy of the confidential information that
Huawei provided to it under…agreement. Now, however, Motorola intends to transfer its wireless infrastructure business, including its UMTS and GSM business, to [Nokia-Siemens], which competes directly with Huawei. Such a transfer, if consummated in its originally contemplated form, will result in the massive disclosure of Huawei’s confidential information to NSN, with irreparable harm to Huawei.”
Huawei worries that a large number of Motorola employees with extensive knowledge of its confidential information will become employees of Nokia-Siemens, and its lawsuit today asks for the deal between Motorola and NSN to be halted, so that arbitration can take place. The company wants a tribunal to isolate the parts of Motorola’s wireless business related to Huawei’s GSM and UMTS trade secrets.