A federal judge granted Huawei a temporary restraining order that prevents Motorola Solutions (NYSE:MSI) from turning over any of Huawei's confidential information to Nokia Siemens Networks, putting on hold NSN's $1.2 billion acquisition of Motorola's networking business.
The order came after Huawei filed a suit in U.S. District Court for the Northern District of Illinois against Motorola and Nokia Siemens Networks, accusing Motorola of illegally transferring Huawei's intellectual property to NSN. Importantly, the judge, U.S. District Judge Sharon Johnson Coleman in Chicago, did not rule on the merits of the lawsuit, but issued the order to limit any potential damage to Huawei while the lawsuit is resolved. The judge also said Motorola must notify Huawei immediately if China's Ministry of Commerce, which is looking over the deal, takes any action.
Huawei said that in 2000 the company entered into a cooperative relationship with Motorola in which Motorola resold Huawei's wireless networks products--including radio access network and core network products covering UMTS, GSM and other technologies--using the Motorola name. Motorola was provided with products and confidential Huawei intellectual property under the agreement.
In the complaint, Huawei said Motorola is obligated to maintain the secrecy of the confidential information that Huawei provided under the agreement. The company said that since Motorola plans to transfer its wireless infrastructure business to Nokia Siemens Networks, which competes directly with Huawei, it will result in a disclosure of Huawei's confidential information to NSN and harm Huawei's business.
Motorola has said Huawei's suit is without merit and that it is still targeting early 2011 for the close of the deal. Interestingly, the Huawei suit came after Motorola sued Huawei in July, shortly after the deal with NSN was announced, alleging that former Motorola employees provided the Chinese equipment vendor with trade secrets about its own technology.
- see this WSJ article (sub. req.)
- see this Bloomberg article
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