T-Mobile wins $4.8M ruling against Huawei over alleged theft of smartphone-testing robot ‘Tappy’

T-Mobile said it designed Tappy to test touchscreen smartphones. (T-Mobile)

A jury awarded $4.8 million to T-Mobile, finding that Huawei misappropriated T-Mobile’s trade secrets. The case centered on allegations that Huawei employees took pictures of and pieces from a smartphone-testing robot called “Tappy” that was developed by T-Mobile.

Although the jury ruled in T-Mobile’s favor, they did not find that Huawei's misappropriation was "willful and malicious." T-Mobile had sought $500 million in damages, a figure the carrier said covered lost profits, possible revenues from licensing Tappy and punitive damages.

“Huawei is analyzing the jury’s verdict and evaluating its legal options,” Huawei executive William Plummer said in a statement issued to several media outlets after the jury’s ruling. “Huawei continues to believe in the merits of its defense to the allegations made by T-Mobile. According to the jury’s verdict, T-Mobile was not awarded any damages relating to the trade secrets claim and there was no award of punitive damages. Although the jury awarded damages under the breach of contract allegation, the amount was a small fraction of what T-Mobile requested. Huawei is a global leader in innovation, and respect for intellectual property is a cornerstone value in our business.”

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According to reports, T-Mobile did not respond to requests for comment.

T-Mobile’s lawsuit against Huawei emerged in 2014. The lawsuit claimed that two Huawei employees gained illicit access to T-Mobile’s lab in Bellevue, Washington, photographed Tappy’s robotic arm, tried to smuggle parts of it out of the lab, and then tried to sneak back in after they were banned from the facility.

For its part, T-Mobile claimed that in 2007, it was the first carrier to design a robot to test handsets "by performing touches on the phone the same way a human being would—only much more frequently in a shorter period of time."

That led T-Mobile to cut costs, get more reliable testing data and thus get more reliable handsets.

Interestingly, Huawei remains largely absent from U.S. wireless carrier stores, despite the fact that the Chinese company was the world’s third-largest smartphone vendor in the first quarter, according to figures from research firm IDC. The firm said Huawei’s global smartphone shipments grew 22% to 34.2 million units, largely due to the company’s success in the Chinese market.

“Although Huawei announced earlier in the month that the Mate 9 has sold over 5 million units since it launched in November, here in the U.S. the device, as well as the brand, has failed to grab consumer's attention. This U.S. attention is something they will need if they aspire to displace the two market leaders. The launch of the new P10 flagship and the new P10 Plus at the very end of the quarter presents consumers a valid third option (outside of Apple and Samsung) for the coming quarter thanks to both premium design and similar performance,” IDC analysts wrote.

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The company is now mulling over what to do with its 5G modem business.

The carrier’s total revenues increased by 6% year-over-year to $11.1 billion, and it reported net income for the quarter of $908 million, up 35% year-over-year.

The company said it will choose a Western vendor for core products.