Chinese telecommunications company Huawei Technologies Co. sued Motorola and Nokia Siemens Networks Monday, seeking to stop the planned $1.2 billion sale of Motorola’s networks business to the European company.
The lawsuit, filed in U.S. District Court for the Northern District of Illinois, marks the first time Huawei has sued a U.S. company.
Motorola and Nokia Siemens Networks announced their deal in July. The transaction was initially targeted to close by the end of 2010, but the companies are still waiting for approval from the Chinese Ministry of Commerce’s Anti-Monopoly Bureau. Regulatory bodies in the U.S., European Union and six other countries have OKd the deal. Nokia Siemens Networks said in December that it is now aiming to close the transaction this quarter.
Earlier this year, Motorola split into Motorola Solutions, which makes communications equipment for government and industrial clients, and Motorola Mobility, which makes mobile devices and TV set-top boxes. Both of the new companies, as well as the now-extinct Motorola Inc., are named in the suit.
While Nokia Siemens Networks is also named in the suit, the legal action centers on Motorola. According to the lawsuit, Motorola and Huawei have had various agreements, dating to 2000, where Motorola has purchased Huawei network technologies and sold them under its own brand. Huawei said that Motorola’s purchases have totaled about $878 million since 2000 and that the agreements provided for a complementary relationship, where the two companies did not sell competing products.
In its lawsuit, Huawei said Motorola asked the company in September whether its agreements could be reassigned to Nokia Siemens Networks. The Chinese company balked because “NSN is a chief competitor of Huawei that offers competing network software and hardware to the same customers,” the complaint said.
Subsequent conversations between the companies have failed to yield fruit, and “it now appears that an arbitration will be necessary,” Huawei said. The Chinese firm is asking the court to stop Motorola from transferring any of Huawei’s intellectual property to Nokia Siemens Networks.
Motorola Solutions said it believes “this lawsuit is without merit” and it is still targeting early 2011 for completing the sale of the networks business. Nokia Siemens Networks said it does not comment on pending lawsuits or their contents.
“Motorola’s failure to adopt measures sufficient to ensure that Huawei’s proprietary information remains confidential has compelled the company to file for the appropriate legal protection of its rights,” Huawei said in a statement.
wawong@tribune.com
