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Huawei wins injunction against Motorola

Ruling bars Motorola from divulging trade secrets gained through its partnership with Huawei as the former looks to sell its wireless gear business to Nokia Siemens Networks.

Huawei has won a court order that prevents Motorola Solutions from revealing trade secrets as the latter looks to sell its wireless equipment business to Nokia Siemens Networks.

Filing a lawsuit against Motorola late last month, the Chinese telecom equipment provider claims that Motorola could potentially share trade secrets with Nokia Siemens in the $1.2 billion deal that would transfer both Motorola technology and employees.

Motorola has for years been selling Huawei's wireless equipment, so its employees are well versed in Huawei's products and technology. Huawei considers Nokia Siemens a competitor. As a result, Huawei argues that the Motorola employees who move to Nokia Siemens pose a problem because they have direct knowledge of Huawei trade secrets.

The injunction, handed down Tuesday by Judge Sharon Johnson Coleman in U.S. District Court in Illinois, states that Huawei demonstrated the merits of its case, pointing to Nokia Siemens' plan to "hire former Motorola employees with knowledge of Huawei's trade secrets." The judge also found that "Huawei has established that it will suffer irreparable competitive harm if its trade secrets are disclosed to NSN or are inevitably relied upon by former Motorola employees who transfer to NSN."

The injunction issued Tuesday follows a temporary restraining order that was granted last month after the suit was filed.

The new ruling bars only the divulging of trade secrets to Nokia Siemens--not the actual sale of Motorola's network business, as Huawei had requested.

Nicholas Sweers, Motorola Solutions' vice president for global communications, e-mailed the company's official comment to CNET. "We are extremely pleased that the judge denied that portion of Huawei's request that would have blocked our sale of the business to NSN, specifically preventing the transfer of Motorola Solutions' employees to NSN; and carving out a portion of the business from the sale to NSN."

However, Huawei sees victory.

Bill Plummer, Huawei's vice president of external affairs, told CNET that "we're genuinely pleased that the court has recognized the merits of the claim and that the court has recognized that Motorola needs to abide by its contractual obligations to protect our trade secrets and intellectual property rights."

In its defense, Motorola said that it "respects and will continue to protect Huawei's confidential information" as outlined in agreements the two companies signed around five years ago. But Huawei is looking to arbitration as the next step.

"We look forward now to Motorola turning its focus to the substantive process of arbitration as called for in our contracts so that we can ensure that our intellectual property rights are protected and they can move on with their sale to our competitor," Plummer said.

Motorola said it is still looking to close the deal with Nokia Siemens before the end of the first quarter and is pursuing approval with Chinese regulatory authorities.