One more advance on the lawsuit that Huawei has brought against Motorola (NYSE: MOT) in the latter company’s attempt to sell its networks business to *Nokia* Siemens Networks: the Chinese vendor has won a preliminary injunction on the $1.2-billion deal.
“The District Court for the Northern District of Illinois issued a preliminary injunction in favor of Huawei that prevents Motorola from transferring Huawei’s confidential information to Nokia (NYSE: NOK) Siemens Networks,” Huawei said in an emailed statement.
This is a key win for the Chinese vendor, which this month had to pull out of buying the assets of a U.S. server technology company, 3Leaf Systems, after regulators said they would not support the deal.
Huawei and Motorola had been working together in a “cooperative relationship” since 2000, when Motorola began to sell Huawei wireless network products under the Motorola brand. Under that deal, Huawei also shared confidential IP with Motorola. It is this confidential IP that is the subject of this dispute: Huawei says it wants to make sure that it is not transferred to NSN as part of the acquisition.
As part of the judge’s ruling today, Motorola will also be required to hire a third party to ensure Huawei’s confidential information is securely removed from the network assets. And Huawei itself will be able audit the “record of service [that NSN] performs on Motorola-branded systems that include Huawei products.”
When the suit was first filed in January, the VP for global communications for Motorola Solutions, Nicholas Sweers, emailed mocoNews to say that the company is still aiming to complete the sale of its networks NSN by “early 2011 following receipt of approval from China’s antitrust authorities.”
But today’s ruling will likely cause a delay to the $1.2 billion sale of Motorola’s network business assets to Nokia Siemens Networks-assets that Huawei originally had wanted to buy itself but lost to NSN in an auction process last year.
“Huawei is pleased that the court continues to recognize the merits of our claim that Motorola must abide by its contractual obligations to protect Huawei’s trade secrets and intellectual property. We hope Motorola will now turn its focus to ensuring that Huawei’s intellectual property rights are well protected,” Huawei said in its statement.