By Allen Tsai | Wed Jul 21, 2010 9:10 pm |
Motorola has filed a lawsuit against Huawei, accusing the Chinese rival of conspiring with former employees to steal trade secrets over a number of years.
The Schaumburg, Ill.-based company claims that Huawei, a leading telecom-equipment provider, had secretly worked several of its engineers to steal confidential designs on its network equipment since 2001.In the lawsuit, Motorola named over a dozen of its former workers, including Shaowei Pan, who it says covertly reported to Huawei's chief executive, Ren Zhengfei, a former officer in China's People's Liberation Army. In 2004, Pan left Motorola to help set up and become the chief technology officer of Lemko, a neighboring company, which Motorola claims was established with the sole purpose of stealing more of its secrets. Pan denies the allegations and argues that he, in fact, invented a number of the technologies Motorola claims he stole, creating them after leaving the company. "The complaint groundless and utterly without merit," said Charlie Chen, Huawei's senior vice president of North American marketing. "Huawei has no relationship with Lemko, other than a reseller agreement. Huawei will vigorously defend itself against baseless allegations." Lemko, in turn, says Motorola is falsely attacking it in an attempt to put it into bankruptcy and take over its assets. "It is unfortunate that Motorola continues to define its success by the number of frivolous lawsuits it commences," a Lemko spokesman said. But court documents reveal that in May, Pan tried to destroy the contents of his home computers using file-destruction software, before a judge ordered him to hand over the data. Motorola said it has recovered some of the evidence that details the elaborate operation, including transmissions of Motorola product specification documents marked "confidential" to Huawei. According to emails recovered, in 2001, Pan, a senior engineer responsible for network architecture at Motorola at the time, met with Ren in Beijing. He and two other Motorola engineers returned to China two years later to visit Huawei's top management, including the company's vice president of wireless communications, JinLong Hou. Following this trip, Pan, at Huawei's request, began sending base station specifications, marked "Motorola Confidential Property," to Huawei executives. "Attached please find those document about SC300 (CDMA 2000 1X) specification you asked," Pan wrote to Hou. Court records show that Hou acknowledged receiving the email. Lemko and Huawei are now selling equipment based on that technology. Motorola also claims that Hanjuan Jin, a defendant who started working for Motorola as a software engineer in 1998, had been secretly working for Lemko around 2004. During this time, she accessed Motorola's internal computers and continued to steal confidential information. In 2007, Jin, who was trying to board a one-way flight to Beijing from Chicago, was stopped by U.S. Customs officials. She was found to be carrying more than 1,000 paper and electronic documents concerning Motorola trade secrets and $30,000 in cash. Huawei has been accused of stealing trade secrets from U.S. companies in the past. In 2003, Cisco Systems accused the Chinese company of stealing its router code. The lawsuit was eventually dropped only after Huawei agreed to remove its routers from the market and change them. Motorola also joins Google in raising concerns that China has been using underhanded corporate espionage tactics to obtain advanced technology. Earlier this year, the Internet search giant claimed that attempts to break into its servers had been traced back to Chinese hackers. Earlier this week, Motorola agreed to sell most of the wireless network business at question to Nokia Siemens Networks for $1.2 billion.
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