Global giants to rumble

10:00, January 26, 2011      

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Huawei Technologies Co filed a lawsuit in a US District Court in Illinois Tuesday seeking to block Motorola from selling a network equipment unit to Finland-based Nokia Siemens Networks.

Huawei, the world's second-largest telecommunications equipment provider, alleges in a press release Tuesday that Motorola's $1.2 billion deal with Nokia Siemens Networks is an illegal transfer of Huawei's intellectual property.

In July 2010, Nokia Siemens Networks announced its purchase of Motorola's wireless network business. And since 2000, Huawei and Motorola have cooperated on wireless network technology, where Motorola resold Huawei wireless network products under the Motorola name.

The Shenzhen-based Huawei asserts that it will "suffer irreparable commercial damages," if the technological know-how is transferred to Nokia Siemens Networks.

Motorola, however, has not offered Huawei any assurances, the statement said.

"As the world's third largest telecommunications equipment provider, Nokia Siemens Networks' deal with Motorola could quite possibly allow it to overtake Huawei's position in the network equipment market. So any leak of information to Nokia Siemens Networks will pose a threat to Huawei," said Ji Chendong, a telecom analyst with Frost and Sullivan China.

Huawei's lawsuit names as defendants Nokia Siemens, Motorola Solutions - which holds the network equipment unit being sold - and Motorola Mobility Inc, which holds the phone and set-top box business and intellectual property assets from the network business, according to Reuters.

Motorola Mobility was separated from the rest of Motorola on January 4.

Motorola Solutions officials in China said Tuesday that they have not received any information from their US headquarters on the lawsuit, while Motorola Mobility declined comment on this issue.

Nokia Siemens Networks' officials were also not available for comment.

"The significance of the suit is the impact it may have on the deal. If Huawei prevails, then Nokia Siemens Networks and Motorola may have to renegotiate or Nokia Siemens Networks may choose to walk away," Gentry Sayad, the chief representative of the law firm Fredrikson & Byron's Shanghai office, said Tuesday.

"And depending on how much evidence the court seeks from the parties, it could take several months for a permanent injunction to be issued," he said.

Motorola Solutions said the case is without merit and it still plans to close the Nokia Siemens deal early this year, according to a Reuters report Tuesday.

But analysts remain skeptical on the timetable.

"The Motorola, Nokia Siemens Networks deal will surely be affected," said Frost and Sullivan's Ji.

"(But) it is really something for a Chinese company to file an intellectual property lawsuit against a foreign company - especially when the companies involved are all big international firms," said Ji.

Source: Global Times
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