China's Huawei Technologies Co., Ltd. and Motorola Solutions Inc. have agreed to settle a legal dispute over technology secrets, paving the way for Motorola to complete the sale of its unit to Nokia Siemens Networks (NSN).
Huawei and Motorola Solutions will drop suits against each other, with Motorola agreeing to pay an unspecified technology transfer fee to Huawei as part of the settlement, the two companies said in a joint statement on Wednesday.
According to the agreement, Huawei, China's largest telecommunications equipment manufacturer, will allow Motorola Solutions to transfer its commercial agreements with Huawei to NSN for a fee. NSN can receive and use confidential Huawei information on service networks Motorola has deployed.
Huawei filed a lawsuit against Motorola and NSN in January, claiming that Motorola had not provided any assurances it would prevent disclosures about Huawei technology to NSN. Motorola Solutions had sought an agreement to help finalize the sale to NSN, which was announced in July 2010.
Motorola, itself, sued Huawei in July of last year, alleging theft of trade secrets via former Motorola employees to Huawei in 2008.
"We regret that these disputes have occurred between our two companies. Motorola Solutions values the long-standing relationship we have had with Huawei," Greg Brown, President & CEO of Motorola Solutions, said in the statement.
In 2000, Motorola partnered with Huawei, enabling Motorola to resell certain Huawei products under the Motorola name. Over the next 10 years, Motorola purchased 880 million U.S. dollars in technology from Huawei that covered core networks and wireless access networks.
"Huawei acted properly and above board at all times and developed its products independently and without the use of any Motorola trade secrets," said Guo Ping, Vice Chairman of the Board and Executive Vice President of Huawei, in the statement.
"This is a great victory for Chinese enterprises over intellectual property rights," said Chen Jinqiao, secretary-general of a telecommunications experts panel with the Chinese Ministry of Industry and Information Technology.
The end of all pending litigation between Huawei and Motorola could help end unfair speculation over Huawei's business ethics and improve its ties with the United States, Chen said.
Huawei once claimed that a series of unproven allegations and misperceptions had hurt its ability to do business in the United States. It publicly asked the United States to launch a formal investigation into its business in an attempt to clear its name.
The unusual call followed the outcome of a recent U.S. government foreign investment review that forced Huawei to sell assets it bought from 3Leaf, a small U.S. company. Three years ago, Huawei had to drop a larger proposed investment in 3Com under similar pressure.