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Edition: U.S. Article Comments (0) Save Email Print Reprints Most Popular Most Shared Analysis: Race issues beset Obama's "post-racial" presidency | Video 21 Jul 2010 Obama signs sweeping Wall Street overhaul into law | Video 21 Jul 2010 Clintons in tears over Chelsea? 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You can bet on it 19 Jul 2010 Chinese police beat official's wife by mistake 21 Jul 2010 Gold slips on equities 2:06am EDT Motorola sues Huawei for trade secret theft Digg This Tweet This Share on LinkedIn Share on Facebook Factbox Factbox: Key problems facing Nokia CEO Tue, Jul 20 2010 Related News UPDATE 2-Motorola sues Huawei for trade secret theft 1:09am EDT Motorola sues Huawei, Lemko for trade secret theft Wed, Jul 21 2010 Juniper revenue up but shares dip on modest outlook Tue, Jul 20 2010 UPDATE 4-Nokia Siemens wins $7 bln U.S. deal Tue, Jul 20 2010 Related Topics Technology » iPad » Media » China » China Labor Unrest » Stocks By Phil Wahba and Melanie Lee NEW YORK/SHANGHAI | Thu Jul 22, 2010 1:21am EDT NEW YORK/SHANGHAI (Reuters) - U.S. mobile phone maker Motorola Inc (MOT.N) has sued China's Huawei Technologies Co HWT.UL for alleged theft of trade secrets, highlighting the fast-growing Chinese firm's difficulty in shaking the nation's reputation for piracy. In an initial suit, filed in 2008, Motorola sued five of its former workers for allegedly sharing trade secrets with Lemko, which was also named in the suit and has a reseller agreement with Huawei. In the amended complaint, filed on July 16 in a federal court in Chicago, Motorola claimed an engineer shared information about a Motorola transceiver and other technology with Huawei's founder, Ren Zhengfei, a former officer in China's People's Liberation Army. Motorola claimed a string of emails tagged "Motorola Confidential Proprietary" showed that "Huawei and its officers knew they were receiving stolen Motorola proprietary trade secrets and confidential information without Motorola's authorization and consent," according to the suit. Huawei said the lawsuit was groundless. "Huawei has no relationship with Lemko, other than a reseller agreement. Huawei will vigorously defend itself against baseless allegations," the company said in an emailed statement. Cases like these are hard to prove from an evidence point of view, said Connie Carnabuci, a technology, intellectual property expert and partner at Freshfields in Hong Kong. "Cases involving misappropriation of proprietary information are usually very difficult cases to run," Carnabuci said. "This case is being brought in the courts of the United States, one thing interesting is that decisions of the U.S. courts are not enforceable in China," she added. Schaumburg, Illinois-based Motorola accused Huawei of various violations including threatened or actual misappropriation of trade secrets, breach of fiduciary duty and usurpation of corporate opportunity. Since at least 2006, Motorola had required its engineers to sign a confidentiality agreement, according to the filing. Motorola spokeswoman Jennifer Erickson said: "We don't comment on pending litigation, but will continue to vigorously defend our IP (intellectual property)." Lemko could not be reached for comment. DIVERGING FORTUNES Huawei and Motorola were once fierce rivals in China's fast-growing telecoms market, but their fortunes have diverged in the last few years. Over that time, Huawei has risen to become the world's second-largest seller of wireless telecoms equipment, notching major sales not only in developing markets but also in lucrative Western Europe markets. Motorola, meanwhile, has seen its networking equipment business struggle in recent years as its mobile phone business also lost ground. It now looks poised to exit the networking equipment business, announcing earlier this week it would sell the unit to Nokia Siemens Networks NSN.UL for $1.2 billion. Motorola's ongoing case against Huawei comes as the Chinese company is trying to push for legitimacy in the global arena despite wariness from Western politicians over Ren's government and military ties. In 2008, Huawei's bid to buy U.S. firm 3Com fell through after opposition from U.S. lawmakers. The Motorola lawsuit has echos of another lawsuit Huawei faced. In 2004, Cisco Systems Inc (CSCO.O) agreed to drop a drawn-out lawsuit against Huawei after the latter agreed to make some product changes. "There is a lot of attention amongst Chinese companies and (multinational companies) doing business in China where people are looking at their business practices and ways to minimize unauthorized leakage of information," Carnabuci said. (Additional reporting by Helen Chernikoff and Sinead Carew in NEW YORK; Editing by Jacqueline Wong and Lincoln Feast) Technology iPad Media China China Labor Unrest Add a Comment *We welcome comments that advance the story directly or with relevant tangential information. We try to block comments that use offensive language or appear to be spam and review comments frequently to ensure they meet our standards. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. 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Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests. NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.

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