Court upholds bar on NSN-Motorola deal

Michael Carroll
24/02/2011
News
Daily News

A US court has upheld a temporary injunction on Nokia Siemens Networks’ acquisition of Motorola’s wireless assets, after Huawei claimed the deal would cause it irreparable damage.

The decision could scupper the planned acquisition, which has been cleared by all but one relevant domestic regulator, as it will prevent NSN from operating and managing elements of Motorola’s network business that rely on Huawei information.

NSN claims the $1.2 billion Motorola deal is worthless without the information, conceding that the details held by the US vendor are essential to the ongoing operation of its businesses.

The vendor previously stated it does not hold any confidential Huawei information meaning its Chinese rival won’t be harmed by the deal.

Motorola told the court Huawei is more interested in dropping a “poison pill” to kill the deal with NSN than protecting confidential information, however the court rejected its assertion that blocking the sale would be bad for business, noting Motorola’s business was already in bad shape anyway.

At the heart of the matter are details shared between Huawei and Motorola under previous co-operation agreements. The court backed Huawei’s assertion that the details constitute trade secrets, and ordered that Motorola should not transfer any of the information to NSN until arbitration is completed.

That arbitration will seek to decide whether non-disclosure clauses attached to two main agreements between Huawei and Motorola apply.

Ross Gan, head of Huawei’s global communications team, denied the firm is looking to stop the NSN acquisition, and said Motorola should now turn its attention to the arbitration process.

“This legal action was carried out only after Motorola was unable to assure us that they would meet their contractual obligations to protect our intellectual property.

“We have no interest in stopping the transaction,” Gan told TelecomAsia.

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