T-Mobile filed suit on Sept. 2, 2014, alleging that Huawei workers stole a portion of Tappy, the company's cell pho...
Case 2:14-cv-01351 Document 1 Filed 09/02/14 Page 1 of 22
1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF WASHINGTON AT SEATTLE
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T-MOBILE USA, INC., a Delaware corporation, Plaintiff,
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v. HUAWEI DEVICE USA, INC., a Texas corporation; and HUAWEI TECHNOLOGIES CO. LTD, a China company, Defendants.
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Case No. COMPLAINT FOR VIOLATION OF UNIFORM TRADE SECRETS ACT, BREACH OF CONTRACT, INTERFERENCE WITH BUSINESS EXPECTANCY, AND VIOLATION OF WASHINGTON CONSUMER PROTECTION ACT JURY DEMAND
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Plaintiff T-Mobile USA, Inc. (“T-Mobile”) brings this action against Defendants Huawei
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Device USA, Inc. (“Huawei USA”) and Huawei Technologies Co. LTD (“Huawei China”)
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(collectively “Huawei”) for theft of trade secrets, breaches of confidentiality and nondisclosure
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agreements, and additional violations that impact the public interest.
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I.
1.
INTRODUCTION
At its own expense expense,, and and with with great great ingenu ingenuity ity and effort effort,, T-Mo T-Mobil bilee over over the course course
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of several years internally developed and refined a testing robot that has dramatically improved
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diagnosis diagnosis and quality control for mobile phone handsets. handsets. T-Mobile T-Mobile has carefully guarded guarded the
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testing robot in order to protect the trade secrets behind the robot itself, its component parts and
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specifications, its software, and its functionality. COMPLAINT FOR VIOLATION OF UNIFORM TRADE SECRETS ACT, BREACH OF CONTRACT, INTERFERENCE WITH BUSINESS EXPECTANCY, AND VIOLATION OF WASHINGTON CONSUMER PROTECTION ACT - 1
KIPLING L AW GROUP PLLC 3601F 3601F REMONT AVE N, SUITE 414 SEATTLE, W ASHINGTON 98103 telephone (206) 545-0345 fax (206) 545-0350
Case 2:14-cv-01351 Document 1 Filed 09/02/14 Page 2 of 22
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2.
Huawei Huawei has stolen stolen that that technol technology ogy.. It used used that that stolen stolen technol technology ogy to develop develop and
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improve improve its own testing testing robot, which it uses for its own benefit. Huawei abused its relationsh relationship ip
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as a phone handset supplier for T-Mobile to obtain access to T-Mobile’s robot and, in violation
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of several confidentiality and nondisclosure agreements, copied the robot’s specifications and
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stole parts, software, and other trade secrets.
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3.
After After steali stealing ng T-Mobil T-Mobile’s e’s technol technology ogy,, empl employee oyeess of of Huawe Huaweii tri tried ed to conceal conceal their their
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theft, theft, but were caught on camera and discovered discovered by other means. Huawei initially initially tried tried to cover
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up its actions, but ultimately admitted that its employees misappropriated parts and information
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about T-Mobile’s robot in coordination with Huawei R&D so that Huawei could build and
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improve its own testing robot. 4.
As a resu result, lt, T-Mobi T-Mobile le is entitl entitled ed to enjoin enjoin Huawei Huawei from from usin using g this this stolen stolen
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technology technology and from using and selling selling devices that benefit from this stolen technology. technology. On
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informatio information n and belief, belief, Huawei’s wrongful wrongful use of this stolen technology technology is ongoing. Because Because of
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Huawei’s material breach of the parties’ agreements, T-Mobile was forced to cancel planned
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Huawei handset purchases and is therefore also entitled to the costs and consequential damages
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of replacing replacing Huawei as an ongoing supplier of handsets in T-Mobile’s T-Mobile’s product line – a cost that
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is at least tens of millions millions of dollars. T-Mobile T-Mobile is additionally additionally entitled to the actual damages it
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has suffered and any of Huawei’s unjust gains from its theft of T-Mobile’s valuable and
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innovative technology – gains that are currently estimated to benefit Huawei by hundreds of
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millions of dollars. II.
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5.
BACKGROUND
T-Mobil T-Mobilee is is one one of the larges largestt wire wireles lesss netw network ork operato operators rs in the United United States. States.
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With a network network that reaches ninety-six ninety-six percent of Americans, Americans, and a customer customer base of o f
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approximately fifty million, T-Mobile prides itself on the quality of its service and products.
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6.
Part Part of of T-M T-Mobil obile’s e’s bus busines inesss invo involve lvess suppl supplyi ying ng afford affordabl able, e, high high qual quality ity,, and and
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reliable reliable handsets to customers customers who use its network. network. T-Mobile T-Mobile does not directly directly develop and
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manufacture the handsets itself. itself. Rather, potential suppliers submit proposals to T-Mobile T-Mobile in a COMPLAINT FOR VIOLATION OF UNIFORM TRADE SECRETS ACT, BREACH OF CONTRACT, INTERFERENCE WITH BUSINESS EXPECTANCY, AND VIOLATION OF WASHINGTON CONSUMER PROTECTION ACT - 2
KIPLING L AW GROUP PLLC 3601F 3601F REMONT AVE N, SUITE 414 SEATTLE, W ASHINGTON 98103 telephone (206) 545-0345 fax (206) 545-0350
Case 2:14-cv-01351 Document 1 Filed 09/02/14 Page 3 of 22
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competitive competitive RFP process. process. Huawei Huawei is one of these suppliers. suppliers. For the last several several years, years, T-Mobile T-Mobile
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selected Huawei to supply phone handsets for particular segments of T-Mobile’s customer base.
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In selecting Huawei’s handsets, T-Mobile passed over devices offered by several other potential
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suppliers.
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The handse handsett suppl supply y proces processs does not end when when T-Mo T-Mobil bilee sele selects cts the particu particular lar
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handsets handsets it plans to use. T-Mobile T-Mobile works with the supplier supplier – well in advance of providing providing the
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handsets to retailers or consumers – to develop, among other things, marketing plans and quality
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control control plans. T-Mobile T-Mobile requires and oversees supplemental supplemental quality control and testing of
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handsets handsets to ensure that they function function as intended intended and do not fail in the hands of customers. customers.
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Handsets with unacceptably high failure rates lead to increased handset returns at significant cost
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to T-Mobile. And unreliable handsets cause customer dissatisfaction dissatisfaction with T-Mobile, T-Mobile, increasing
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customer churn and decreasing revenue and profitability. profitability. Handset reliability is a significant
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competitive factor.
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8.
The testin testing g proce process ss is is impor importan tantt for for impr improvi oving ng hands handset et qual quality ity,, but but it it is costly costly and
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time-consum time-consuming. ing. Faced with these issues, issues, T-Mobile in 2006 began development development of a unique and
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innovative innovative solution: solution: a proprietary proprietary testing robot that would be easily adaptable to test any handset
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at minimal cost and with little training or labor needed.
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9.
Approx Approxima imatel tely y a year year and a half half after after beginnin beginning g this projec projectt in 200 2006, 6, T-Mobil T-Mobilee
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finished finished with a fully functional functional testing testing robot. The robot, nicknamed nicknamed “Tappy,” operates by
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performing touches on the phone p hone the same way a human being would wou ld – only much more
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frequently frequently in a shorter shorter period of time – and recording recording the results. results. Simple in concept, concept, but difficult difficult
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in execution, the robot has reduced reduced the costs of testing and increased the quality of the diagnostic
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results. results. Since implementing implementing testing testing using the robot, phone returns for T-Mobile T-Mobile have declined declined
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significantly and testing time has decreased dramatically.
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10.
T-Mobil T-Mobilee is the the firs firstt develo developer per of of a testi testing ng robot robot of of this this nature nature,, and the the robot robot
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provides T-Mobile with a competitive advantage. No other o ther company compan y had developed a similar
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touch robot when it debuted in 2007. Several Several aspects of the robot are patented or patent-pendi patent-pending, ng, COMPLAINT FOR VIOLATION OF UNIFORM TRADE SECRETS ACT, BREACH OF CONTRACT, INTERFERENCE WITH BUSINESS EXPECTANCY, AND VIOLATION OF WASHINGTON CONSUMER PROTECTION ACT - 3
KIPLING L AW GROUP PLLC 3601F 3601F REMONT AVE N, SUITE 414 SEATTLE, W ASHINGTON 98103 telephone (206) 545-0345 fax (206) 545-0350
Case 2:14-cv-01351 Document 1 Filed 09/02/14 Page 4 of 22
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and the remaining innovative aspects consist consist of closely-guarded trade secrets. Since then,
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numerous numerous companies have asked T-Mobile T-Mobile whether it would license the technology to them. T-
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Mobile has not licensed to others the right to make and use their own robot based on T-Mobile’ T-Mobile’ss
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technology.
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11.
T-Mobil T-Mobilee now uses uses the the robot robot when when worki working ng with with hand handset set sup suppli pliers ers such such as
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Huawei Huawei to perform perform quality control and testing. testing. This testing occurs occurs in T-Mobile’s own labs in
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Bellevue, Bellevue, Washington. Washington. Because Because suppliers are the most familiar with their own products, products, T-
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Mobile allows suppliers into its labs under strict conditions to use T-Mobile’s robot to perform
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diagnostic tests on the phones that will be provided by T-Mobile to customers.
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12.
To prote protect ct the the trade trade secr secrets ets invol involved ved in in the functi function on and and design design of of the the robot, robot, TT-
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Mobile requires that suppliers, including Huawei, enter into contracts that prohibit them from
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misappropriating information they they learn about the robot during the testing process. Those
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suppliers, including Huawei, must agree to nondisclosure and confidentiality before they may
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test their products at T-Mobile’s labs.
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13.
With Huawei Huawei in in partic particular, ular, T-Mobile T-Mobile entered entered into into at least three separate separate contract contractss
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that barred Huawei from misappropriating trade secrets and that otherwise required Huawei to
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keep T-Mobile’s information confidential. confidential. T-Mobile’s robot, its component parts, its
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functionality, and its software were protected by these nondisclosure and confidentiality
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contracts. contracts. Huawei employees employees were only authorized authorized to use the robot to test their T-Mobile T-Mobile
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handsets in T-Mobile’s labs, and were prohibited from disclosing or using information regarding
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the robot for any other purpose. purpose.
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Beyond requiring requiring Huawei to enter into at least least three three separate separate confidential confidentiality ity and
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trade secret secret protection agreements, agreements, T-Mobile T-Mobile took further steps steps to protect protect the robot. robot. For
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example, T-Mobile required Huawei employees entering the lab to first go through security
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clearance. clearance. T-Mobile T-Mobile only allowed a limited limited number of Huawei employees employees into the lab, and those
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individuals individuals had to be explicitly explicitly authorized authorized to do so by name.
27 COMPLAINT FOR VIOLATION OF UNIFORM TRADE SECRETS ACT, BREACH OF CONTRACT, INTERFERENCE WITH BUSINESS EXPECTANCY, AND VIOLATION OF WASHINGTON CONSUMER PROTECTION ACT - 4
KIPLING L AW GROUP PLLC 3601F 3601F REMONT AVE N, SUITE 414 SEATTLE, W ASHINGTON 98103 telephone (206) 545-0345 fax (206) 545-0350
Case 2:14-cv-01351 Document 1 Filed 09/02/14 Page 5 of 22
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15.
Beginning Beginning in 2012, when Huawei Huawei was first first given access to T-Mobile’ T-Mobile’ss robot, robot,
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Huawei’s R&D department and other Huawei officials and employees conspired to steal T-
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Mobile’s trade secrets so that Huawei could copy T-Mobile’s robot. Huawei accomplished this
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by obtaining obtainin g access to T-Mobile’s labs without permission, by stealing parts of the robot, by by
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recording and copying confidential specifications, by copying operating software, and by
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violating its confidentiality and trade secret agreements with T-Mobile. T-Mobile. These particular acts are
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described described in more detail below. Huawei employees employees were caught on camera during during many of these
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acts. Huawei has since admitted admitted to several of these violations. violations.
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16.
Huawei Huawei now has its its own own test testing ing robot robot that that perfor performs ms the the same same functi functions ons as T-
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Mobile’s robot. Huawei continually stole information information from T-Mobile to develop, improve, and
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troubleshoot its own robot. Huawei admitted that it used used stolen parts from from T-Mobile’s robot to
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diagnose and address the problems it was having with its own version.
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17.
Huawei Huawei China China R&D directe directed d both both its own employ employees ees and Huawei Huawei USA
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employees employees to steal this informati information on from T-Mobile. Huawei Huawei knew that it was violating its
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confidentiality and nondisclosure agreements.
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18.
Huawei Huawei stole stole thes thesee trade trade secret secretss sole solely ly for for its its own benefit benefit.. Its Its empl employe oyees es
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attempted attempted to conceal their thefts from T-Mobile T-Mobile by lying and other subterfuge. subterfuge. For instance, instance, one
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Huawei employee who was continually peering into a security camera attempted to hide a stolen
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part from the robot behind a monitor mon itor in the T-Mobile lab. He then slipped the t he hidden part into
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his laptop bag when leaving. When confronted confronted with this theft, the Huawei employee initially initially
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denied taking anything and claimed not to know that anything was missing.
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Furthermor Furthermore, e, T-Mobile’s T-Mobile’s robot is easily easily adaptable adaptable by design to test any handset. handset.
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Indeed, Indeed, the robot was specifically specifically designed designed to be able to test devices from from any supplier. Using
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T-Mobile’s stolen technology, Huawei can therefore easily test and improve the other handsets it
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does not produce for T-Mobile. T-Mobile. On information information and belief, Huawei is already using T-Mobile’s T-Mobile’s
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stolen robot technology to test non-T-Mobile handsets and improve return rates for handsets
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developed developed and sold to other carriers. carriers. On information information and belief, Huawei has been unjustly COMPLAINT FOR VIOLATION OF UNIFORM TRADE SECRETS ACT, BREACH OF CONTRACT, INTERFERENCE WITH BUSINESS EXPECTANCY, AND VIOLATION OF WASHINGTON CONSUMER PROTECTION ACT - 5
KIPLING L AW GROUP PLLC 3601F 3601F REMONT AVE N, SUITE 414 SEATTLE, W ASHINGTON 98103 telephone (206) 545-0345 fax (206) 545-0350
Case 2:14-cv-01351 Document 1 Filed 09/02/14 Page 6 of 22
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enriched enriched and will continue continue to be unjustly enriched enriched by hundreds of millions of dollars dollars from this
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theft. theft. Huawei’s Huawei’s acts were intentional intentional and directed directed to give Huawei a competitive competitive advantage in the
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handset sales market worldwide.
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Due to Huawei’s Huawei’s material material breaches breaches of its contracts contracts with T-Mobile, T-Mobile, and its
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unlawful theft of trade secrets, T-Mobile was forced to stop its ongoing handset supply
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relationship with Huawei at substantial cost. That cost will likely reach at least tens of millions
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of dollars. T-Mobile has also incurred substantial costs in investigating investigating these violations.
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21.
T-Mobile T-Mobile is not Huawei’s Huawei’s first first victim of intellectual intellectual property property theft. theft. Huawei has
stolen stolen source code and trade secrets from from other companies. companies. It has been condemned by
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Congressional committees and other U.S. government entities for, among other things, its
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“pattern of disregard for the intellectual property rights of other entities and companies in the
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United States.”
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22.
This is an action action that that affects affects the the public public interest interest due to Huawei’s Huawei’s continuing continuing
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pattern and practice of unlawful, unfair, u nfair, and deceptive acts. T-Mobile has suffered injury from
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Huawei’s Huawei’s theft of its unique and cutting-edge cutting-edge technology. technology. T-Mobile T-Mobile seeks damages for the
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injury it has suffered suffered and for Huawei’s Huawei’s unlawful and unjust gain from the theft. Huawei should should
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also be enjoined enjoined from further further use of T-Mobile’s T-Mobile’s stolen technology and from the sale and use of
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products that have benefitted b enefitted from that stolen technology. III.
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23.
PARTIES
Plaintiff Plaintiff T-Mobile T-Mobile USA, Inc. (“T-Mobile” (“T-Mobile”)) is a Delawar Delawaree corpora corporation tion with its
principal place of business b usiness in Bellevue, Washington. 24.
Huawei Huawei Device Device USA, USA, Inc. Inc. (“Hu (“Huawe aweii USA”) USA”) is incor incorpor porate ated d under under the the laws laws of
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Texas with its principal principal place of business business in Plano, Texas. It is a successor to Futurewei Futurewei
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Technologies, Inc., and a wholly-owned subsidiary of Huawei Technologies Co. Ltd.
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Huawei Huawei Technol Technologi ogies es Co. Co. Ltd. Ltd. (“Hu (“Huawei awei China” China”)) is a Chines Chinesee compa company ny with with its its
principal place of business b usiness at Bantian, Longgang Long gang District, Shenzhen, People’s Republic of China.
27 COMPLAINT FOR VIOLATION OF UNIFORM TRADE SECRETS ACT, BREACH OF CONTRACT, INTERFERENCE WITH BUSINESS EXPECTANCY, AND VIOLATION OF WASHINGTON CONSUMER PROTECTION ACT - 6
KIPLING L AW GROUP PLLC 3601F 3601F REMONT AVE N, SUITE 414 SEATTLE, W ASHINGTON 98103 telephone (206) 545-0345 fax (206) 545-0350
Case 2:14-cv-01351 Document 1 Filed 09/02/14 Page 7 of 22
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26.
T-Mobile T-Mobile is informed informed and believes, believes, and based thereon thereon alleges, alleges, that at all times
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mentioned herein, each of the Defendants was the agent, servant and employee, co-venturer, alter
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ego, and co-conspirator of the other, and was at all times herein mentioned, acting within the
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course, scope, and purpose of such agency, employment, joint venture, and conspiracy, and with
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the consent, knowledge, ratification, and authorization of such agency, employment, joint
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venture, and conspiracy. IV. IV.
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27.
JUR JURISDI ISDIC CTION TION AND VEN VENUE
This Court has jurisdicti jurisdiction on over this action under 28 U.S.C. U.S.C. § 1332(a) 1332(a)(2) (2) because
Huawei Huawei USA is a citizen of Texas, and Huawei China is a citizen or subject of a foreign state. state. T-
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Mobile is a Delaware corporation with its principal place of business in Bellevue, Washington.
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The amount in controversy exceeds $75,000, exclusive of interest and costs.
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28.
Venue Venue is is proper proper under under 28 U.S.C. U.S.C. § 1391(b) 1391(b) becaus becausee a subs substan tantia tiall part part of of the
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events or omissions omissions giving rise to the claims occurred, and a substantial substantial part of the property that
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is the subject of this action is situated, situated, in King County, Washington. Washington. Additionally Additionally,, venue is
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proper under unde r the parties’ Handset and Accessory Supply Sup ply Agreement, which requires the matter
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be filed in King County, Washington. V.
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T-Mobile’s Proprietary Testing Robot
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GENERAL ALL LLE EGATIO TIONS
29.
In February February 2006, T-Mobile T-Mobile began development development of its solution solution for automated automated
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phone testing that would improve diagnostic ability, reduce testing time, improve reliability,
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limit handset handset returns, returns, and reduce churn caused by handset reliability reliability issues. issues. After roughly roughly one
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and a half years and significant investment, T-Mobile introduced the first generation of its
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proprietary testing robot.
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30.
The testing testing robot is designed designed to press buttons, buttons, push rollerball rollerballs, s, and navigate navigate
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touchscreens touchscreens in imitation imitation of a human phone user. The robot can execute usage scenarios scenarios such as
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typing, playing music, making calls, gaming, web browsing, and downloading applications.
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After each test, it provides provides detailed data, including video footage, footage, on how the tested device COMPLAINT FOR VIOLATION OF UNIFORM TRADE SECRETS ACT, BREACH OF CONTRACT, INTERFERENCE WITH BUSINESS EXPECTANCY, AND VIOLATION OF WASHINGTON CONSUMER PROTECTION ACT - 7
KIPLING L AW GROUP PLLC 3601F 3601F REMONT AVE N, SUITE 414 SEATTLE, W ASHINGTON 98103 telephone (206) 545-0345 fax (206) 545-0350
Case 2:14-cv-01351 Document 1 Filed 09/02/14 Page 8 of 22
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performed and where it failed. The robot has been b een improved and refined over ov er the last several
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years. For instance, the first generation of the robot tested traditional button handsets rather rather than
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touchscreen touchscreen handsets. handsets. T-Mobile T-Mobile then developed improvements improvements to the robot that allowed allowed it to test
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touchscreen phones.
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31.
Software Software problems problems with handsets handsets have become a frequent frequent reason reason for device
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returns in recent years. Appropriate testing and quality assurance allows T-Mobile devices to
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execute hundreds of tasks over an extended period of time without stalls, freezes, or glitches.
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32.
The robot robot can perf perform orm test testss in a day day that that emul emulate ate hand handset set usage usage for severa severall weeks. weeks.
Since T-Mobile T-Mobile began using the robot, device return costs have been significantly significantly reduced. T-
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Mobile has received numerous inquiries from original equipment manufacturers and other
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companies companies about buying the robot or licensing licensing its technology. technology. T-Mobile T-Mobile has not sold or licensed
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the technology.
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33.
The robot robot is is hooked hooked up to to a compu computer ter,, which which allo allows ws the the user user to chang changee the the
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operation of the robot and record record testing results. The robot’s operating software software is confidential
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and proprietary proprietary and was also developed developed by T-Mobile. T-Mobile. The current version version of the robot embodies
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closely guarded trade secrets as well as patented and patent-pending technology.
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34.
T-Mobile T-Mobile has testing testing facilities facilities at its Bellevue, Bellevue, Washington Washington campus. campus. T-Mobile T-Mobile
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permits its phone suppliers to access these facilities and use u se the robot to test the devices that they
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supply to T-Mobile. T-Mobile. As a matter matter of policy, policy, T-Mobile requires requires suppliers suppliers to sign nondisclosu nondisclosure re
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agreements to protect T-Mobile’s proprietary technology, and the robot in particular. T-Mobile’s Contracts with Huawei
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35.
T-Mobile T-Mobile and Futurewei Futurewei Technologies Technologies,, Inc. d/b/a Huawei Technologies Technologies (USA)
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(“Futurewei (“Futurewei”) ”) entered into a Handset Handset and Accessory Accessory Supply Agreement on June 2, 2010 (the
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“Supply Agreement”) Agreement”).. This agreement agreement sets forth the terms under which T-Mobile would order, order,
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and Huawei would supply, supply, handsets and accessories accessories over a term of several years. Both parties parties
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committed to various measures as part of the supplier relationship, and agreed to protect and not
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share confidential trade secrets necessarily disclosed in the performance of the parties’ duties. COMPLAINT FOR VIOLATION OF UNIFORM TRADE SECRETS ACT, BREACH OF CONTRACT, INTERFERENCE WITH BUSINESS EXPECTANCY, AND VIOLATION OF WASHINGTON CONSUMER PROTECTION ACT - 8
KIPLING L AW GROUP PLLC 3601F 3601F REMONT AVE N, SUITE 414 SEATTLE, W ASHINGTON 98103 telephone (206) 545-0345 fax (206) 545-0350
Case 2:14-cv-01351 Document 1 Filed 09/02/14 Page 9 of 22
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36.
Futurewei Futurewei thereafter thereafter splintered splintered into three entities entities and assigned assigned the Supply
Agreement to Huawei USA. 37.
T-Mobile T-Mobile and Huawei additionally additionally entered entered into a Mutual Nondisclosur Nondisclosuree
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Agreement (“the NDA”) relating to the “testing of [Huawei’s] handset and accessories on T-
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Mobile’s Mobile’s premises premises utilizing utilizing automated robotic robotic testers” testers” on July 31, 2012. Each party promised promised to
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use confidential information received from the other only for the express purpose stated in the
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NDA – handset testing on T-Mobile’s premises using u sing automated robotic testers. Attempts to
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copy confidential and trade secret information via reverse engineering, photography, attempting
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to discover source code, and other means are expressly prohibited prohibited by the NDA.
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38.
The NDA is signed signed by Huaw Huawei ei USA. USA. The NDA provide providess that that Huawei Huawei USA also also
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signs on behalf of its parent, parent, Huawei China. Thus, the contract contract is binding on both Huawei USA
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and Huawei China.
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39.
Shortly Shortly thereafter thereafter,, T-Mobil T-Mobilee and Huawei USA entered entered into a Letter Letter Agreement Agreement
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(“The Clean Room Letter”) elaborating on the “general understanding and agreement between
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the parties relating relating to the contemplated contemplated robot testing testing protocol.” protocol.” The Clean Room Letter, which is
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supplemental to the Supply Agreement, specifically identifies the testing robot as protected, trade
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secret technology. It explicitly prohibits Huawei from photographing or otherwise otherwise trying to
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capture the likeness or design of the robot or test facilities, and from copying computer programs
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or source code. In exchange for signing this document, document, T-Mobile allowed allowed Huawei employees
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access to the robot testing facilities.
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40.
In 2013, T-Mobile T-Mobile assumed assumed MetroPCS MetroPCS Wireless, Wireless, Inc.’s Inc.’s rights rights and obligations obligations
22
under a Supply Agreement with Huawei (the “MetroPCS “MetroPCS Agreement”). Agreement”). This contract contract also
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contains provisions restricting the use and disclosure of the parties’ confidential trade secrets. Huawei’s Theft of Trade Secrets
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41.
In late late 2012 2012,, T-Mobil T-Mobilee set up up a testi testing ng labor laborato atory ry for for the the purpo purpose se of of testin testing g
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handsets, handsets, including those manufactured manufactured by Huawei. Huawei Huawei employees were given limited limited
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access to this lab after Huawei signed each of the confidentiality contracts described above. COMPLAINT FOR VIOLATION OF UNIFORM TRADE SECRETS ACT, BREACH OF CONTRACT, INTERFERENCE WITH BUSINESS EXPECTANCY, AND VIOLATION OF WASHINGTON CONSUMER PROTECTION ACT - 9
KIPLING L AW GROUP PLLC 3601F 3601F REMONT AVE N, SUITE 414 SEATTLE, W ASHINGTON 98103 telephone (206) 545-0345 fax (206) 545-0350
Case 2:14-cv-01351 Document 1 Filed 09/02/14 Page 10 of 22
1
42.
In the testing testing laboratory, laboratory, Huawei Huawei employees employees were allowed allowed to perform perform and monitor monitor
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diagnostic tests for Huawei T-Mobile handsets using T-Mobile’s proprietary testing robot.
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Huawei employees were also given access to the test results for Huawei devices.
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H uawei’ uawei’ s I nquir y I nto Non-Publi Non-Publi c Aspe Aspect ctss of the Robo Robot’ t’ s Specificat pecifications ions
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43.
On seve several ral occasio occasions ns in in 2012 2012 and and contin continuin uing g to 2013, 2013, Huawe Huaweii employ employees ees asked asked
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T-Mobile personnel detailed questions about the testing robot. These questions frequently
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concerned concerned the conductive conductive tip on the end of the “end effector” – a metal plate that affixes affixes to the
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bottom of o f the robot arm. Indeed, as time went on Huawei’s questions became more pointed and
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intrusive intrusive about the exact operational operational details of the robot. T-Mobile T-Mobile personnel personnel did not provide
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answers to these questions about T-Mobile’s proprietary technology. 44.
Huawei Huawei eventually eventually acknowledged acknowledged that T-Mobile T-Mobile was unwilling unwilling to respond respond to
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Huawei’s sensitive questions about the operation and specifications of the robot and related
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technology. technology. Undeterred, Undeterred, Huawei continued continued to seek this information information even though it was clear T-
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Mobile was unwilling to share it.
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Prohi bited bited Photographing Photographing of the Robot Robot
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45.
In early early May of of 2013, 2013, Huawe Huaweii employ employee ee Yu (Frank) (Frank) Wang Wang arriv arrived ed in in Bellev Bellevue. ue.
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Mr. Wang was a member of Huawei’s Test Systems Research and Development Team in China
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and had never before been to T-Mobile’s T-Mobile’s facilities. facilities. The true purpose of his trip – which was not
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disclosed to T-Mobile – was to learn more about T-Mobile’s robot so that Huawei could make
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improvements to and develop its own robot.
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46.
On May May 13, 13, 2013, 2013, two two Huawe Huaweii employ employees ees – Huawei Huawei lead lead enginee engineerr Xinfu Xinfu (Adam) (Adam)
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Xiong and Helen Lijingru Lijingru – brought brought Mr. Wang into the T-Mobile T-Mobile testing lab with them without
23
T-Mobile’s T-Mobile’s consent. consent. The Huawei employees employees were told that Mr. Wang was not allowed to be in
24
the lab because he did not have authorizatio authorization. n. Mr. Wang left the lab at T-Mobile’s T-Mobile’s repeated repeated
25
insistence.
26
47.
27
Neithe Neitherr Mr. Mr. Xiong Xiong nor nor Ms. Ms. Lijin Lijingru gru was was allow allowed ed to give give other other Huawei Huawei employ employees ees
(or anyone else) access access to the lab. Only authorized authorized T-Mobile T-Mobile personnel personnel are allowed to do so. COMPLAINT FOR VIOLATION OF UNIFORM TRADE SECRETS ACT, BREACH OF CONTRACT, INTERFERENCE WITH BUSINESS EXPECTANCY, AND VIOLATION OF WASHINGTON CONSUMER PROTECTION ACT - 10
KIPLING L AW GROUP PLLC 3601F 3601F REMONT AVE N, SUITE 414 SEATTLE, W ASHINGTON 98103 telephone (206) 545-0345 fax (206) 545-0350
Case 2:14-cv-01351 Document 1 Filed 09/02/14 Page 11 of 22
48.
1
Noneth Nonethele eless, ss, on May May 14, 14, 2013, 2013, one one day after after Mr. Mr. Wang Wang had just just been been told told he he
2
could not enter the lab, Mr. Xiong and Ms. Lijingru Lijingru secretly escorted escorted Mr. Wang into the T-
3
Mobile testing testing lab to photograph photograph the testing robot. Using a smartphone, smartphone, Mr. Wang took at least
4
seven photographs of the testing robot, in violation of the Clean Room Letter’s explicit
5
prohibition on photography in the lab. 49.
6
When When Mr. Mr. Wang’s Wang’s unauthor unauthorized ized presen presence ce in the the lab lab was discove discovered red by T-Mobi T-Mobile, le,
7
Mr. Wang was immediately immediately asked to leave. Ms. Lijingru Lijingru claimed claimed that Mr. Wang had been
8
authorized authorized by T-Mobile T-Mobile to enter the lab that day. In fact, he had never received authorizatio authorization. n. 50.
9 10
That That night night,, Mr. Mr. Wang Wang forw forward arded ed the the photo photogra graphs phs he he had had taken taken of of the the robot robot to to
Huawei’s R&D team in China. 51.
11
As a result result of this this incident, incident, furthe furtherr restri restrictions ctions were placed on Huawei’ Huawei’ss access access to
12
T-Mobile T-Mobile facilities. facilities. As of May 15, 2013, T-Mobile T-Mobile allowed only one Huawei employee access
13
to the lab. Huawei selected selected its lead engineer, engineer, Mr. Xiong, to be the one employee employee who had access
14
to the testing chamber. chamber. Mr. Xiong was required required to sign in at the security security desk and be escorted escorted to
15
the testing testing chamber by a T-Mobile T-Mobile employee. employee. His activities activities were recorded recorded by a camera in the
16
lab.
17
52.
Huawei Huawei Human Resources Resources Director Director Jennifer Jennifer Ponder provided provided T-Mobile T-Mobile with only
18
four of the seven photographs photographs taken by Mr. Wang. Ms. Ponder claimed claimed the other three were
19
blurry and that Mr. Wang deleted them.
20
53.
21
scheduled.
Barred Barred from from T-Mob T-Mobile ile’s ’s lab, lab, Mr. Wang then then retur returned ned to to China China earl earlier ier than
22
Th eft and M easur asur ement ment of the “E nd Ef fector” fector” Robot Robot Part Part
23
54.
24 25
On May May 29, 29, 2013, 2013, Mr. Mr. Xiong Xiong was was provi provided ded four four end end effec effector torss for for testin testing g purpos purposes es
in T-Mobile’s testing lab. 55.
While While alone alone in the the lab, lab, Mr. Mr. Xiong Xiong atte attempt mpted ed to hide hide one one of these these end end effecto effectors rs out out
26
of the view of the security camera behind behind a computer computer monitor. monitor. Three hours later, later, while glancing glancing
27
repeatedly repeatedly at the security camera, camera, Mr. Xiong moved the end effector from behind the monitor monitor COMPLAINT FOR VIOLATION OF UNIFORM TRADE SECRETS ACT, BREACH OF CONTRACT, INTERFERENCE WITH BUSINESS EXPECTANCY, AND VIOLATION OF WASHINGTON CONSUMER PROTECTION ACT - 11
KIPLING L AW GROUP PLLC 3601F 3601F REMONT AVE N, SUITE 414 SEATTLE, W ASHINGTON 98103 telephone (206) 545-0345 fax (206) 545-0350
Case 2:14-cv-01351 Document 1 Filed 09/02/14 Page 12 of 22
1
and slipped it into his laptop laptop bag. Mr. Xiong then carried carried the laptop bag out of the testing
2
chamber. 56.
3
Shortly Shortly after Mr. Xiong departed, departed, the missing missing end effector effector was immediately immediately
4
noticed noticed by T-Mobile and Mr. Xiong was called. Despite Despite having just taken the end effector from from
5
the lab only nine minutes earlier, earlier, Mr. Xiong denied knowing knowing where it was. Roughly an hour
6
later, later, Mr. Xiong sent a text message message claiming to have “found” the end effector effector in his laptop bag.
7
Mr. Xiong eventually eventually admitted that he lied when he said he did not know where the end effector
8
was.
9
57.
Mr. Xiong Xiong took took the the end end effec effector tor to Huawe Huaweii Device Device USA’ USA’ss offic offices es and and used used it to
10
provide measurements to Huawei China’s R&D division during a conference call. Mr. Xiong
11
later admitted admitted he took the end effector effector because Huawei China wanted to know the size of the
12
finger finger and the tip and the material out of which the tip is made and that Huawei R&D believed believed
13
this information would allow its own robot to perform as well as T-Mobile’s robot.
14
58.
Huawei Huawei R&D instructed instructed Mr. Xiong to retrieve retrieve this information information about T-Mobile’s T-Mobile’s
15
robot finger finger and tip. Mr. Xiong admitted admitted that this was a matter of great urgency for Huawei. Huawei.
16
Mr. Xiong admitted admitted that he needed to have the end effector with with him for the conference call
17
because he h e anticipated Huawei R&D R &D would have many questions qu estions about it.
18 19 20
59.
Mr. Xiong, Xiong, in fact, disclosed disclosed informatio information n regarding regarding the stolen stolen eend nd effector effector to
Huawei R&D. 60.
Mr. Xiong Xiong was was not not author authorize ized d to take take or or measu measure re the the end effecto effectorr by anyone anyone at at T-
21
Mobile. Mobile. His theft theft and measurement measurement of the part were prohibite prohibited d by the parties’ contracts contracts.. Huawei
22
nonetheless instructed him to steal the part so that it could benefit by further refining and
23
developing its robot using stolen T-Mobile technology.
24 25 26 27 COMPLAINT FOR VIOLATION OF UNIFORM TRADE SECRETS ACT, BREACH OF CONTRACT, INTERFERENCE WITH BUSINESS EXPECTANCY, AND VIOLATION OF WASHINGTON CONSUMER PROTECTION ACT - 12
KIPLING L AW GROUP PLLC 3601F 3601F REMONT AVE N, SUITE 414 SEATTLE, W ASHINGTON 98103 telephone (206) 545-0345 fax (206) 545-0350
Case 2:14-cv-01351 Document 1 Filed 09/02/14 Page 13 of 22
1
Th eft of Seque Sequence nce F il es Operati Operati ng Software Software
2
61.
Sequenc Sequencee file filess contr control ol the the move movemen ments ts of of the the propr propriet ietary ary testing testing robot. robot. These These
3
files, which are themselves proprietary trade secrets, are present on the computers in the testing
4
lab.
5
62.
On information information and belief, belief, Huawei employees employees accessed accessed and sent proprietary proprietary
6
sequencing sequencing files via email to others at Huawei. Huawei. They were explicitly explicitly forbidden forbidden from doing so by
7
T-Mobile.
8
Att empt to Re-A Re-A ctivate Secur it y Badge
9
63.
In resp respons onsee to the inciden incidents ts of of theft theft descri described bed above above,, T-Mob T-Mobile ile took took away away
10
Huawei’s Huawei’s security access access to the lab and recalled recalled Huawei’s security security badges. T-Mobile T-Mobile informed informed
11
Huawei Huawei that its employees were only allowed on T-Mobile’s T-Mobile’s campus as visitors and had to be
12
escorted to the testing facility by someone with security clearance.
13
64.
Despite Despite these sanctions sanctions from T-Mobile, T-Mobile, and Huawei’s Huawei’s repeated repeated claims that it
14
would train its employees to respect security and confidentiality protocols, a Huawei vendor
15
attempted to re-activate a security badge (which should have been returned or destroyed) at T-
16
Mobile’s Mobile’s badge station station on October October 23, 2013. The vendor attempted attempted to use this badge to access
17
restricted areas of T-Mobile’s facility.
18
H uawei’ uawei’ s Attempt Attemptss to Copy Copy T-M obil obil e’ s Robot Robot
19
65.
20 21
Huawei’s Huawei’s efforts efforts to steal T-Mobile’s T-Mobile’s robot technology technology were motivated motivated by
Huawei’s desire to develop and improve its own testing robot. 66.
In early early 2013, 2013, Mr. Mr. Xiong Xiong conta contacte cted d a dealer dealer of of robot robot part partss that that was was a T-Mobi T-Mobile le
22
supplier. supplier. Mr. Xiong asked the dealer if it could build Huawei Huawei a testing testing robot platform platform in the T-
23
Mobile configuration.
24
67.
In a May 30, 2013 2013 phone phone call call with with a T-Mobi T-Mobile le emplo employee yee,, Huawei Huawei repres representa entativ tivee
25
Sacha Wu admitted admitted that the reason Huawei personnel asked questions questions about the robot and took
26
pictures of it was so that Huawei could build its own robot.
27 COMPLAINT FOR VIOLATION OF UNIFORM TRADE SECRETS ACT, BREACH OF CONTRACT, INTERFERENCE WITH BUSINESS EXPECTANCY, AND VIOLATION OF WASHINGTON CONSUMER PROTECTION ACT - 13
KIPLING L AW GROUP PLLC 3601F 3601F REMONT AVE N, SUITE 414 SEATTLE, W ASHINGTON 98103 telephone (206) 545-0345 fax (206) 545-0350
Case 2:14-cv-01351 Document 1 Filed 09/02/14 Page 14 of 22
1
68.
In a June June 3, 3, 2013 2013 meet meeting ing with with T-Mob T-Mobile ile employe employees, es, Huawei Huawei Device Device USA
2
Executive Vice President Michael Chang stated that Mr. Wang took the photographs and Mr.
3
Xiong removed removed the end effector so that Huawei could build its own robot.
4
69.
In a June 12, 2013 2013 inte intervi rview, ew, Mr. Xiong Xiong stat stated ed that that Mr. Mr. Wang Wang took took photog photograp raphs hs
5
of the robot because Huawei headquarters headquarters in China could not reproduce results from the T-
6
Mobile robot robot in its own lab. Mr. Xiong stated stated that Huawei needed information information regarding regarding the
7
correct times, force, and duration for T-Mobile’s robot – the number of times the “finger”
8
touches touches the device, the force of the pressure applied, applied, and the duration of that pressure. pressure.
9
70.
In that that same same inte intervi rview, ew, Mr. Mr. Xiong Xiong stat stated ed that that he took took the the end end effec effector tor from from TT-
10
Mobile’s testing chamber because Huawei headquarters needed to know the size of the
11
conductive conductive tip and the material material out of which it is made, along with the size of the “finger” “finger” – the
12
post on which the tip resides. Mr. Xiong stated that he provided seven measurements of the
13
finger and the tip to Huawei headquarters.
14
71.
In a June 17, 2013 2013 inte intervi rview, ew, Mr. Wang stated stated that that he took took photogr photographs aphs of the the T-
15
Mobile robot and sent them to the Huawei “X-Device “X-Device Robot Team” in China because because Huawei
16
tests could not reproduce reproduce T-Mobile tests. tests. Mr. Wang further stated stated that the X-Device X-Device Robot
17
Team wanted to understand more about the size of the robot hand and its material. material.
18 19
72.
Huawei Huawei R&D knew knew T-Mobi T-Mobile le was was clos closely ely guar guarding ding the informa informatio tion n about about the the
robot, but it encouraged Huawei employees to steal the information anyway. Huawei’s Pattern of Misconduct in the United States
20 21
73.
As described described below, Huawei’s Huawei’s pattern pattern of misconduct misconduct with T-Mobile T-Mobile and others
22
demonstrates a substantial likelihood that this behavior will continue to pose substantial risks to
23
T-Mobile T-Mobile and other companies companies in the future. This is to the detriment of consumers, consumers, and thus
24
implicates the public interest interest under the Washington Consumer Protection Protection Act. Huawei’s past,
25
present, and expected future pattern of unfair, un fair, unlawful, and deceptive d eceptive conduct is therefore
26
relevant in this action.
27 COMPLAINT FOR VIOLATION OF UNIFORM TRADE SECRETS ACT, BREACH OF CONTRACT, INTERFERENCE WITH BUSINESS EXPECTANCY, AND VIOLATION OF WASHINGTON CONSUMER PROTECTION ACT - 14
KIPLING L AW GROUP PLLC 3601F 3601F REMONT AVE N, SUITE 414 SEATTLE, W ASHINGTON 98103 telephone (206) 545-0345 fax (206) 545-0350
Case 2:14-cv-01351 Document 1 Filed 09/02/14 Page 15 of 22
1
74.
Huawei Huawei has a documented documented history history of violating violating security security and confidentia confidentiality lity
2
protocols in order to steal technology technolog y or obtain other o ther competitive advantages. Huawei has
3
consistently demonstrated a disregard for the intellectual property rights of others, which is
4
followed by denial and uncooperativeness in the face of obvious violations.
5 6
75.
This history history creates creates a substantial substantial risk that Huawei’s Huawei’s misconduct misconduct against against T-Mobil T-Mobilee
will be repeated against other entities.
7
Congr ession al I nves nvestigati on
8
76.
9
In Novemb November er 2011 2011,, the the U.S. U.S. Hous Housee of Repres Representa entativ tives es Perm Permane anent nt Sele Select ct
Committee on Intelligence initiated an investigation into the security threat and intellectual
10
property risks posed by b y Huawei, concluding that Huawei “exhibits “ex hibits a pattern of disregard for the
11
intellectual property rights of other entities and companies in the United States.”
12
M isappropriation isappropriation of Ci sco Source Source Code Code
13
77.
After After Cisco sued Huawei in 2003 for misappropr misappropriating iating its source source code, Huawei
14
eventually admitted that some of its code came from an unauthorized source and pulled certain
15
products off the market. ma rket.
16
78.
In 2012 2012,, Huawei Huawei deni denied ed any wrongdo wrongdoing ing,, which which in turn turn prom prompte pted d Cisco Cisco to releas releasee
17
sections sections of the “Neutral “Neutral Expert’s Final Source Source Code Report.” Report.” Among the Neutral Expert’s Expert’s
18
findings: findings: “It must be concluded that Huawei misappropria misappropriated ted this code.” VI. VI.
19
(Violation of Washington Uniform Trade Secrets Act Against Huawei China and Huawei USA)
20 21 22 23 24 25 26 27
FIRST IRST CAU CAUSE OF ACTI ACTION ON
79.
T-Mo T-Mobi bile le re-a re-all lleg eges es each each and and every every alle allega gati tion on in parag paragra raph phss 1 thro throug ugh h 72 as
though fully set forth herein. 80.
The trad tradee secret secretss owned owned by T-Mobi T-Mobile le and and imprope improperly rly acquir acquired ed by Huaw Huawei ei inclu include de
information and know-how relating to the design, assembly, and operating methods of the TMobile testing robot – including specifications, source code, component selection, and operating instructions – as well as other non-public elements of the robot technology, and proprietary COMPLAINT FOR VIOLATION OF UNIFORM TRADE SECRETS ACT, BREACH OF CONTRACT, INTERFERENCE WITH BUSINESS EXPECTANCY, AND VIOLATION OF WASHINGTON CONSUMER PROTECTION ACT - 15
KIPLING L AW GROUP PLLC 3601F 3601F REMONT AVE N, SUITE 414 SEATTLE, W ASHINGTON 98103 telephone (206) 545-0345 fax (206) 545-0350
Case 2:14-cv-01351 Document 1 Filed 09/02/14 Page 16 of 22
1
combinations combinations and implementat implementations ions of the robot. These trade trade secrets derive derive independent independent value
2
from their secrecy and T-Mobile has taken reasonable efforts to maintain their secrecy.
3
81.
Huawei Huawei improperly improperly acquired acquired T-Mobile’s T-Mobile’s trade secrets secrets through, through, among other
4
things, providing unauthorized access to the T-Mobile testing lab, stealing an end effector,
5
copying and recording non-public parts and materials specifications, taking prohibited
6
photographs of the robot, and stealing source code. These actions violate several explicit
7
provisions of the Supply S upply Agreement, the NDA, and the Clean Room Letter, and other applicable
8
agreements meant to protect T-Mobile’s confidential information.
9
82.
The Huawei employees employees who improperly improperly acquired acquired T-Mobile’s T-Mobile’s trade secrets secrets
10
disclosed these trade secrets to other employees at Huawei, including the development team
11
involved involved in Huawei’s Huawei’s efforts efforts to build its own testing robot. robot. At all times, those employees were
12
acting within within the scope of their employment employment for Huawei. Huawei. Huawei used T-Mobile’s T-Mobile’s confidential confidential
13
information to build and improve its own robot based on T-Mobile’s technology.
14
83.
Huawei Huawei has used the robot technology technology it misappropri misappropriated ated from T-Mobile T-Mobile to
15
unjustly gain a commercial advantage worth hundreds of millions of dollars through, among
16
other things, superior device performance and reliability, reduced return costs, faster testing
17
times, times, and saved development development costs. On information information and belief, Huawei bears the costs of
18
device returns returns in its agreements agreements with carriers. carriers. On information information and belief, Huawei has used T-
19
Mobile’s technology to test devices supplied to carriers other than T-Mobile. T-Mobile is
20
entitled to damages for Huawei’s unjust enrichment.
21
84.
T-Mobile T-Mobile has vigilantly vigilantly guarded guarded its its trade trade secrets secrets related related to to the the testing testing robot
22
through procedures such as nondisclosure agreements and security controls for suppliers given
23
access to the robot. With respect respect to Huawei, specifically, specifically, T-Mobile T-Mobile denied access to its testing
24
chamber chamber to all but one Huawei employee employee after Mr. Wang was caught on camera taking
25
photographs of the robot. T-Mobile has declined to license or sell the robot.
26 27
85.
T-Mobile’s T-Mobile’s robot technology technology is of substantial substantial economic value that would be lost lost if
T-Mobile’s T-Mobile’s trade trade secrets were disclosed disclosed to the public. The testing robot has given T-Mobile T-Mobile a COMPLAINT FOR VIOLATION OF UNIFORM TRADE SECRETS ACT, BREACH OF CONTRACT, INTERFERENCE WITH BUSINESS EXPECTANCY, AND VIOLATION OF WASHINGTON CONSUMER PROTECTION ACT - 16
KIPLING L AW GROUP PLLC 3601F 3601F REMONT AVE N, SUITE 414 SEATTLE, W ASHINGTON 98103 telephone (206) 545-0345 fax (206) 545-0350
Case 2:14-cv-01351 Document 1 Filed 09/02/14 Page 17 of 22
1
competitive advantage by improving the performance and reliability of its devices and lowering
2
return-rel return-related ated costs, leading to increased profitability profitability.. This advantage would be lost if the
3
technology were available to T-Mobile’s competitors or to handset suppliers who work with T-
4
Mobile’s competitors. Huawei’s own efforts to misappropriate the robot technology are
5
evidence of its economic value, as are the repeated inquiries by third parties to license the
6
technology and the widespread industry interest the robot has generated.
7
86.
T-Mobile T-Mobile has incurred incurred substantial substantial costs as a proximate proximate result result of Huawei’s Huawei’s
8
misappropriation of its trade secrets and is entitled to damages, including but not limited to those
9
relating to security costs, investigation costs, investment in testing and marketing Huawei
10
devices, costs of replacing Huawei as a supplier, increased costs for replacement supplies, and
11
loss of the economic value T-Mobile derives from exclusive use of its proprietary technology.
12
87.
In addition addition to damages, damages, T-Mobi T-Mobile le is entitled entitled to injunctive injunctive relief relief enjoining enjoining
13
Huawei’s continued misappropriation of T-Mobile’s robot technology. If the Court determines determines
14
that it would be unreasonable to prohibit Huawei’s future use of the technology, such future use
15
should be conditioned upon payment of a reasonable royalty to T-Mobile.
16
88.
Huawei’s Huawei’s misappropri misappropriation ation of T-Mobile’s T-Mobile’s trade secrets secrets is willful willful and malicious, malicious,
17
and continued even after T-Mobile discovered Huawei’s misconduct and imposed additional
18
security measures. VII. VII.
19
(Breach of Contract against Huawei China and Huawei USA)
20 21 22 23
SECO SE COND ND CAUS CAUSE E OF ACTI ACTION ON
89.
T-Mobil T-Mobilee re-al re-alleg leges es each each and and every every allega allegatio tion n in para paragra graphs phs 1 throug through h 72 as as
though fully set forth herein. 90.
The Supply Supply Agreem Agreement ent,, NDA, NDA, Clea Clean n Room Room Lett Letter, er, and other other appl applica icable ble
24
agreements (such as the MetroPCS Agreement) between the parties are valid and enforceable
25
contracts, according to which T-Mobile has performed all conditions, covenants, and promises.
26 27
91.
Huawei Huawei Device Device USA USA is is a sign signato atory ry to to the Supply Supply Agree Agreemen ment, t, NDA, NDA, Clean Clean Room Room
Letter, and other applicable agreements between the parties and subject to their terms. COMPLAINT FOR VIOLATION OF UNIFORM TRADE SECRETS ACT, BREACH OF CONTRACT, INTERFERENCE WITH BUSINESS EXPECTANCY, AND VIOLATION OF WASHINGTON CONSUMER PROTECTION ACT - 17
KIPLING L AW GROUP PLLC 3601F 3601F REMONT AVE N, SUITE 414 SEATTLE, W ASHINGTON 98103 telephone (206) 545-0345 fax (206) 545-0350
Case 2:14-cv-01351 Document 1 Filed 09/02/14 Page 18 of 22
1
92.
Huawei Huawei China China is sub subjec jectt to to the terms terms of the NDA. NDA.
2
93.
Huawei Huawei is is liable under the terms of the contracts contracts for breaches breaches committed committed by its its
3
employees.
4
94.
Throug Through h the acts acts descr describe ibed d above, above, Huawei Huawei USA USA has has mater material ially ly breac breached hed the the
5
Supply Agreement and other applicable agreements between the parties, including
6
confidentiality provisions, which protect, among other things, T-Mobile’s proprietary
7
information, intellectual property, and trade secrets.
8 9
95.
Throug Through h the acts acts descr describe ibed d above, above, Huawei Huawei has has mater material ially ly breac breached hed the the NDA, NDA,
including section 3 and section 5, which protects from disclosure, and limits the use of, T-
10
Mobile’s confidential information. information. The NDA authorizes the use of T-Mobile’s Confidential
11
Information “only for the purpose of accomplishing the handset testing protocol” and states that
12
Huawei “shall not use or exploit such Confidential Information for any other purpose without the
13
prior written consent” of T-Mobile. The NDA specifically prohibits Huawei from attempting to
14
“capture photographs” or “reverse engineer, decompile, dissemble or reverse translate” the robot,
15
and from “attempt[ing] to discover the source code or trade secrets in any such Confidential
16
Information . . . .”
17
96.
18 19
T-Mobile T-Mobile is entitled entitled to consequentia consequentiall damages damages for Huawei’s Huawei’s willful willful misconduct misconduct
and breach of confidentiality. 97.
T-Mobile T-Mobile has incurred incurred substantial substantial costs as a proxima proximate te result result of Huawei’s Huawei’s breach
20
of its material obligations under such contracts and is entitled to damages, including but not
21
limited to those relating to security costs, investigation costs, investment in testing and marketing
22
Huawei devices, costs of finding a replacement supplier, increased costs for replacement
23
supplies, and loss of the economic value T-Mobile derives from exclusive use of its proprietary
24
technology.
25 26 27 COMPLAINT FOR VIOLATION OF UNIFORM TRADE SECRETS ACT, BREACH OF CONTRACT, INTERFERENCE WITH BUSINESS EXPECTANCY, AND VIOLATION OF WASHINGTON CONSUMER PROTECTION ACT - 18
KIPLING L AW GROUP PLLC 3601F 3601F REMONT AVE N, SUITE 414 SEATTLE, W ASHINGTON 98103 telephone (206) 545-0345 fax (206) 545-0350
Case 2:14-cv-01351 Document 1 Filed 09/02/14 Page 19 of 22
VIII VIII..
1
(Interference (Interference with Business Expectancy and Contractual Contractual Relationship against Huawei China)
2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
THIR TH IRD D CAUS CAUSE E OF ACTI ACTION ON
98.
T-Mobil T-Mobilee re-al re-alleg leges es each each and and every every allega allegatio tion n in para paragra graphs phs 1 throug through h 72 as as
though fully set forth herein. 99.
Huawei Huawei China knew about the handset handset supply relationship relationship between between Huawei USA
and T-Mobile, T-Mobile, as well as the terms terms of the Supply Agreement, Agreement, the Clean Room Letter, Letter, and other applicable agreements. 100.
Huawei Huawei China China induced induced and purpose purposely ly caused caused Huawei Huawei USA USA to breach its materi material al
obligations related to T-Mobile’s confidential information under the applicable agreements. Huawei China took advantage of Huawei USA’s access to T-Mobile’s trade secrets to build its own testing robot based on those trade secrets; on information and belief, it has used the testing robot on devices sold to other carriers by Huawei China and other Huawei entities. 101.
Huawei Huawei China China sent its employe employee, e, Mr. Wang, to the United United States States to steal trade
secrets from T-Mobile. T-Mobile. Huawei China instructed Huawei USA USA to assist Mr. Wang Wang in his attempt to steal trade secrets from T-Mobile, in violation of Huawei USA’s confidentiality and nondisclosure obligations. 102.
Mr. Wang Wang disclos disclosed ed the confidentia confidentiall informat information ion he wrongf wrongfully ully acquire acquired d from the
T-Mobile T-Mobile testing chamber to a Huawei China R&D team. 103.
Huawei Huawei China China instructe instructed d Mr. Xiong to misappropr misappropriate iate T-Mobi T-Mobile’s le’s confidential confidential
informatio information. n. Specifically Specifically,, it asked Mr. Xiong to steal an end effector and report measurement measurementss to Huawei Huawei China’s R&D team. As instructed, instructed, Mr. Xiong provided the information information he misappropriated to employees of Huawei China. 104.
Employees Employees of both Huawei China and Huawei Huawei USA have repeate repeatedly dly explaine explained d
that the purpose of these acts of misappropriation was to facilitate Huawei China’s efforts to build its own testing robot.
27 COMPLAINT FOR VIOLATION OF UNIFORM TRADE SECRETS ACT, BREACH OF CONTRACT, INTERFERENCE WITH BUSINESS EXPECTANCY, AND VIOLATION OF WASHINGTON CONSUMER PROTECTION ACT - 19
KIPLING L AW GROUP PLLC 3601F 3601F REMONT AVE N, SUITE 414 SEATTLE, W ASHINGTON 98103 telephone (206) 545-0345 fax (206) 545-0350
Case 2:14-cv-01351 Document 1 Filed 09/02/14 Page 20 of 22
1 2 3
105.
Huawei Huawei China China induced induced Huawei Huawei USA’s USA’s breach breach of its materi material al obligati obligations ons under under the the
applicable agreements through improper means, including various illegal acts. 106.
As a proximate proximate consequ consequence ence of of the Huawei USA breache breachess induced induced by Huawei Huawei
4
China, T-Mobile has incurred substantial costs and is entitled to damages, including but not
5
limited to those relating to security costs, investigation costs, investment in testing and marketing
6
Huawei devices, costs of finding a replacement supplier, increased costs for replacement
7
supplies, and loss of the economic value T-Mobile derives from exclusive use of its proprietary
8
technology. IX. IX.
9
(Violation (Violation of Washington Washington Consumer Consumer Protection Protection Act against Huawei China and Huawei USA)
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
FOUR OURTH CAUSE AUSE OF ACTIO CTION N
107.
T-Mobile T-Mobile re-alleges re-alleges each and and every every allegati allegation on in paragraphs paragraphs 1 through through 78 78 as
though fully set forth herein. 108.
Through Through the acts described described above, above, Huawei Huawei has engaged engaged in unfair unfair practices practices in
violation of the public interest by stealing the technology of its business partner T-Mobile in violation violation of a nondisclosur nondisclosuree agreement. Separately, Separately, Huawei’s Huawei’s conduct has the capacity capacity to deceive a substantial portion of the public by passing off T-Mobile’s testing technology as its own and attributing improvements to its devices to its own efforts rather than T-Mobile’s R&D. 109.
Huawei’s Huawei’s misconduc misconduct, t, as describe described d above, affects affects the public public interest interest by virtue virtue of a
real and substantial potential for repetition of the unfair and deceptive acts it has committed against against T-Mobile. The likelihood likelihood that additional plaintiffs plaintiffs have been or will be injured in the same fashion T-Mobile has been injured is exceptionally high given Huawei’s documented history of violating the the intellectual property rights of U.S. companies. The public’s interest in in preventing Huawei’s misconduct is also evidenced evidence d by b y the fact that Huawei actively solicited TMobile’s business through participation in T-Mobile’s Request for Proposal process in which numerous domestic and international companies competed with Huawei to supply handsets through through T-Mobile to the public at large. Moreover, Moreover, Huawei advertises advertises to the general general public. COMPLAINT FOR VIOLATION OF UNIFORM TRADE SECRETS ACT, BREACH OF CONTRACT, INTERFERENCE WITH BUSINESS EXPECTANCY, AND VIOLATION OF WASHINGTON CONSUMER PROTECTION ACT - 20
KIPLING L AW GROUP PLLC 3601F 3601F REMONT AVE N, SUITE 414 SEATTLE, W ASHINGTON 98103 telephone (206) 545-0345 fax (206) 545-0350
Case 2:14-cv-01351 Document 1 Filed 09/02/14 Page 21 of 22
110.
1
T-Mobile’s T-Mobile’s property property interes interests ts have have been injured injured in numerou numerouss ways as a result result of
2
Huawei’s unfair and deceptive acts. These injuries include, for instance, added security costs,
3
investigation costs, investment in testing and marketing Huawei devices, costs of replacing
4
Huawei as a supplier, increased costs for replacement supplies, and loss of the economic value
5
T-Mobile derives from exclusive use of its proprietary technology. 111.
6 7
But for Huawei’s Huawei’s unfair unfair and deceptive deceptive practices, practices, T-Mobile T-Mobile would would not have have
suffered these injuries. X.
8
PRAYER FOR RELIEF
WHEREFORE, T-Mobile prays for judgment as follows:
9
A.
10
On the the Firs Firstt Cause Cause of Acti Action, on, damages damages in the the amoun amountt of T-Mobi T-Mobile’ le’ss actua actuall losse lossess
11
and Huawei’s unjust enrichment; exemplary damages amounting to twice the sum of actual
12
losses and unjust enrichment for willful and malicious misappropriation; and injunctive relief or
13
a reasonable royalty; B.
14 15
On the Second Second Cause Cause of Acti Action, on, for damages damages in an amou amount nt to be be prov proven en at tria trial, l,
including expectation damages, consequential damages, and incidental damages;
16
C.
On the Third Third Cause Cause of Action, Action, for damages damages in an amoun amountt to to be be prov proven en at trial; trial;
17
D.
On the Fourth Fourth Cause Cause of of Acti Action, on, for actual actual damages damages and treble treble damages damages in an an
18
amount up to the statutory statutory maximum in addition addition to actual damages; damages; E.
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For injunc injunctiv tivee relief relief enjoini enjoining ng Huawei’ Huawei’ss continu continued ed misapp misapprop ropria riatio tion n and
20
exploitation of T-Mobile’s confidential information, trade secrets, and otherwise protected
21
technology;
22
F.
For For reas reasona onabl blee atto attorn rney ey fees fees and and cost costs; s;
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G.
For pre-ju pre-judgme dgment nt intere interest st on all damage damages; s; and
24
H.
For such such other other relief relief as the Court Court deems deems just just and proper proper..
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///
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/// COMPLAINT FOR VIOLATION OF UNIFORM TRADE SECRETS ACT, BREACH OF CONTRACT, INTERFERENCE WITH BUSINESS EXPECTANCY, AND VIOLATION OF WASHINGTON CONSUMER PROTECTION ACT - 21
KIPLING L AW GROUP PLLC 3601F 3601F REMONT AVE N, SUITE 414 SEATTLE, W ASHINGTON 98103 telephone (206) 545-0345 fax (206) 545-0350
Case 2:14-cv-01351 Document 1 Filed 09/02/14 Page 22 of 22
1
DATED this 2nd day of September, 2014.
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s/ Michael E. Kipling Michael E. Kipling, WSBA #7677
[email protected] s/ Marjorie A. Walter Marjorie A. Walter, WSBA #40078
[email protected] IPLING LAW GROUP PLLC K IPLING 3601 Fremont Avenue N., Suite 414 Seattle, WA 98103 (206) 545-0345 (206) 545-0350 (fax)
10 11 12 13 14 15 16 17
John Hueston ( Pro Hac Pro Hac Vice pending)
[email protected] Alison Plessman ( Pro Hac Pro Hac Vice pending)
[email protected] ac Vice pending) Eric Hayden ( Pro H ac
[email protected] IRELL & MANELLA LLP 1800 Avenue of the Stars, Suite 900 Los Angeles, CA 90067-4276 (310) 277-1010 (310) 203-7199 (fax) Couns Counse el for Plaintiff T -M obil obil e USA, I nc.
18 19 20 21 22 23 24 25 26 27 COMPLAINT FOR VIOLATION OF UNIFORM TRADE SECRETS ACT, BREACH OF CONTRACT, INTERFERENCE WITH BUSINESS EXPECTANCY, AND VIOLATION OF WASHINGTON CONSUMER PROTECTION ACT - 22
KIPLING L AW GROUP PLLC 3601F 3601F REMONT AVE N, SUITE 414 SEATTLE, W ASHINGTON 98103 telephone (206) 545-0345 fax (206) 545-0350
