T-Mobile USA, Inc. v. Huawei Device USA, Inc.

115 F. Supp. 3d 1184, 2015 U.S. Dist. LEXIS 91495, 2015 WL 4308682
CourtDistrict Court, W.D. Washington
DecidedJuly 14, 2015
DocketNo. C14-1351RAJ
StatusPublished
Cited by19 cases

This text of 115 F. Supp. 3d 1184 (T-Mobile USA, Inc. v. Huawei Device USA, Inc.) is published on Counsel Stack Legal Research, covering District Court, W.D. Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
T-Mobile USA, Inc. v. Huawei Device USA, Inc., 115 F. Supp. 3d 1184, 2015 U.S. Dist. LEXIS 91495, 2015 WL 4308682 (W.D. Wash. 2015).

Opinion

ORDER

RICHARD A. JONES, District Judge.

I. INTRODUCTION

This matter comes before the court on a motion to dismiss from Defendant Huawei [1189]*1189Device USA, Inc. (“Huawei USA”) and a motion to dismiss from its Chinese parent company, Defendant Huawei Technologies Co., Ltd. (“Huawei China”). Although the parties have requested oral argument, the court finds oral argument unnecessary in light of the six extensive briefs before it. For the reasons stated herein, the court GRANTS both motions to dismiss in part and DENIES them in part. Dkt. ## 32, 54.

II. BACKGROUND

The court describes the facts as Plaintiff T-Mobile USA, Inc. (“T-Mobile”). alleges them in its complaint, suggesting no opinion on whether its allegations will prove true. The court cites the numbered paragraphs of the complaint using bare “¶” symbols

T-Mobile, a national mobile phone network provider, contends that Huawei,1 one of many entities that supplies it with mobile phone handsets, has stolen robot technology that T-Mobile uses to test handsets.

T-Mobile maintains a handset testing facility at its offices in Bellevue, Washington offices. ¶34. That facility houses “Tappy,” a robot that T-Mobile designed to test mobile phone handsets. According to T-Mobile, it begin developing Tappy in 2006 and placed Tappy in service in 2007. ¶¶ 8-10. Patents protect some aspects of Tappy’s technology; other aspects are T-Mobile’s closely-guarded trade secrets. ¶10.

T-Mobile first granted Huawei access to the “clean room” that contains Tappy in 2012, so that Huawei could assist with testing its own handsets. ¶¶ 15, 42. Huaw-ei USA (or its corporate predecessor)-has been a T-Mobile handset supplier since it signed a supplier agreement in June 2010. ¶¶24, 35, 36. Before granting Huawei USA access to the clean room, T-Mobile required it to sign both a July 2012 testing non-disclosure agreement and, shortly thereafter, a separate “Clean Room- Letter” with additional security provisions. ¶¶ 37-39. T-Mobile contends that the July 2012 non-disclosure agreement binds Huawei China as well. II38. In addition to contractual confidentiality provisions, T-Mobile limited Huawei’s access to the clean room. It limited' the : number of Huawei employees who could enter the clean room and required all of those employees to obtain security clearances. ¶ 14.

Despite these confidentiality agreements and security measures, Huawei stole confidential information about Tappy so that it could develop a competing, testing robot. It could not have doubted that T-Mobile considered that information confidential, because T-Mobile frequently refused to answer Huawei’s detailed questions about Tappy’s- specifications. ¶¶ 43-44; Those questions often focused on a conductive tip at the end of Tappy’s “end-effector,” which is a metal plate that attaches to the bottom of Tappy’s arm. ¶ 43,

In May 2013, Huawei China employee Yu Wang arrived in Bellevue from China on a mission to acquire confidential information about Tappy. ¶¶ 45,101. He came to T-Mobile’s testing facilities with two other Huawei employees, lead engineer Xinfu Xiong and Helen Lijingru. ¶ 46. Although Mr. Xiong and Ms. Lijingru had permission to be in the clean room, Mr. Wang did not. T-Mobile told them to remove Mr. Wang from the ciean room. ¶46. Mr. Xiong anil Ms. Lijingru nonetheless brought him back the following day, and secretly escorted him into the clean room. ¶ 48, Mr. Wang used his own [1190]*1190phone to take at least 7 photos of Tappy. ¶48. T-Mobile discovered .Mr. Wang’s presence and forced him to leave the facility. ¶ 49. Mr. Wang nonetheless forwarded the photographs to the Huawei China research and development team. ¶ 50, see also ¶ 17 (alleging that Huawei’s research and development team was, part of Huawei China). Huawei later surrendered 4 of the photos to T-Mobile, claiming that the remainder were too blurry to be of use. ¶ 52. Mr. Wang admitted in a June 2013 interview that he took the photos to assist Huawei’s testing robot development team. ¶ 71.

In the wake of Mr. Wang’s unauthorized actions, T-Mobile racheted up security restrictions on Huawei. It barred all Huaw-ei personnel except Mr. Xiong from the clean room. ¶ 51. It required that he be escorted to the room, and that his activities in the room be recorded on video. ¶ 51.

, In late May 2013, T-Mobile, gave Mr. Xiong four end effectors in the clean.room for testing. ¶ 54, He hid one of them from the view of the security camera, -then placed it in his. laptop bag and took it out, of the clean room. ¶ 55. T-Mobile quickly discovered that it was missing, then confronted Mr. Xiong, who denied intentionally taking, it. ¶ 56. Mr. Xiong took the stolen end effector to Huawei USA’s local offices, took measurements and conducted other analyses,' and sent the results to Huawei’s research and development team in China. ¶¶ 57-59. Mr. Xiong admitted in a June 2013 interview that both Mr. Wang’s photographs and his analyses of the end effector were appropriated to assist in Huawei’s development of a testing robot. ¶¶ 69-70. He admitted that he had been inquiring with third parties about developing a testing robot since early 2013. ¶ 66. A Huawei USA executive vice president admitted that Mr. Wang and Mr. Xiong acted to assist Huawei with developing a testing robot. ¶ 68.

In addition to Mr. Wang’s photographs and Mr. Xiong’s theft of the end effector, T-Mobile alleges that unnamed Huawei representatives stole “sequence files,” software files used to guide Tapp/s testing procedures. ¶¶ 61-62. .

Huawei used the fruits of its theft to build a testing robot.' ¶16. It now uses that robot to test its own handsets. ¶ 19.

Because of Huawei’s conduct, T-Mobile terminated its supplier relationship. The cost of that termination, along with the cost of investigating Huawei’s theft, is millions of dollars. ¶ 20.

From these allegations, ‘ T-Mobile attempts to state four causes of action. It contends that both Huawei USA and Huawei China are liable for misappropriation of trade secrets in violation of Washington’s version of the Uniform Trade Secrets Act (“UTSA,” RCW Ch. 19.108), for breach of contracts protecting T-Mobile’s confidential information (including the 20Í0 supply agreement, the 2012 non-disclosure agreement, and the Clean Room Letter),. and for violation of the Washington Consumer Protection Act (“CPA,” RCW Ch. 19.86). T-Mobile contends that Huawei China alone is liable for interfering with . T-Mobile’s contractual relationships and business expectancies.

Huawei USA has invoked Federal Rule of Civil Procedure 12(b)(6), moving to dismiss the three causes of action against it for failure to state a claim. Huawei China filed its own motion joining its subsidiary’s motion, but also requesting that the court dismiss the tortious interference claim for failure to state a claim. In addition, Huawei China invoked Federal Rule of Civil Procedure 12(b)(2), asking the court to dismiss all claims against it for lack of personal jurisdiction.

The court now considers both motions to dismiss.

[1191]*1191III. ANALYSIS OF RULE 12(b)(6) MOTIONS

Both Huawei Defendants invoke Fed.R.Civ.P.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
115 F. Supp. 3d 1184, 2015 U.S. Dist. LEXIS 91495, 2015 WL 4308682, Counsel Stack Legal Research, https://law.counselstack.com/opinion/t-mobile-usa-inc-v-huawei-device-usa-inc-wawd-2015.