Lawyers for T-Mobile and Chinese telecom giant Huawei are finishing up closing arguments today in U.S. District Court in Seattle in a long-running dispute over a smartphone-testing robot.
The case dates back to 2014, when T-Mobile filed a lawsuit alleging Huawei stole designs and parts of the company’s top secret cell phone testing robot, nicknamed “Tappy.” The robot is designed to simulate the touch of a human finger, so that T-Mobile can test devices that it plans to carry, helping to develop maintenance plans and find ways to lower device return costs.
A jury trial on the matter began in late April and both sides were wrapping up their closing arguments on Monday. Moez Kaba of Hueston Hennigan summed up T-Mobile’s case, accusing Huawei of “scheming, spying and stealing” information about Tappy — allegedly pilfering trade secrets that, according to the wireless company, give T-Mobile an advantage over the competition.
Despite the highly technical nature of the case, the lawyer for T-Mobile argued the issue at hand is very simple.
“Ultimately, to me it comes down to two principles: You do not take something that belongs to another, and two, you must keep your word. At the core, I believe and submit to you, that’s what this case is about.”
Huawei used to be a phone supplier for T-Mobile. T-Mobile alleges that Huawei violated several agreements between the two companies, and used that relationship to copy the design and repurpose the testing robot for its own financial gain.
T-Mobile claims Huawei sent an engineer to T-Mobile headquarters on a “reconnaissance” mission to get photos and other information about Tappy. Another Huawei employee was seen on camera taking a piece of the robot, and Kaba alleged that he turned around and sent the specs to several Huawei engineers.
James Hibey, arguing on behalf of Huawei, countered that Tappy is far from a trade secret. Just because something is covered by a confidentiality agreement doesn’t make it a trade secret, he said. Much of the information about Tappy can be found in the public domain through things like patent applications and promo videos, Hibey argued, and therefore it is not a trade secret.
Huawei did build its own testing robot, xDeviceRobot. Hibey said the company communicated back and forth with T-Mobile for close to two years about it, asking questions about how to improve it and getting tips from T-Mobile executives. The two companies were working together, and T-Mobile wanted to streamline testing processes with Huawei, Hibey said. That would include sharing information about its testing robot.
“How do you achieve it?” Hibey asked of the best way to be on the same page with T-Mobile. “You replicate the test environment. In this case, ultimately, you build a robot that runs the test T-Mobile runs with Tappy.”
As to the “reconnaissance” mission and alleged theft of the robot piece, Hibey said T-Mobile gave Huawei access to labs. Huawei officials were allowed to take files out of the lab, save and download test data and take photos, he said.
Hibey said T-Mobile’s claims of corporate espionage — spying and stealing — are meant to make Huawei executives look like villains because they have little evidence of Huawei stealing anything from T-Mobile.
“There’s no evidence in this case of a trade secret, let alone misappropriation of a trade secret or use, integration of a trade secret into Huawei’s testing on any kind of phone that was ever repaired, or made different, improved as a result xDR testing,” Hibey said. “Not one shred of evidence in the case. But they had to go after making these people look bad because they’ve got nothing to support the trade secret claim.”
T-Mobile’s team claims $8.2 million in lost profits due to the need to pull Huawei phones from its devices lineup. T-Mobile also wants damages in the form of a “reasonable royalty,” which is basically a hypothetical negotiated value that would come from a license or purchase of Tappy technology. That figure, according to witnesses and experts for T-Mobile, totals approximately $159.6 million. T-Mobile also recommend the jury require Huawei to pay “punitive damages,” that would send a message to the company and stop it from repeating its alleged actions. That number was double the combined lost profits and reasonable royalty figures, or approximately $334 million.
Earlier in the trial, the court found that Huawei had violated a pair of agreements between the two parties, including a non-disclosure agreement.
This case isn’t the only legal battle the two firms are waging. In January 2016, Huawei hit T-Mobile with a flurry of patent infringement lawsuits, and filed another one in July 2016. Several of these cases remain active, according to court documents.
The case is global in nature, but has big implications locally as well. T-Mobile is based in Bellevue, Wash., and Huawei opened an engineering center in Bellevue last year.