Motorola Wins Court Battle with Former Subscontractor

Motorola has announced a key milestone in its ongoing legal defense against claims made by Taiwan's DBTEL. In a critical decision handed down on June 6, 2003, the Prosecutor's Office of the Taipei District Court dismissed all criminal complaints filed by DBTEL in September 2002 against Motorola. DBTEL -- formerly a manufacturing subcontractor for Motorola's Personal Communications Sector (PCS) -- had filed a criminal complaint against Motorola Electronics Taiwan Ltd. ("Motorola"). DBTEL alleged that Motorola had infringed on copyright and design patents relating to the Motorola C289 mobile phone.

Since September 2002, DBTEL has made numerous claims against Motorola in Taiwan. With the first claim, DBTEL filed a criminal complaint alleging that the Motorola C289 mobile phone infringed upon DBTEL's copyright on its printed-circuit-board drawings. DBTEL also claimed that the Motorola C289 infringed upon DBTEL's design patent for the Motorola T189 mobile phone, which DBTEL produced for Motorola under an original equipment manufacturer (OEM) contract, which reserved technology rights to Motorola.

The Prosecutor's Office of the Taipei District Court determined that DBTEL had provided no evidence to demonstrate infringement by Motorola. Further, the Prosecutor's Office added that DBTEL had no legal basis to file a criminal complaint for any alleged design patent infringement. As a result, the Prosecutor's Office dismissed all claims filed by DBTEL against Motorola.

Motorola continues to pursue claims against DBTEL in Taiwan and in the U.S.A. In October 2002, as a response to DBTEL's filing, Motorola filed an invalidation action against DBTEL with the Intellectual Property Office of the Taiwan Ministry of Economic Affairs. In the filing, Motorola asks the Intellectual Property Office to invalidate DBTEL's registered design patent on the T189 phone.

Cynthia Photos Abbott, senior legal counsel for Motorola PCS, provided background about the DBTEL case. "Motorola filed a civil suit against DBTEL in May 2002 seeking more than $48 million dollars in damages," Abbott said. "We assert that DBTEL violated parameters of our business contract and unlawfully used Motorola trade secrets to compete against Motorola."

Both the request for an invalidation action and the civil suit are ongoing.

Litigation Background

In 1998, Motorola began working with DBTEL under an OEM manufacturing contract, which ended in April 2002. Soon after the contract concluded, Motorola sought to enforce contract clauses which protected Motorola trade secrets and which outlined DBTEL's obligation to pay Motorola for handset components used in the manufacturing process. When the contract ended in April 2002, DBTEL owed Motorola US$48 million for handset components and was applying Motorola trade secrets in the manufacture of mobile phones. Despite efforts by Motorola to resolve the matters through direct communications, DBTEL refused to honor its contractual obligations. As a result, Motorola was forced to take legal action in May 2002 -- at which time Motorola sued DBTEL to recover the US$48 million owed to Motorola by DBTEL for handset components and to protect Motorola trade secrets. In response, DBTEL filed several claims against Motorola -- one of which was thrown out by the Prosecutor's Office of the Taipei District Court on June 6, 2003."

Posted to the site on 27th June 2003