The 4G cellular technology manufacturer Lemko Corp. yesterday sued Motorola Solutions and its lawyers, saying Motorola's claims that Lemko is allegedly part of a Chinese spy ring tied to the Chinese government and Chinese companies have unfairly damaged its business.
The Schaumberg, Ill.-based privately held company, with Nicholas Labun its CEO and Shaowei Pan as chief technology officer, charge that Motorola and its lawyers have falsely claimed that Lemko employees are part of "a Chinese spy ring," and that the intent in saying this is to "drive Lemko out of business by harassing its customers and suppliers" in order to end by "coercing the transfer of Lemko's patents and future technology to Motorola."
BACKGROUND: Accused Chinese cyber-spy on trial for stealing Motorola secrets
The Lemko lawsuit, which also accuses Motorola of racial profiling of people of Chinese descent, is the latest in an ongoing three-year legal battle between the two companies that has as its starting point the former Motorola software engineer Hanjuan Jin, who in 2007 was arrested at Chicago O'Hare Airport by U.S. Customs as she sought to board a plane to China.
Jin, a U.S. citizen born in China, was detained at O'Hare as she was ready to board a flight to China with a one-way ticket. She was found to be carrying $30,000 and more than 1,000 electronic paper documents from her former employer, Motorola -- as well as Chinese documents for military telecommunications technology, according to the FBI affidavit filed in court.
Jin, whose trial starts this week in Chicago, stands accused by federal prosecutors of stealing mobile telecommunications technology for the benefit of China's military and a Beijing business, Kai Sun News (Beijing) Technology Company, also called SunKaisens. She has pled innocent.
Motorola's own investigation into Hanjuan Jin's activities led the company to believe that Jin allegedly went to work for Lemko during a period she was ostensibly on medical leave from Motorola.
In Motorola's civil lawsuit against Jin, Lemko as well as a handful of engineers of Chinese descent who worked for both companies at various points, Motorola in 2009 claimed that Jin "installed Motorola's proprietary secure virtual network ('VPN') access software on a Lemko-owned computer, accessed Motorola's protected computers through Motorola's secure VPN from a Lemko-owned computer and accessed Lemko's webmail system from Motorola's computers," while also getting "unauthorized access to Motorola source code and other valuable Motorola proprietary trade secrets and confidential information."
In its lawsuit yesterday accusing Motorola of "abuse" and "unfair competition," Lemko largely defends Jin, who stands accused of economic espionage.
"In fact, she was travelling to China to visit her family and was carrying with her what she believed were materials needed for her off-site work as a Motorola employee," the Lemko lawsuit contends. Lemko accuses Motorola of a "witch hunt" after the arrest of Jin, and that "Motorola falsely claimed that Lemko and Jin conspired to smuggle Motorola's trade secrets and other proprietary documents to China."
Lemko accuses Motorola, and its corporate counsel Jeffrey Johnson along with Nixon Peabody law firm counsel Mark Halligan and Deanna Swits, of all being out to "destroy" Pan, Lemko's CTO, at Lemko, as well as CEO Labun, and drive Lemko out of business in the ongoing legal battle that has already lasted more than three years.
The Lemko lawsuit filed yesterday says Motorola and its lawyers "have used subpoenas twice served on more than 60 of Lemko's customers, suppliers and potential investors to discourage them from doing business with Lemko." Lemko says this is "causing them all to either cease doing business with Lemko or altering the business that was being done."
"They have attempted to cast Lemko, Mr. Labun and Dr. Pan in an adverse light, disparaging their business and professional reputations and encouraging others to call them Chinese spies. They have also discouraged the United States Government from doing business with Lemko, resulting in the loss of a $200 million contract and future opportunities valued at $1 billion," the Lemko lawsuit filed yesterday states.
Lemko also makes an accusation against Motorola in relation to China-based Huawei Technologies.
"Motorola also directly interfered with the business relationship Lemko had with its supplier Huawei by telling Huawei that, if it did do business with Lemko, Dr. Pan or Mr. Labun, Motorola would not allow Huawei to bid on the possible sale of Motorola assets Huawei wanted to purchase. This, in effect, disrupted Lemko's ability to purchase needed equipment and products from Huawei at a critical time in Lemkos evolution."
Lemko calls all of this a "misuse of the legal process" with the intent of destroying Lemko and "coercing the transfer of Lemko's patents to Motorola, of obtaining Lemko's valuable technology." Lemko claims Motorola lawyers have falsely tied the firm to the Hanjuan Jin spy case, as a "smuggler of documents to China and as part of a Chinese spy ring."
Lemko calls Pan, who went to university in Beijing and went to work for Motorola in the U.S. before joining Lemko, "one of the most prolific inventors in the history of Motorola, creating inventions that resulted in more than 60 patents now owned by Motorola. Unfortunately, like others of Chinese descent who worked at Motorola, Dr. Pan was racially profiled by Motorola's management team, including Johnson, and, as a result of that profiling and outright prejudice, labeled a spy for the Chinese government and for Chinese companies and a smuggler of documents and technology to China."
Lemko says Motorola ultimately wants to get hold of cellular network technology that Pan developed at Lemko.
Motorola Solutions indicated it will fight the accusations hurled by Lemko in its lawsuit. Nick Sweers, Motorola Solutions vice president of global communications, said, "We consider the allegations frivolous," and Motorola will "vigorously defend" itself against what it regards as "meritless claims."
"Lemko's latest litigation tactic doesn't change Motorola Solutions' longstanding belief in the importance of protecting its intellectual property," Sweers said.
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