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Quintel Technology, Ltd. v. Huawei Technologies USA, Inc.

United States District Court, E.D. Texas, Sherman Division

April 12, 2017





         Came on for consideration the report of the United States Magistrate Judge in this action, this matter having been referred to the United States Magistrate Judge pursuant to 28 U.S.C. § 636. On March 1, 2017, the Magistrate Judge issued a Report and Recommendation, recommending Defendant Zhengxiang Ma's Renewed Motion to Dismiss Plaintiff's First Amended Complaint (Doc. No. 49) be denied. Zhengxiang Ma filed objections to the Report and Recommendation, and Quintel Technology Ltd. (“Quintel”) filed a response to the objections. The Court conducts a de novo review of the Magistrate Judge's findings and conclusions.


         On May 15, 2015, Quintel filed the above case against Huawei Technologies USA, Inc., FutureWei Technologies, Inc., Huawei Technologies Co., Ltd. (collectively “Huawei”), and Zhengxiang Ma (“Defendant” or “Dr. Ma”). In its First Amended Complaint (“FAC”) filed December 1, 2015, Quintel asserts the following claims against the defendants: (1) breach of contract; (2) misappropriation of trade secrets; (3) unfair competition by misappropriation; (4) common law fraud and fraud in the inducement; (5) promissory estoppel; (6) unjust enrichment; (7) accounting; and (8) correction of patent inventorship-35 U.S.C. § 256.

         The Court provides the following, as outlined in the Report and Recommendation. Quintel is a United Kingdom company that “designs, develops, and delivers advanced high-efficiency, high-performance antenna solutions for mobile operators to improve their delivery of wireless network services” and “has developed cutting-edge, proprietary antenna technology to better serve wireless network operators and users.” FAC (Doc. No. 20), ¶¶ 2, 10. Futurewei and Huawei Technologies USA are Texas corporations, and Huawei Technologies China is a Chinese corporation. Id. ¶¶ 3-5. Collectively, Huawei is “a telecommunications equipment maker and, among other things, manufactures base stations for wireless networks.” Id. ¶ 11.

         Around July of 2008, David Barker, the chief technology officer and an employee of Quintel, “conceived of a concept to improve reception between an antenna providing cellular telephone and/or data services, and a mobile receiving telephone and/or data services from the antenna” (the “Per User Tilt Concept”). Id. ¶¶ 12-13. “In 2009, because of potential synergies in their respective business models, Quintel and Huawei explored whether they might partner together to service mobile operators in the wireless network industry.” Id. ¶ 14. Quintel advised Huawei “the parties must execute a non-disclosure agreement (‘NDA') in advance of [a September 15, 2009] meeting.” It sent a draft NDA to Huawei. Id. ¶ 16.

         On September 21, 2009, representatives from Futurewei and Quintel met in California and executed a mutual NDA. Id. ¶ 20. A copy of the NDA is attached to the FAC. (Doc. No. 20-1). Dr. Ma participated in this meeting by telephone from New Jersey. Id. ¶ 30. Among other things, the NDA provides that “the recipient of confidential information agrees to accept such information ‘solely for use in connection with Recipient's business discussions with the disclosing party concerning potential areas of cooperation.'” Id. ¶ 22 (quoting Doc. No. 20-1, ¶ 2).

         According to Quintel, after entering into the NDA, Quintel began to share confidential and proprietary information and trade secrets, including its proprietary antenna technology, with Huawei and Dr. Ma. Id. ¶¶ 20, 30-45. In particular, Quintel showed them how the “Per User Tilt Concept” works and provided some additional confidential and proprietary information regarding Quintel's antenna technology, including information about Quintel's patents-all information Quintel contends was information protected under the NDA. Quintel alleges the parties “ultimately could not agree on final terms to any business or partnering relationship” and that “despite its professed interest, Huawei never intended to enter into a partnering relationship with Quintel.” Id. ¶¶ 44-46.

         Quintel alleges that “[a]lthough Huawei had concealed it, Quintel recently learned that” FutureWei “filed a provisional patent application with the United States Patent and Trademark Office (‘USPTO') . . . on or about October 30, 2009” wherein FutureWei “sought to establish priority for patent protection of an invention that is based on Quintel's confidential and proprietary antenna technology that Quintel had shared under the terms of the . . . NDA, ” including “a confidential Quintel slide that Quintel had provided to Dr. Ma on September 22, 2009.” Id. ¶ 49. Quintel additionally alleges that “Dr. Ma is listed as the sole inventor on the provisional patent application.” Id.

         According to Quintel, approximately one year later, FutureWei filed a nonprovisional patent application with the USPTO, which claimed the benefit of its provisional patent application “seeking protection of an invention based on the Quintel confidential and proprietary antenna technology that Qunitel had shared under the terms of the . . . NDA.” Id. ¶ 50. On November 18, 2014, the USPTO issued FutureWei Patent No. U.S. 8, 891, 647 B2 (“the ‘647 patent”), entitled “System and Method for User Specific Antenna Down Tilt in Wireless Cellular Networks.” Id. ¶ 52. The sole inventor of the patent is listed as Zhengxiang Ma of Summit, New Jersey, and FutureWei Technologies, Inc. of Plano, Texas is listed as the assignee of the patent. The ‘647 patent includes claims for user specific antenna down tilt, which Quintel alleges is a characteristic of the Per User Tilt Concept. Specifically, Quintel alleges the ‘647 patent includes one or more claims to which David Barker made an inventive contribution, but the ‘647 patent failed to name David Barker as a joint inventor. Id.

         Quintel alleges it had no reason to suspect that Huawei was misappropriating, using, and disclosing Quintel's confidential and proprietary antenna technology in contravention of the September 21, 2009 NDA, because Huawei concealed its actions and continued to engage Quintel in discussions about a potential business relationship. Id. ¶ 51. Quintel alleges the defendants' actions came to light on March 16, 2015 when the European Patent Office (“EPO”) rejected a patent application submitted by Quintel, citing the prior publication of FutureWei's United States application that resulted in the ‘647 patent as prior art. Id. ¶ 54. Quintel maintains the information was “fraudulently concealed” prior to that date, “in part by [the defendants'] continuing to feign interest in a partnership agreement.” Id. ¶ 48.


         On December 30, 2015, the defendants filed a motion to dismiss the FAC, asserting the Court lacks personal jurisdiction over Dr. Ma; six of the eight causes of action are time barred; and Quintel fails to state a claim upon which relief can be granted on all claims except the breach of contract claim against Huawei. (Doc. No. 25). On September 27, 2016, District Judge Davidson entered a Memorandum Opinion Granting in Part and Denying in Part Defendants' Motion to Dismiss. (Doc. No. 42). Judge Davidson denied the part of the defendants' motion to dismiss regarding lack of personal jurisdiction without prejudice and with leave to reurge with the results of targeted jurisdictional discovery on the issue of whether the Court has personal jurisdiction over Dr. Ma.[1]Dr. Ma filed the current renewed motion to dismiss on December 15, 2016, asserting Quintel has failed to establish any basis for the exercise of personal jurisdiction over him in Texas.

         REPORT AND ...

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