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

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

January 3, 2018

QUINTEL TECHNOLOGY, LTD.
v.
HUAWEI TECHNOLOGIES USA, INC., ET AL.

          Judge, Craven

          MEMORANDUM ADOPTING REPORT AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE

          AMOS L. MAZZANT, UNITED STATES DISTRICT JUDGE

         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 December 4, 2017, the Magistrate Judge issued a Report and Recommendation, recommending Motion on Behalf of Plaintiff Quintel Technology Ltd. for Partial Summary Judgment on Claim for Breach of Non-Disclosure Agreement (Dkt. #142) be denied. Quintel Technology Ltd. (“Quintel”) filed objections to the Report and Recommendation. The Court conducts a de novo review of the Magistrate Judge's findings and conclusions.

         BACKGROUND

         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 (together with Huawei, “Defendants”). In its First Amended Complaint (“FAC”) filed December 1, 2015, Quintel asserts the following claims against 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.[1]

         The Court provides the following, as outlined in the Report and Recommendation. (Dkt. #184). Quintel “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, ¶¶ 2, 10. Collectively, Defendants are “telecommunications equipment maker[s] and, among other things, manufacture[] 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 [Defendants] explored whether they might partner together to service mobile operators in the wireless network industry.” Id. ¶ 14.

         According to Quintel, after the parties entered into a non-disclosure agreement (“NDA”), Quintel began to share confidential and proprietary information and trade secrets, including its proprietary antenna technology, with Defendants. Id. ¶¶ 20, 30-45. In particular, Quintel showed Defendants 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, [Defendants] never intended to enter into a partnering relationship with Quintel.” Id. ¶¶ 44-46. FutureWei filed a nonprovisional patent application with the USPTO, claiming the benefit of its provisional patent application “seeking protection of an invention based on the Quintel confidential and proprietary antenna technology that Quintel 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. According to Quintel, 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.

         MOTION FOR PARTIAL SUMMARY JUDGMENT

         On October 13, 2017, Quintel filed its motion for partial summary judgment on Quintel's first cause of action for breach of contract. According to Quintel, the undisputed facts establish that Huawei breached the September 21, 2009 NDA with Quintel by disclosing and/or using Quintel's confidential information for their own benefit, without Quintel's consent. Quintel asserts the amount of Quintel's damages resulting from Huawei's breach of contract will be determined at trial, but it is undisputed the parties executed the NDA, that Quintel provided confidential information pursuant to the NDA, that Huawei disclosed and/or used such confidential information provided under the NDA without permission, and that Quintel has been damaged as a result of the breach; thus, according to Quintel, it is entitled to partial summary judgment on the limited issue of Huawei's liability for breach of the NDA.

         REPORT AND RECOMMENDATION

         On March 1, 2017, the Magistrate Judge issued a Report and Recommendation, recommending Quintel's motion be denied. The Magistrate Judge found there is a genuine issue of material fact regarding whether each piece of Quintel information at issue constitutes “Confidential Information” as defined in the non-disclosure agreement between the parties, and Quintel cannot show a breach of the non-disclosure agreement by Defendants as a matter of law. Given the Magistrate Judge's finding there is a genuine issue of material fact whether the Quintel information at issue constitutes “Confidential Information” under the terms of the NDA, she did not address whether Defendants indisputably used or disclosed any “Confidential Information” in violation of the agreement or whether Defendants' alleged breach of the ...


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