Motorola fends off lawsuit filed by Taiwan’s DBTel

The Prosecutor’s Office of the Taipei District Court has dismissed a criminal complaint filed by Taiwanese mobile phone maker DBTel Inc. against Motorola Electronics Taiwan Ltd., Motorola Inc. said Thursday.

In September 2002, DBTel, a former manufacturing subcontractor for Motorola, filed suit against Motorola Taiwan in Taipei District Court alleging that the Motorola C289 mobile phone infringed upon a copyrighted printed circuit board design owned by DBTel. The company also alleged that the C289 infringed upon a design patent it owns for the Motorola T189 mobile phone, which DBTel manufactured under contract for Motorola.

That suit has been dismissed by the Prosecutor’s Office of the Taipei District Court, which ruled that DBTel had provided no evidence of infringement by Motorola and said DBTel had no legal basis to file a criminal complaint for design patent infringement, Motorola said.

A civil suit filed in Taiwan by Motorola against DBTel remains under litigation, the company said.

The legal battle between Motorola and DBTel springs from a four-year manufacturing deal between the companies that ended in 2002 amid allegations of unpaid component costs and stolen trade secrets.

This type of arrangement is common between multinational hardware vendors and Taiwanese manufacturers. Many of the world’s IT products – including notebook PCs, mobile phones and personal digital assistants (PDAs), among many others – are designed and manufactured by Taiwanese companies under contract.

In the case of Motorola and DBTel, the two companies signed a manufacturing agreement in 1998 that ended in April 2002. In May 2002, Motorola filed suit in Taiwan against DBTel to recover what it claimed was US$48 million in unpaid costs for components used in mobile phone handsets and to protect what the company called its “trade secrets” in Thursday’s statement.

Motorola claimed in its suit that DBTel, which also manufactures and sells handsets under its own brand in countries like Taiwan and China, had violated the terms of the manufacturing agreement and had used Motorola trade secrets to compete against Motorola.

DBTel responded in September 2002 with the filing of the criminal complaint that has now been dismissed. That lawsuit was followed In October 2002 when Motorola filed a request with the Intellectual Property Office of Taiwan’s Ministry of Economic Affairs for DBTel’s design patent for the T189 be invalidated.

Both the civil suit related to the claim for unpaid component costs and the invalidation requests are still ongoing, Motorola said.