Massachusetts-based Airvana had a long-term contract to provide software for Nortel and its successor company, Ericsson, for certain pieces of Airvana-designed data transfer hardware. Airvana sued Ericsson in February 2012, accusing it of stealing its trade secrets in order to develop its own version of the software. In addition to demanding a minimum of $330 million in damages–an amount that could be trebled under Massachusetts state law–Airvana asked for a preliminary injunction blocking Ericsson from using certain high speed wireless hardware unless it contained Airvana software.
Ericsson, which is represented by Holland & Knight, countered that it had modified Airvana’s hardware to such a degree that it was no longer covered by the contract. But Manhattan state supreme court justice Barbara Kapnick sided with Airvana Tuesday in a 42-page opinion, ruling that Airvana would be irreparably harmed without the injunction.
According to the opinion, Ericsson is Airvana’s only customer. Kapnick therefore agreed with Airvana’s argument that it would be forced into bankruptcy without the injunctive relief it sought. The judge rejected Ericsson’s assertions that it had sufficiently changed Airvana’s hardware, finding that Ericsson could only meet its contractual obligations by creating a product from scratch.
Wilmer partner Peter Macdonald told us the judge had plenty to go on in reaching her conclusions. “It’s important to bear in mind there were three days of evidentiary hearings, hundreds of pages of briefs, and a highly detailed record and opinion,” he said. “Having this kind of detailed evidentiary hearing at the preliminary injunction stage is unusual, and we’re grateful that the judge gave us this kind of time.” Macdonald added that he expected Ericsson to press for an interlocutory appeal, though he said he thought there was little basis for such a challenge.
Ericsson’s attorney, Christopher Kelly of Holland & Knight, didn’t respond to a request for comment.