Ericsson loses ruling in Airvana trade secrets case

The exterior of Ericsson's headquarters are seen in Stockholm April 30, 2009.

NEW YORK (Reuters) - Airvana Network Solutions Inc, a Massachusetts broadband network company, has won a preliminary injunction against Ericsson in a trade-secrets lawsuit that seeks more than $330 million from the Swedish telecommunications network equipment maker.

State Supreme Court Justice Barbara Kapnick in Manhattan ruled that Airvana had shown it was likely to succeed on the merits of its lawsuit and would suffer irreparable harm if the injunction were not granted.

Under the injunction, which was issued on Tuesday, Ericsson cannot use certain hardware unless it employs software developed by Airvana.

Airvana filed the lawsuit last year, claiming Ericsson stole its trade secrets and attempted to drive it out of business.

The lawsuit alleged that Ericsson secretly worked with a Korean partner to create "knock-off" hardware based on technology developed by Airvana that could then be sold to wireless carriers Verizon Wireless and Sprint Nextel Corp. Verizon Wireless is a joint venture of Verizon Communications Inc and Vodafone Group Plc.

Airvana, founded in 2000 by former Motorola Inc executives, accused Ericsson of attempting to replace Airvana's design with a so-called "in-house" product that is actually based on Airvana's work.

Ericsson had argued in court that it had modified Airvana's designs to the point where the new hardware was no longer "based on" Airvana's design, according to the judge's decision.

But Kapnick disagreed, concluding that the hardware in question was based on Airvana's work.

The case is Airvana Network Solutions Inc v. Ericsson Inc et al, New York State Supreme Court, New York County, No. 650360/2012.

(Reporting by Joseph Ax; Editing by Gerald E. McCormick, Bernard Orr)