Vringo’s Litigation with ZTE: The Continuing Saga…

Vringo’s NDA dispute with ZTE has been previously noted in this blog.  The case in the Southern District of New York involved violation of a Non-Disclosure Agreement by alleging revealing confidential materials without authorization to China’s antitrust enforcers.  Vringo’s general counsel claimed at that time that he could not come to the United States due to an investigation involving ZTE’s violations of US export control laws. ZTE was under threat of sanctions due to violations of the NDA and other conduct.

Since the time of the global settlement between Vringo and ZTE in late 2015, ZTE entered into a settlement with the Department of Justice over violations of US export control laws (March 2017), including claims of obstruction of justice and making of false statement to federal investigators. A fine of 1.19 billion dollars was imposed, making it the largest fine for export controls in US history.  ZTE’s actions included use of shell companies and internal corporate structures designed to destroy or conceal information, including punishment of whistleblowers.  The controlled exports involved Iran and North Korea.

In the latest development, ZTE’s US-based lawyers have now been hit with a law suit by one of its employees, claiming that King & Spaulding fired him because of “wrongful termination of his employment in violation of the implied-in-law obligation of a law firm to refrain from erecting or countenancing disincentives to compliance with the core rules of professional conduct.”  The complaint relies in part on hearing transcripts, including the following where Judge Kaplan stated to Mr. Straus, ZTE’s counsel:

“I see obstruction all over the place, not in a technical obstruction of justice criminal case sense, but obstruction of legitimate discovery, and I am not going to stand for it for much longer.”  ZTE Matter, Hearing Tr. (Doc. No. 143) at 13:2-25.

The plaintiff David Joffe, is represented by Andrew Moskowitz.  The complaint, filed May 8, 2017, is attached.