The relationship between T-Mobile US Inc (NYSE:TMUS) and Chinese telecommunication equipment manufacturer, Huawei is over. The reason behind this break-up appears to be the allegations that T-Mobile US has levied on Huawei of stealing its robot-testing technology. While Huawei is refuting these allegations, T-Mobile US Inc (NYSE:TMUS) has gone ahead and stopped doing any kind of business with Huawei. Chris Carani, Former Law Clerk for U.S. District Court, and Cory Johnson discussed on this issue recently on Bloomberg.

T-Mobile US Inc, is TMUS a good stock to buy, John Butler, Deutsche Telekom AG, Dish,

“[…] This particular diagnostic robot, tests the reliability of those particular buttons on a phone and as part of that, there were collaborations between T-Mobile and cell phone maker Huawei. As part of that evidently, Huawei has ,at least the allegation is, tried to develop its own robot and got a leg up by allegedly taking these components specifications and software from T-Mobile,” Carani said.

Carani mentioned that T-Mobile US Inc (NYSE:TMUS) started developing this robot in 2006. According to him this robot is very important for T-Mobile as it helps the company in testing the reliability of phones that it buys. According to Carani, this case is not one of patent rights, but is instead of trade secret. He went on to describe the difference between patent and trade secrets by citing the example of Coca-Cola, he elaborated how 100 years ago The Coca-Cola Company (NYSE:KO) instead of registering a patent, kept the formulation of its drink, a secret.

Carani highlighted that a few years ago T-Mobile US Inc (NYSE:TMUS) was using this robot in its advertising. Therefore, according to him, it would be worth watching whether T-Mobile will be able to establish a case on the basis of trade secret violation when it has used some aspects of this trade secret for promotions.

As of June 30, 2014, John Paulson‘s Paulson & Co. owns over 12 million shares of T-Mobile US Inc (NYSE:TMUS) .

Disclosure: None

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Ritesh Anan is a full-time derivatives trader. Though he firmly believes in the power of Technical Analysis, he is also a lifelong student of macroeconomics. In his free time, he reads anything and everything that comes from Robert J. Shiller, George Soros and Nassim Nicholas Taleb.