Motorola bid to dismiss 3G phones lawsuit fails

CALIFORNIA, USA:  Motorola has lost a bid to dismiss a class-action lawsuit accusing it of misleading investors about prospects for its 3G phone business.

In a decision on Monday, U.S. District Judge Amy St. Eve in Chicago said there is a "genuine dispute" as to whether Motorola in 2006 and early 2007 withheld key information from investors about its ability to compete with rivals including Nokia Oyj and Samsung Electronics Co Ltd.

The plaintiffs contended that Motorola had suffered an earnings "gap" that had topped $1.1 billion in July 2006, and that the company continued to assure that its 3G product portfolio was "on track" when it knew otherwise.

Motorola Inc in January split into two companies: Motorola Mobility Holdings Inc, which includes its handset and set top box business, and Motorola Solutions Inc, which sells wireless equipment.

Neither Motorola entity was immediately available for comment. A lawyer for the plaintiffs was also not immediately available for comment.