Fri, Jun 28, 2019 - Page 10 News List

Texas jury finds Huawei guilty of trade secret theft

WARNING:A proposal to block Huawei from pursuing damages in US patent courts would threaten the global intellectual property system, its chief legal officer said


A Texas jury on Wednesday ruled that Chinese technology giant Huawei Technologies Co (華為) stole trade secrets from a Silicon Valley start-up, but jurors declined to levy damages, saying Huawei did not benefit from the theft.

The jury in US District Court in Sherman, Texas, also rejected Huawei’s claims that Cnex Labs Inc cofounder Yiren Huang (黃義仁) stole its technology while he worked at a Huawei subsidiary.

Huawei is embroiled in a trade dispute between China and the US, which has accused Chinese companies such as Huawei of committing forced technology transfers and stealing trade secrets.

The Cnex case is not directly related to that trade dispute, although it is overseen by the same federal judge, Amos Mazzant III, who is assigned to a Huawei lawsuit against the US government.

Huawei says that a ban on federal agencies and contractors buying its equipment is unconstitutional.

Cnex general counsel Matthew Gloss called Huawei a “bully,” adding: “We’re a small company. We didn’t seek this fight... They wanted to shut us down.”

In a statement, Huawei called the Cnex ruling a “mixed verdict” and said it was considering its next steps.

Cnex, which has financial backing from Microsoft Corp and Dell Technologies Inc, works on solid-state drives, the types of storage common in smartphones and other popular devices. They start faster and are more reliable than traditional hard disks, although they are typically more expensive.

Huawei said that Huang started Cnex three days after leaving Huawei’s Futurewei Technologies Inc unit in 2013 and began filing patent applications less than a month later based on work he did there.

Huawei also accused Huang of poaching its employees and alleged that one was caught downloading thousands of pages of confidential Huawei documents.

The jury found that Huang did violate a contract provision regarding disclosing patent applications, but it awarded no damages after concluding that Futurewei did not prove harm.

Lawyers for Cnex countered that Futurewei hired Huang in 2011 as a pretext to steal his ideas.

In court documents, San Jose, California-based Cnex accused Huawei deputy chairman Eric Xu (徐直軍) of directing an effort to reverse-engineer Cnex technology.

Huawei lawyers denied the accusation, but its chief legal officer, Song Liuping (宋柳平), yesterday said that a proposal by a US senator to block the company from pursuing damages in US patent courts would threaten the global intellectual property system that supports technology development.

The proposal followed news reports that Huawei was asking for US$1 billion from US phone carrier Verizon Communications Inc.

US President Donald Trump’s administration has imposed curbs on Huawei’s access to US technology amid tensions over Beijing’s development ambitions.

“If such a legislative proposal were to be passed, it would be a catastrophe for global innovation. It would have terrible consequences,” Song told a news conference in Shenzhen, China.

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