Huawei loses trade secrets case against a US company

In an opposing lawsuit, a federal US jury found the Chinese technology firm stole trade secrets.

Huawei shop in Beijing, China
A former Huawei employee sued the company for industrial espionage in 2018 [File: Andy Wong/The Associated Press]

A United States jury on Wednesday cleared California semiconductor designer CNEX Labs Inc of stealing trade secrets from Chinese electronics giant Huawei Technologies Co Ltd while awarding CNEX no damages on its own trade theft counterclaims.

Huawei had sued CNEX in United States District Court in Sherman, Texas, for misappropriation of trade secrets involving a memory control technology and for poaching its employees. CNEX filed a countersuit, alleging Huawei sought to steal its technology by posing as a customer and calling the original claims part of a pattern by Huawei to obtain others’ secrets.

One Judge, two important cases

The US has effectively banned its agencies from buying Huawei telecommunications equipment and barred US companies from doing business with Huawei, claiming the firm represents a threat to national security.

Huawei has filed a suit to overturn the US sales ban before the same Texas judge who heard the trade secrets suit.

The company is reviewing the decision and considering its next moves, said Tim Danks, a Huawei vice president for risk management.

Mixed verdict 

The jury found that CNEX cofounder Yiren “Ronnie” Huang, who quit Huawei and cofounded CNEX days later, breached his employment contract requiring him to notify the company of any patents he obtained within a year of leaving the firm. However, it did not award Huawei damages.

Danks called the result a “mixed verdict”, noting the company “is disappointed that the jury awarded no damages after finding Mr. Huang breached his employment agreement.”

Huawei had sued CNEX and cofounder Huang in 2017 and was seeking at least $85.7m in damages and rights to the San Jose, California, company’s memory-control technology.

“The things that Huawei claims are trade secrets are not,” CNEX Lawyer Deron Dacus said in court at the beginning of the trial earlier this month. He further described the lawsuit as “bullying and intimidation”.

The eight-person jury did not award CNEX any damages in its trade theft claims because it did not have any revenue, a CNEX spokesman said. Huawei’s suit was an effort to acquire “CNEX’s advanced semiconductor technology” through court action, said CNEX spokesman Paul Sherer.

US District Court Judge Amos Mazzant, who heard the trade secrets case, is also overseeing Huawei’s bid to overturn President Donald Trump‘s administration’s ban on its sales to government agencies and contractors.

Source: Reuters