Security News

Huawei Claims 'Secrets' Were Stolen ... Loses Court Case

Chinese electronics giant, Huawei, is in the news again. After having its technology banned around the world due to nations citing 'security reasons', this time a jury has cleared CNEX Labs Inc of stealing Huawei's memory control technology.

In retaliation, CNEX - a California-based semiconductor designer - countersued, claiming Huawei posed as a potential customer in order to access CNEX secrets, saying it was "part of a pattern by Huawei to obtain others' secrets."

This case goes back to 2017, when Huawei sued CNEX and co-founder Ronnie Huang, a principal system architect at Futurewei Technologies, a subsidiary of Huawei. Huang's employment contract stipulated he notify Huawei of any patents he obtained within a year of leaving the firm. Huang co-founded CNEX within days of leaving Huawei and, because of this, Huawei was seeking rights to the CNEX memory-control technology and over US$85 million in damages.

In May this year, Huawei wrote in a statement on their website that Huang "left the company with intellectual property that he stole from Huawei ... poached several Huawei employees and used Huawei assets to start his own company (CNEX)." The statement also said that "CNEX's accusations against Huawei are totally unsubstantiated ... and these recent accusations are nothing more than an empty copycat claim."

CNEX attorney Deron Dacus said at the start of the trial (early June) that the lawsuit was 'bullying and intimidation' and that the technology Huawei claims are secrets are not. After the verdict, CNEX issued a statement in which they said, "This is a victory for the rule of law and for global standards of ethical corporate behaviour. This case was never about money."

The case was multi-facted and the jury awarded no damages in any aspect of it, even though they found Huang breached his employment agreement and failed to notify the company of his patent filings, and Huawei had misappropriated CNEX’s secrets.

Huawei said it is reviewing the decision and considering its next move.

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