CNEX cleared of stealing trade secrets from Huawei

It was alleged that Huawei, in turn, posed as a customer in order to steal valuable intellectual property from CNEX.
Written by Charlie Osborne, Contributing Writer

Semiconductor giant CNEX Labs has been cleared of stealing intellectual property from Huawei, potentially laying to rest a convoluted court battle in which both parties claimed injury for the loss of trade secrets. 

As reported by the Reuters news agency, on Wednesday, the acting jury for the US District Court in Sherman, Texas, cleared CNEX of any wrongdoing. 

Huawei claimed that CNEX had stolen memory control technologies and sought to seize control of a patent later filed by CNEX which claimed ownership of the intellectual property. 

The Chinese device manufacturer filed the suit in 2017 and sought roughly $86 million in damages. Huawei also alleged that CNEX was involved in soliciting and poaching its employees. 

The court did not agree and the allegations laid at CNEX's door were dismissed.

See also: US-China tech cold war heats up: But Huawei has other irons in the fire

The jury did find, however, that one of the company's founders -- a former Huawei employee Yiren Huang -- did fail to notify Huawei of his patent filing which was a stipulation of his employment contract with Huawei. 

The conditions of the contract required Huang to tell Huawei of any patents obtained within a year of leaving the company, Reuters reports. 

CNEX, in turn, launched a countersuit against Huawei. The chipmaker claimed that Huawei used underhanded tactics to steal rival firms' secrets -- such as posing as a potential customer -- and while the court found secrets had been misappropriated, no damages were awarded. 

A CNEX spokesperson told Reuters that Huawei's lawsuit was simply a bid to obtain the patent. CNEX attorney Deron Dacus added that the court case could be considered an effort to "bully and intimidate."

Huawei is considering the court's decision and a spokesperson said the ruling was a "disappointment" considering Huang was found to have broken his employment contract. 

TechRepublic: FedEx suing Department of Commerce over burden of enforcing Huawei blacklisting

The Chinese tech giant is embroiled in another intellectual property lawsuit with T-Mobile. Huawei has pleaded not guilty to claims that the firm attempted to emulate a robotic design created by T-Mobile in 2012 - 2013 for testing mobile devices. 

Federal charges including the theft of trade secrets, conspiracy, wire fraud, and obstruction of justice have been laid out and a trial is set for 2020. 

Huawei is also facing trouble in the political field. President Trump signed an executive order in May preventing US companies buying and using foreign-made telecommunications equipment. The order was justified through cyberespionage fears and Huawei is now one of several companies on the US federal trade blacklist. 

CNET: US companies reportedly bypassing Trump ban on sales to Huawei

The US and Australia have branded Huawei a threat to national security. 

Huawei global deputy chairman Ken Hu has criticized the decision, calling the ban "unfair treatment to Huawei because the allegations are not based on facts."

Update 18.46 BST: Updated with a correction to the verdict given to CNEX's complaint.

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