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Huawei loses US trade theft case

by on27 June 2019

US jury could not believe that the Chinese invented anything

A US jury cleared California semiconductor designer CNEX Labs of stealing trade secrets from Chinese electronics giant Huawei while awarding CNEX no damages on its trade theft claims.

Huawei had sued CNEX in US District Court in Sherman, Texas, for misappropriation of trade secrets involving a memory control technology and for poaching its employees. The jury rejected those claims while finding a CNEX founder failed to notify the company of his patent filings.

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. The jury found Huawei had misappropriated CNEX’s secrets but awarded no damages.

CNEX General Counsel Matthew Gloss claimed it was a “victory for the rule of law and global standards of ethical corporate behaviour. This case was never about money”.

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

CNEX co-founder Yiren “Ronnie” Huang, who quit Huawei and co-founded 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 Huang breached his employment agreement”.

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

A CNEX spokesperson said that the jury did not award CNEX any damages in its trade theft claims because it did not have any revenue. 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, separately is overseeing Huawei’s bid to overturn the Trump administration’s ban on its sales to government agencies and contractors.

Last modified on 27 June 2019
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