Chip Trade Secret Theft Case Against Huawei Expands, Exec Implicated

CNEX, a prominent American startup with high-profile investors including Microsoft and Dell, expanded its accusations of chip trade secret theft against Huawei, having done so just over half a year after originally pressing charges.

It's now claiming Huawei Deputy Chairman Eric Xu personally ordered an employee to spy on it and attempt stealing its protected technologies or at the very least covertly assess them. The person in question allegedly did so by falsely representing themselves as a potential customer, as stated in the expanded lawsuit filed by the San Jose, California-based firm. Huawei is accused of targeting the entirety of its research and development unit which continues to pursue new semiconductor tech to this date.

CNEX filed a lawsuit at a Texas court whose jurisdiction encompasses Huawei's American headquarters. According to the startup, Huawei misappropriated a number of its trade secrets, both on its own and via a working relationship with the Xiamen University in China. The plaintiff's legal team previously suggested Huawei has been spying on it for years, having supposedly done so in a wide variety of ways. Huawei not only denied all of its accusations — including the newly added ones implicating one of its top executives — but has actually filed a countersuit, claiming it's CNEX that misappropriated its very own intellectual property and not the other way around.

Following preliminary proceedings that are now coming to an end, the case is moving to a courtroom environment, with the trial being scheduled to commence on Monday, June 3rd.

The dispute with CNEX is just one among many issues Huawei has in the United States; the Shenzen-based conglomerate also sued the American government itself several months back, claiming Washington has been discriminating against it due to baseless accusations of spying. The White House unsurprisingly disagreed with that assessment, having doubled on the national security angle just last week by blacklisting Huawei and preventing American companies from supplying it with both software licenses and hardware.

The firm managed to obtain a temporary license in a matter of days but the future of its consumer electronics operations is still highly uncertain, especially seeing how the Department of Justice is already pursuing litigation against the Chine company based on some two dozen charges, alleging it's guilty of trade secret theft against T-Mobile and a systematic effort to violate trade sanctions imposed on Iran. The latter case is also the basis for the extradition request for Huawei Chief Financial Officer Meng Wanzhou who's been detained in Canada since December.

Ms. Meng, who also happens to be the daughter of Huawei founder Ren Zhengfei, is hence facing up to 30 years in federal prison, pending the U.S. extradition request and its case against her that alleges she was personally involved in Huawei's efforts to obfuscate ties to a satellite used for doing illegal business in Iran. Whether this latest episode in the manufacturer's long history of issues with the U.S. ends up dealing a long-term, crippling blow to the conglomerate remains to be seen, though the case is certainly much more bizarre than most.

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Dominik Bosnjak

Senior Writer
Dominik started at AndroidHeadlines in 2016. He’s approaching his first full decade in the media industry, with his background being primarily in technology, gaming, and entertainment. These days, his focus is more on the political side of the tech game, as well as data privacy issues, with him looking at both of those through the prism of Android. Contact him at [email protected]