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Huawei Loses Court Case, Guilty Of Stealing

As Huewei consumer PR executives try to convince journalists that Huawei technology is not a security threat a federal jury in Texas has overnight ruled that Huawei stole trade secrets from a Silicon Valley Company.

The big Chinese Company who has seen sales of their smartphones slump in Australia faced a three week trial where the court heard that Huawei had misappropriated technology from the startup, Cnex.

In a statement, Huawei called the Cnex ruling a “mixed verdict” and said it was considering its next steps.

The Cnex case isn’t directly related to that trade dispute that has seen Huawei’s smartphone business crash around the world, though it’s overseen by the same federal judge, Amos Mazzant III, who is assigned to a Huawei lawsuit against the U.S. government.

Huawei says that a ban on US federal agencies and contractors buying its equipment is unconstitutional.

The good news was that Huawei didn’t benefit from the technology the Court heard.

The jury also rejected Huawei’s claims that Cnex co-founder Yiren Huang stole technology while he worked at a Huawei subsidiary, then recruited other former Huawei workers after helping launch Cnex in 2013.

Huawei is embroiled in a trade dispute between China and the U.S., which has accused Chinese companies such as Huawei of committing forced technology transfers and stealing trade secrets.

Cnex, which has financial backing from Microsoft and Dell Technologies, works on solid-state drives, the types of storage common in smartphones and other popular devices. They start faster and are more reliable than traditional hard disks, though they are typically more expensive.

Huawei said Huang started Cnex three days after leaving Huawei’s Futurewei unit and began filing patent applications less than a month later based on work he did there. Huawei also accused Huang of poaching its employees and alleged that one was caught downloading thousands of pages of confidential Huawei documents.

The jury found that Huang did violate a contract provision regarding disclosing patent applications, but it awarded no damages after concluding Futurewei didn’t prove harm.

Lawyers for Cnex has countered that Futurewei hired Huang in 2011 as a pretext to steal his ideas. In court documents, Cnex accused Huawei Deputy Chairman Eric Xu of directing an effort to reverse-engineer Cnex technology. Huawei lawyers denied the accusation.

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