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Huawei fails in the suit, was ruled stealing the technology of CNES startup

Huawei fails in the suit, was ruled stealing the technology of CNES startup

. 3 min read

The jury of the dispute supposes, Huawei themselves, not their subsidiary company in the US – Futurewei, has stolen CNEX technology instead of being the victim of this matter.

The jury of the dispute between Huawei and CNEX, gave its decision yesterday. Accordingly, the board dismissed the claim that China’s technology giant was the victim of this dispute. They also supposed Huawei Technologies stole trade secrets from CNEX.

The jury in Sherman, Texas said that Huawei did not benefit from the theft. This also means China’s technology giant not have to pay damages to CNEX Labs Inc. startup.

The focus of this dispute revolves around the technology of reliable storage, made from chips called NAND Flash memory chip and aim to store information in semiconductors. These storages allow accessing to data with many times faster rate than traditional magnetic disk technology.

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CNEX Labs was founded in 2013 by two former directors of Marvell Technology Group and Yiren “Ronnie” Huang. And, Mr.Huang was the researcher who previously worked at Futurewei, Huawei’s subsidiary in the US.

Based on its technology, CNEX establishes relationships with major technology companies such as Microsoft to develop methods helping storage faster and cheaper. This is an essential need for storing and accessing a massive volume of data on cloud storage services.

Arguments of the parties in the trial

Huawei accused Huang of wanting to set up his own company, but he did not receive any supports, so he joined Futurewei in 2011. According to Huawei, while Huang worked there, he used a group of engineers to develop new technology for storage devices. Then, he left the company and founded CNEX just three days later. Here, he and other CNEX founders declared Huang’s idea to belong to them and entice other Huawei employees.

In the trial, CEO of CNEX, Alan Armstrong also had some explanation to the jury. He had asked Huang to help establish CNEX after being introduced from a mutual friend. And, any former Huawei employee joining CNEX all because they fell “unhappy where they worked and want to make for a startup.”

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Mr. Huang, one of three founders of CNEX, said he had this idea for a long time before joining Futurewei. He had the decision to left after realizing the company would not have much support for him.

Huawei also supposed that Huang began to seek how to give a patent for several months after joining Futurewei; the license of Huang was based on the research that he did at Futurewei. The jury just pointed out Huang violating the work agreement on the clause of disclosing patent applications, but Futurewei has no any damages by that mistake.

In the last trial, the jury found Huang not stealing any trade secrets in this incident. CNEX argues that whatever Huawei claims to be secret all are actually publicly available information.

This lawsuit is not for money

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The chief lawyer of CNEX, Matthew Gloss, said after the decision of the court: “Because we are a new company with having no revenue or profit, so the jury cannot judge about compensation for CNEX on any damages.”

This is a victory for the rules of the law and the global standards of ethics in enterprise behavior.

This lawsuit has never been about money. This lawsuit is to save the company.

He added.

The jury also supposed that Huawei itself, not their research department in the US – Futurewei, had stolen trade secrets of CNEX. Huawei’s lawyers at the trial did not give any comments on the ruling of this trial.

In the meanwhile, according to Tim Danks, Huawei’s vice president of risk management, the company is valuing this decision and considering its next steps. Mr. Danks said this result same as “a messy judgment,” and this company feels disappointment at the jury judgment as they did not offer compensation after noticing Mr. Huang violating his work agreement.