Huawei Accused by Startup of Enlisting Professor to Obtain Its Tech

CNEX is developing technology to enhance the performance of solid-state drives in data centres.

By Reuters | Updated: 10 May 2019 17:45 IST

A US startup company is accusing Chinese telecommunications gear provider Huawei of enlisting a Chinese university professor working on a research project to improperly access the startup's technology, according to court documents filed last week.

California-based CNEX is developing technology to enhance the performance of solid-state drives in data centres and has been in a dispute with Huawei Technologies since 2017. In a new set of counterclaims filed in federal court in Texas last week, CNEX alleged that Bo Mao, a professor at Xiamen University, asked for one of the company's circuit boards as part of a research project.

The company alleges that it required Mao to sign a "strict non-disclosure obligation" about the circuit board. But CNEX alleged that, unbeknownst to it, the university was working with Huawei and alleged that after it sent the circuit board to the professor, technical details about its products ended up in Huawei's hands.

"Huawei took CNEX's proprietary and trade secret information and shared it with the personnel developing Huawei's (solid-state drive) controllers in violation of representations made to CNEX and restrictions placed on the distribution of CNEX's technical information," the startup said in the filing.

Neither Huawei nor Mao returned a request from Reuters for comment.

Huawei's gear has been largely shut out of the United States since 2012 over security concerns the technology could be used for espionage. The company has said the concerns are unfounded.

The company's CFO Meng Wanzhou, 47, the daughter of Huawei's billionaire founder, Ren Zhengfei, was arrested at Vancouver's airport in December on a US warrant and is fighting extradition on charges that she conspired to defraud global banks about Huawei's relationship with a company operating in Iran.

CNEX's allegations last week are the latest in a trial dating to 2017. One of CNEX's co-founders, Ronnie Huang, had worked for a Huawei subsidiary in Texas but left in 2013 and later helped found CNEX.

In 2017, Huawei sued CNEX and Huang alleging that the startup's inventions were related to work Huang had done at Huawei and that it had a right to the patents under a contract Huang signed. CNEX in turn alleged that Huawei was seeking to use the court case itself to obtain deeper access to its technology through the discovery process.

Last week, the court denied Huawei's claims to ownership over CNEX's patents, ruling that California law, which gives workers broad leeway to leave their employers and create new companies, applied to that part of Huang's contract. CNEX still faces claims from Huawei that Huang improperly recruited his former Huawei co-workers to join his new company.

© Thomson Reuters 2019

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