29 January 2019

Huawei charged with trade secrets theft

The US Department of Justice (DoJ) has filed criminal charges against Chinese telecoms manufacturer  Huawei, which is accused of stealing trade secrets from US competitors.

Huawei is facing 23 criminal charges, including accusations that it operated a rewards system for employees to incentivise the theft of trade secrets. The company is also alleged to have stolen robotic parts from  T-Mobile US.

In  a press release issued yesterday, January 28, FBI director Christopher Wray said that “Huawei intentionally conspired to steal the intellectual property of an American company in an attempt to undermine the free and fair global marketplace”.

The indictment comes amid growing tensions between the US and China over trade and alleged IP theft by Chinese companies.

Chinese officials have labelled the charges as “unfair and immoral”. In  a press conference in Beijing yesterday, Chinese Foreign Ministry spokesperson Geng Shuang told reporters that the charges were an attempt to “mobilise state power to blacken the names of and crack down on specific companies”.

“We urge the US to stop its unjustifiable bashing on Chinese enterprises, including Huawei”, he added.

Matthew Whittaker, acting attorney general of the US,  said that the criminal activity “went all the way to the top” of Huawei.

The DoJ charges emanated partly from a civil lawsuit brought against Huawei by T-Mobile in 2014.

A jury at the US District Court for the Western District of Washington found that Huawei employees had stolen technology and information from T-Mobile in 2017.

In the  original complaint, Huawei was accused of exploiting its relationship as a supplier to T-Mobile in order to gain access to a testing robot and copy its specifications.

The DoJ indictment also includes seven counts of wire fraud and one count of obstruction of justice.

Huawei was already under pressure following the arrest of its CFO Meng Wanzhou in Vancouver, Canada last month. She also faces charges stemming from the DoJ investigation, including accusations that she lied to banks and authorities over Huawei’s business dealings in Iran, which is currently under US sanctions.

The DoJ is set to request Meng’s extradition from Canada this month.

Delegations from the American and Chinese governments are set to meet tomorrow, January 30, to continue talks over a new trade deal that could resolve the dispute. IP issues have  reportedly proved a major stumbling block in the negotiations.

WIPR has contacted Huawei for comment.

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10 May 2019   American semiconductor company CNEX Labs has accused Huawei of recruiting a Chinese professor to help steal trade secrets.
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