US Slaps More IP Theft and Sanctions Charges on Huawei

The US Department of Justice (DoJ) turned the heat up on Huawei on Thursday by filing new charges of racketeering and conspiracy to steal trade secrets.

The new charges build on a January 2019 23-count indictment against Huawei, its affiliates and CFO Meng Wanzhou which accused the Chinese firm of conspiracies to break sanctions on Iran and to steal trade secrets from T-Mobile USA, as well as wire fraud and other charges.

The latest superseding indictment focuses again on Huawei and subsidiaries Huawei Device, Huawei Device USA, Futurewei Technologies and Skycom Tech, as well as Meng, who is founder Ren Zhengfei’s daughter and remains in Canada under house arrest awaiting extradition to the US.

It alleges a “decades-long effort” by the company and its subsidiaries to misappropriate IP from six US companies including “trade secret information and copyrighted works, such as source code and user manuals for internet routers, antenna technology and robot testing technology.”

The means by which the Shenzhen giant is alleged to have done this will be familiar to China-watchers: entering into confidentiality agreements with the IP owners and then breaking them by misappropriating the IP, recruiting employees of the US firms to steal the IP, and using third-parties like professors to obtain and pass across the tech.

It’s even claimed that, on one occasion in 2004, a Huawei employee broke into a trade conference at night to take photos of a rival’s networking device, although the company maintains the man was acting alone.

The DoJ claimed Huawei ran an employee bonus scheme to reward those who obtained competitor information. It alleged that by gaining access to non-public IP for router source code, phone antenna tech and robotics, Huawei was able to cut its R&D budget and accelerate development, giving it an unfair commercial advantage.

There are also new allegations centered around sanction-busting business activity in Iran and North Korea, and apparent attempts by Huawei to keep this a secret, as well as lying about Huawei’s relationship to Skycom and trying to obstruct the DoJ investigation.

Huawei is claiming the charges are based largely on “recycled civil disputes from the last 20 years that have been previously settled, litigated and in some cases, rejected.” It argued in a statement sent to Infosecurity that they are an attempt to damage the firm’s reputation for reasons related to competition rather than law enforcement.

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