Huawei Technologies loses trade secrets case against U.S. chip designer

FILE PHOTO: A Huawei company logo is seen at a shopping mall in Shanghai, China June 3, 2019. Picture taken June 3, 2019. REUTERS/Aly Song/File Photo

(Reuters) – A U.S. jury on Wednesday cleared California semiconductor designer CNEX Labs Inc of stealing trade secrets from Chinese electronics giant Huawei Technologies.

Huawei had sued CNEX in U.S. District Court in Sherman, Texas, for misappropriation of trade secrets involving a memory control technology and for poaching its employees.

The United States has effectively banned its companies from doing business with Huawei, which claims the firm represents a threat to U.S. security.

A Huawei spokesman said the company was considering its next steps after the decision in Texas and declined further comment.

CNEX had countersued, accusing Huawei of improperly gaining access to its trade secrets by posing as a potential customer of the memory control technology.

The eight-person jury did not award CNEX any damages because it did not have any revenue, a CNEX spokesman said. Huawei’s suit was an effort to acquire “CNEX’s advanced semiconductor technology” through a court action, said CNEX spokesman Paul Sherer.

Huawei had sued CNEX and co-founder Ronnie Huang in 2017 and was seeking at least $85.7 million in damages and rights to the San Jose, California, company’s memory-control technology.

“The things that Huawei claims are trade secrets are not,” CNEX attorney Deron Dacus said in court at the beginning of the trial earlier this month. He further described the lawsuit as “bullying and intimidation.”

U.S. District Court Judge Amos Mazzant, who heard the trade secrets case, separately is overseeing Huawei’s bid to overturn the Trump administration’s ban on its sales to government agencies and contractors.

Reporting by Gary McWilliams; Editing by Sandra Maler and Tom Brown

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