Huawei Technologies Co. Ltd., a Chinese company, has risen to prominence as a networking and telecommunications equipment provider in the 2000s. Huawei's rise is dotted with intellectual property theft cases. One of these cases is code (software) theft from Cisco Systems Inc., a U.S. networking equipment manufacturer. Huawei acknowledges that it used code from Cisco in its products but pins the blame for code theft on individual software engineers acting on their own.
In January 2003, Cisco filed a lawsuit against Huawei in the U.S. for stealing code from its IOS operating system that ran on its routers and switches [1]. As part of the lawsuit, Cisco alleged that Huawei not only stole code, but that Huawei also copied the IOS command-line interface and the IOS documentation related to the stolen code. In some cases, Huawei's product documentation included the same typos as the ones in Cisco's documentation.
In July 2004, Cisco dropped the lawsuit after Huawei acknowledged some Cisco code in its Quidway routers [2], [3]. Huawei removed the offending code from its products and changed its user interface and documentation as part of the lawsuit process. A third party verified that there was no longer any Cisco code in Huawei's Quidway routers.
Huawei claimed that two of its software engineers acted independently without a corporate mandate to copy Cisco's code. The Huawei engineers are alleged to have received the Cisco code for the enhanced interior gateway routing protocol (EIGRP) from an unidentified source and proceeded to incorporate the code into a Quidway software release [4].
Cisco's case against Huawei was a little muddied by its near-simultaneous effort to buy Huawei [5]. At the time of the lawsuit, Cisco competed with 3COM Inc. in several sub-segments of the networking industry. 3COM had launched a joint venture with Huawei called Future Wei. 3COM rose to Huawei's defense during the lawsuit, even though it was not a party to the case, as restrictions on the sale of Huawei's products would hurt 3COM's business. In a similar vein, if Cisco bought out Huawei, it would gain an advantage against 3COM. Cisco only proceeded with the lawsuit when it failed to persuade Huawei to sell itself to Cisco.
Contrary to its claims during the Cisco lawsuit, Huawei does seem to have a corporate culture of extracting other corporations' intellectual property by "any means necessary." Roughly at the same time as Huawei's software engineers were copying Cisco's code, Huawei was engaged in extracting intellectual property from Motorola [6]. Years later, the U.S. federal government indicted Huawei for stealing intellectual property from T-mobile, a U.S. telecom carrier [7].
Two other corporate behaviors are also relevant. First, Huawei targets personnel, at competitors that it wants to steal from, for hiring. Second, Huawei impedes investigations into its practices by destroying damaging evidence.
In the case of Cisco, Huawei attempted to recruit Cisco's engineers that worked on products that Huawei's Quidway routers were based on [3]. Further, Huawei erased software on the Quidway routers in its possession and attemped to remotely erase the software from devices deployed by third-parties in the US [8]. Finally, Huawei sent back Quidway routers from the US to China so that the devices could not be examined as part of Cisco's lawsuit [8].
Huawei has an opaque ownership structure. Researchers who have peeled back the structure find that the company is effectively a Communist Party of China (CCP) directed enterprise - the only political party allowed in the country [9]. Given CCP's direction of Huawei, it stands to reason that the CCP bears responsibility for Huawei's intellectual property theft from corporations such as Cisco.
[1]: Cisco Sues Huawei. Light Reading. January 23, 2003.
[2]: Cisco Drops Huawei Lawsuit. Phil Harvey. Light Reading. July 28, 2004.
[3]: Huawei Admits Copying. Marguerite Reardon. Light Reading. March 25, 2003
[4]: Cisco Drops Suit Against Huawei. Phil Hochmuth. Network World. July 28, 2004.
[5]: When 3COM Met Huawei. Jeff Chase and Jon Zilber. Fast Company. June 4, 2019.
[6]: Motorola sues Huawei for trade secret theft. Phil Wahba and Melanie Lee. Reuters. July 21, 2010.
[7]: Indictment. Case 2:19-cr-00010-RSM. United States District Court for the Western District of Washington at Seattle. January 16, 2019.
[8]: Superseding Indictment. Case 1:18-cr-00457-AMD. United States Eastern District Court. February 23, 2020.
[9]: Who Owns Huawei? Christopher Balding and Donald Clarke. SSRN. May 8, 2019.
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