Huawei “Spent All Their Resources Stealing Technology”

(p. B1) On a summer evening in 2004, as the Supercomm tech conference in Chicago wound down, a middle-aged Chinese visitor began wending his way through the nearly abandoned booths, popping open million-dollar networking equipment to photograph the circuit boards inside, according to people who were there.

A security guard stopped him and confiscated memory sticks with the photos, a notebook with diagrams and data belonging to AT&T Corp. , and a list of six companies including Fujitsu Network Communications Inc. and Nortel Networks Corp.

The man identified himself to conference staff as Zhu Yibin, an engineer. The word on his lanyard read “Weihua”—an accidental scramble, he said, of his employer’s name: Huawei Technologies Co.

. . .

(p. B6) A review of 10 cases in U.S. federal courts, and dozens of interviews with U.S. officials, former employees, competitors, and collaborators suggest Huawei had a corporate culture that blurred the boundary between competitive achievement and ethically dubious methods of pursuing it.

. . .

“They spent all their resources stealing technology,” said Robert Read, a former contract engineer from 2002 to 2003 in Huawei’s Sweden office. “You’d steal a motherboard and bring it back and they’d reverse-engineer it.”

. . .

Theft and industrial espionage are relatively common in the global tech industry, and Huawei isn’t the sole company to face accusations of stealing foreign intellectual property. What set Huawei apart, its accusers say, was the flagrancy of its plagiarism.

. . .

“They have made verbatim copies of whole portions of Cisco’s user manuals,” Cisco said in its lawsuit. Cisco manuals accompany its routers, and its software is visible during the router’s operation; both are easily copied, Cisco said.

The copying was so extensive that Huawei inadvertently copied bugs in Cisco’s software, according to the lawsuit.

“Huawei couldn’t release its routers for shipment until it fixed a substantial number of the common Cisco bugs contained in the Huawei routers” for fear of giving away the plagiarism, said former Huawei human resources manager Chad Reynolds in a court filing. Cisco declined to comment.

Cisco General Counsel Mark Chandler flew to Shenzhen to confront Mr. Ren with evidence of Huawei’s theft, which included typos from Cisco’s manuals that also appeared in Huawei’s, according to a person briefed on the matter.

Mr. Ren listened impassively and gave a one-word response: “Coincidence.” A Cisco spokesman said: “As a trusted company, we do not disclose information about private business meetings.”

Huawei settled Cisco’s lawsuit in July 2004, after admitting it had copied some of Cisco’s router software. A month later, Huawei told Light Reading it had fired Mr. Zhu, its man at Supercomm. He couldn’t be reached for comment.

. . .

(p. B7) Rui Oliveira, a 45-year-old Portuguese multimedia producer, told the Journal he flew to Huawei’s Plano offices in May 2014 to meet Huawei executives, who were interested in his patents for a camera attachment to smartphones.

In a conference room, surrounded by a dozen empty chairs, Mr. Oliveira recalls, two Huawei executives listened as he shared data on his product which he hoped to license manufacturing to Huawei. He recommended pricing it at $99.95.

“We’ll talk later,” he says Huawei told him.

Three years later, a friend in Portugal asked him why Huawei was selling “his camera.”

“Huawei? That’s impossible! What?” he remembers saying.

Then he saw pictures: down to its beveled edges and rounded corners, the Huawei product was virtually indistinguishable from Mr. Oliveira’s patent. Huawei’s retail price? $99.99.

“I felt robbed,” Mr. Oliveira said.

. . .

For all the wealth and power Huawei amassed, employees must watch the competition—or face the consequences.

Jesse Hong, a software architect at Huawei’s California unit, said in a lawsuit that his bosses ordered him in November 2017 to use fake company names to register himself for an industry conference organized by Facebook Inc. The social-media giant had invited other companies to a Telecom Infra Project meeting, a collaboration on network design, but excluded Huawei. The suit was confidentially settled in April.

Mr. Hong said he refused to carry out the directive, leading his supervisor to unleash a stream of abuse and a threat: “If you don’t agree on this, then you quit right now.”

After Mr. Hong declined, Huawei fired him. The company says it acted in good faith.

For the full story, see:

Chuin-Wei Yap and Dan Strumpf in Hong Kong with Dustin Volz, Kate O’Keeffe and Aruna Viswanatha in Washington. “China’s Tech Champion— Or Serial Thief?” The Wall Street Journal (Wednesday, May 25, 2019): B1 & B6-B7.

(Note: ellipses added.)

(Note: the online version of the story has the same date as the print version, and has the title “Huawei’s Yearslong Rise Is Littered With Accusations of Theft and Dubious Ethics.”)

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