Law & the Courts

Feds Open Criminal Case against Huawei over Alleged Trade-Secret Theft

A man walks past a Huawei shop in Beijing, China, December 19, 2018. (Thomas Peter/REUTERS)

Federal prosecutors are pursuing a criminal case against Chinese telecommunications giant Huawei over the alleged theft of American tech companies’ intellectual property, the Wall Street Journal reported Wednesday.

The investigation, which is expected to result in indictments in the near future, was sparked by a number of civil lawsuits brought against Huawei, including one focused on the appropriation of T Mobile’s “Tappy,” a device used to test smartphones. A jury in Seattle found Huawei civilly liable in May 2017 for stealing the proprietary technology that T Mobile relied on to develop the “Tappy.”

“Huawei has stolen that technology. It used that stolen technology to develop and improve its own testing robot, which it uses for its own benefit,” reads the complaint filed by T Mobile when the suit began in September 2014. “Huawei abused its relationship as a phone handset supplier for T-Mobile to obtain access to T-Mobile’s robot and, in violation of several confidentiality and nondisclosure agreements, copied the robot’s specifications and stole parts, software, and other trade secrets.”

News of the criminal investigation came just moments after a bipartisan group of senators introduced a series of bills that would ban the sale of U.S. microchips and other industrial components to Huawei.

“Huawei is effectively an intelligence-gathering arm of the Chinese Communist Party whose founder and CEO was an engineer for the People’s Liberation Army,” Senator Tom Cotton (R., Ark.), one of the bill’s sponsors, wrote in a statement. “If Chinese telecom companies like Huawei violate our sanctions or export control laws, they should receive nothing less than the death penalty — which this denial order would provide.”

The legislation would also prohibit the sale of U.S. parts to Chinese telecom giant ZTE, reinstating a ban Congress lifted in April after the company agreed to pay a $1 billion fine for violating the U.S. embargo on trade with Iran.

Most Popular

White House

The Impeachment Clock

Adam Schiff’s impeachment inquiry is incoherent. Given the impossibility of a senatorial conviction, the only strategy is to taint the president with the brand of impeachment and weaken him in the 2020 election. Yet Schiff seems to have no sense that the worm has already turned. Far from tormenting Trump and ... Read More
Economy & Business

Who Owns FedEx?

You may have seen (or heard on a podcast) that Fred Smith so vehemently objects to the New York Times report contending that FedEx paid nothing in federal taxes that he's challenged New York Times publisher A. G. Sulzberger to a public debate and pointed out that "the New York Times paid zero federal income tax ... Read More

The ‘Welfare Magnet’ for Immigrants

That term refers to a controversial concept -- and a salient one, given the Trump administration's efforts to make it harder for immigrants to use welfare in the U.S. A new study finds that there's something to it: Immigrants were more likely to come to Denmark when they could get more welfare there. From the ... Read More