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Huawei fights Cisco's injunction request

Huawei Technologies is fighting Cisco Systems' effort to bar the company from selling in the US several products allegedly based on stolen trade secrets.

In a court filing, Huawei argued that it has taken sufficient steps to remove Quidway switches and routers, the products to which Cisco has objected, from the US market.

Huawei's filing was a response to a recent Cisco memorandum supporting its request for an injunction against the Chinese network equipment maker. In the filing, Cisco seized on Huawei's admission that some source-code copying had occurred, after what Huawei characterised as an employee's unauthorised acceptance of Cisco source code obtained by an outside party.

"Huawei seeks to avoid the issuance of an effective injunction, commensurate with the scope of its unlawful conduct, by dismissing its infringement as isolated deeds of low-level employees which … has now 'voluntarily' remedied. The evidence paints a much different picture," Cisco said in its memorandum.

In addition to copying significant sections of source code used to run Cisco routers, Cisco charged that Huawei also illegally incorporated publicly available but copyrighted Cisco material into its products, .

Such widespread use of Cisco's technology could not have happened "without the highest level of management knowing about the misappropriation and condoning it", the company said.

Cisco also maintained that Huawei's decision to pull its Quidway switches and routers from the US market, the products that included the disputed operating-system code, is a smokescreen that does not negate the need for an injunction.

Huawei's attempts to correct acknowledged infringements have been half-hearted and sloppy, Cisco said, charging that Huawei continues to distribute outside the US code based on illegally obtained material.

Huawei's response filing reiterated its contention that Cisco's primary motivation for the lawsuit is to protect its "substantial profit margins and its dominant market share" in the US.

"Cisco's reply looks backwards, making repeated attacks on products that Huawei has already ceased distributing and that Huawei has neither the incentive nor intention to ever distribute again," Huawei said.

Huawei does not posses the allegedly stolen source code and never engaged in the code duplication Cisco claims, the company said.

Huawei defended some acknowledged product similarities by arguing that they exist not as evidence of copying but because of technical steps Huawei took to circumvent anti-competitive measures.

For example, both sides agreed that under one version of Huawei's router operating system, its routers identify themselves as Cisco routers.

During testing, Huawei said it discovered that Cisco routers operated differently when they detected Huawei routers, causing performance degradation and inhibiting compatibility. Performance returned to normal, though, if Huawei's router identified itself as one from Cisco - so Huawei programmed its routers to use a Cisco ID, Huawei said.

Initially filed in January, Cisco's lawsuit against Huawei gained intensity in February when Huawei signed a joint venture with 3Com for global distribution of networking equipment.

"Huawei's focus, along with its joint venture partner 3Com, is on offering customers a compelling choice and products with superior price performance. Cisco's motion seeks to prevent Huawei from selling its products in the US market and is no more than an attempt to stifle competition," Huawei said last week.


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