Huawei was “familiarized a hard lesson” after a federal jury in Texas ruled against the Chinese tech giant in a trade secrets carton, Alan Armstrong, co-founder and CEO of U.S. chip designer CNEX Labs, told CNBC on Tuesday.
Yiren Huang, who started CNEX with Armstrong, executed at Huawei immediately before launching the new company. In 2017, Huawei sued the California start-up, accusing Huang of breaching an utilization contract and misappropriating trade secrets. CNEX countersued, claiming Huawei had attempted to steal its technology.
Last Wednesday, jurors establish that, while Huang had violated his employment agreement, it was Huawei that tried to steal trade secrets. The jury did not confer damages to either party.
“I think Huawei was taught a hard lesson by the good people of Texas, and I think we were an effortless fight to pick,” Armstrong said in a “Squawk Alley” interview. “Even though we’re small, we fought a carefully fight. And we won. That’ll send a pretty strong message to Huawei.”
CNEX launched in 2013 and possesses a memory-control technology, which Huawei deteriorated for the rights to. CNEX is backed by Dell and Microsoft.
Meanwhile, Huawei has been a focus of the ongoing U.S.-China trade war, with the Trump direction in May effectively banning U.S. companies from doing business with the Chinese telecom company, citing national insurance reasons. President Donald Trump agreed to soften the U.S. stance toward Huawei at Saturday’s meeting with Chinese President Xi Jinping at the G-20 climax in Japan.
Armstrong declined to say whether he viewed Huawei as a national security threat, but he did say the issue of stealing intellectual possessions is a Huawei problem, not a China one.
“There’s great Chinese companies that we would love to do business with that act with totality,” Armstrong said. “Huawei is a specific case, there may be others, but I don’t think this is a country issue.”
— Reuters promoted to this report.