WSJ: Huawei's Yearslong Rise Is Littered With Accusations of Theft and Dubious Ethics

[ThePointblank]

This article was published by the Wall Street Journal, which goes into depth explaining various allegations against Huawei's behaviour, including engaging in theft and intellectual property infringement:

 

https://www.wsj.com/articles/huaweis-yearslong-rise-is-littered-with-accusations-of-theft-and-dubious-ethics-11558756858

 

The article opens with a case from 2004, when Huawei was still a very small player in the networking and telecommunications world. Back in 2004, at the close of the Supercomm tech conference in Chicago, a Huawei employee, Zhu Yibin, was stopped by security after he was noticed to be opening and photographing the circuit boards of network equipment at booths from companies such as Nortel and Fujitsu. There, security found on him and confiscated multiple memory cards full of these pictures, plus a notebook with diagrams and data belonging to AT&T Corp. The employee claimed it was his first time in the US and wasn't aware that the Supercomm conference had a no photography rule.

 

Per the WSJ, after reviewing 10 US court cases, plus interviews with Huawei's competitors, former employees and US officials, they are suggesting that Huawei "had a corporate culture that blurred the boundary between competitive achievement and ethically dubious methods of pursuing it." In many cases, Huawei's ethically dubious methods of trying to catch up or come out ahead of their competitors were systematic throughout the company; for example, in Huawei's Sweden office, after trying to recruit talent from competitors, Huawei increasingly turned to scrutinizing the network hardware of rivals, by stashing foreign-made equipment in an electronically secured basement where only Chinese employees could access. There, equipment was often sent back to China for analysis by Huawei's engineers. These secretive chambers, with the regimented levels of secrecy and security were apparently common throughout Huawei's foreign offices, and it is the belief by intelligence officials that Huawei was handling "information more like a state intelligence service", "while relying on a protected communications channel with Beijing."

 

The WSJ also goes into a 2003 case where Huawei for the first time had to fight a major international allegation of IP theft, when Cisco Systems accused Huawei of copying its software and manuals, with Cisco Systems stating at the time in the lawsuit that Huawei "made verbatim copies of whole portions of Cisco’s user manuals", with some of Huawei's copied manuals containing the exact same typos from Cisco's manuals and since the copying was so extensive, Huawei inadvertently copied bugs in Cisco’s software, according to the lawsuit.

 

Quote

“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.

 

Furthermore, the article goes on and documents cases where Huawei would send HR personnel in Sweden to local bars with stacks of money to buy rounds of drinks for Erickson engineers that were laid off.

 

The WSJ also details a number of cases where Huawei's competitors noticed something amiss with Huawei's actions, and wanted to go after Huawei in court over the matter, but decided against it to avoid making the Chinese government upset:

 

Quote

While U.S. firms doing business with Chinese companies were concerned about tech theft, the potential riches persuaded many to forgo making official complaints about commercial secrets theft, even though many privately sought help from U.S. officials, said David Hickton, former U.S. Attorney for the Western District of Pennsylvania.

 

“That problem had been going on for a long time,” said Mr. Hickton, who worked on a 2017 indictment of three hackers from a Chinese company known as Boyusec that advertised Huawei as a client. The hackers were convicted in absentia. “The companies didn’t want to make waves with China.”

'

Fear of making waves also led senior management at Sunnyvale, Calif.-based optical networking firm Infinera Corp. to pull back from a plan to file a trade case seeking U.S. tariffs to penalize Huawei, says Jeff Ferry, a former executive at the firm. Mr. Ferry says he had compiled evidence a decade ago showing that subsidies from the Chinese state allowed Huawei to underbid competitors by 30% or more. Though Obama administration officials encouraged Infinera to pursue the case, the company’s top brass said doing so could prompt the Chinese government to lock it Infinera out of its market, Mr. Ferry said. An Infinera representative declined to comment.

 

Another case that the WSJ went into was the case with Motorola, which accused Huawei in 2010 in a lawsuit of stealing Motorola’s technology:

 

Quote

One company that did come forward was Chicago-based Motorola—and its accusations enveloped Huawei founder Mr. Ren. After two decades of investing in China, Motorola in July 2010 accused Huawei in a lawsuit of stealing Motorola’s technology for the SC300, a compact base station that connects devices in a wireless network, that could be mounted in enclosed buildings and rural areas.

 

Seven years earlier, a relative of Huawei’s founder who was then working in Motorola, Pan Shaowei, flew with two colleagues to Beijing. The mission, Motorola said, was for Mr. Pan to secretly show Huawei the SC300’s specifications.

Huawei told an Illinois federal court that Mr. Pan briefed Mr. Ren, unsolicited, on his team’s product development, customer response, and plans to leave Motorola. It denied that Mr. Pan and his team were developing products for Huawei. Mr. Pan didn’t respond to a request for comment.

 

Email fragments recovered from Mr. Pan’s laptop and included in Motorola’s complaint show Mr. Pan wrote to Mr. Ren after the meeting, “Attached please find those document [sic] about SC300 specification you asked.” Huawei later made a similarly small device, weighing half the SC300, which it marketed to rural communities in developing markets.

 

U.S. authorities arrested one of Mr. Pan’s alleged co-conspirators, Jin Hanjuan, in February 2007, after stopping Ms. Jin at Chicago O’Hare International Airport with more than 1,000 documents, including Motorola trade secrets, in her bag, and a one-way ticket to Beijing. The FBI questioned Mr. Ren in July that year, though it couldn’t be determined if they discussed the alleged thefts. The Justice Department declined to make available the FBI findings. The U.S. convicted Ms. Jin in 2012 on charges of stealing trade secrets.

 

By then, Motorola had dropped its lawsuit, as China’s commerce ministry prolonged its antitrust probe of Motorola’s $1.2 billion sale of its network equipment business to Nokia Siemens Networks Ltd. Analysts viewed it as retaliation through the ministry, which had a say in the matter because Motorola did business in China.

 

“China took retribution against a number of companies, using antitrust, anti-money laundering, state secrets, a number of things, that sent shock waves through the community,” said Michael Wessel, a member of the U.S.-China Economic and Security Review Commission, a congressional watchdog on national security.

 

Chinese regulators approved the sale of Motorola’s network arm in April 2011—one week after Motorola publicly agreed to make peace with Huawei. Motorola and the ministry didn’t respond to requests for comment.

Motorola, which once ruled the planet in mobile phone technology, was surpassed as Huawei won key contracts, including launching the world’s first 4G network, in Oslo in 2009.

A story with a Canadian connection with Huawei also appears in the article:

 

Quote

Still, allegations of theft persisted. When David Barker, the chief technology officer of Quintel Technology Ltd., an Anglo-American developer of network antennas, attended a meeting with the Canadian network operator Telus Corp. in 2015, the Telus representatives told him about a new technology Huawei offered called “user specific tilt.”

 

Mr. Barker had never heard of “user specific tilt,” which could multiply the number of signals from an antenna and tilt them to provide greater accuracy in communicating with mobile phones.

 

Mr. Barker had, however, heard of a conceptually identical technology, ”per user tilt." He coined it seven years earlier, according to a Quintel lawsuit alleging misappropriation of trade secrets by Huawei. Quintel said it had shared the technology with Huawei in September 2009 after Huawei proposed a business partnership.

 

The partnership never came through. Huawei filed papers to secure a patent for the concept a month after their first meeting, using a document still emblazoned with Quintel’s name and the words “commercial in confidence.”

 

After a three-year court fight, Quintel acquiesced to a legal settlement last year. Brent Irvine, Quintel’s former engineering director, said the deal included “a durable non-disclosure agreement.” Other Quintel executives declined to respond to requests for comment.

 

Scientists including Emil Björnson, an engineering professor at Sweden’s Linköping University, say Mr. Barker’s signal-tilting epiphany—now Huawei’s—represents a building block of technology that forms signals in 5G networks.

 

“Today these are in the networks,” Mr  Björnson said. “They may not call it ’user-specific tilt,’ but that is it in its most elementary form.”

 

Another allegation of unethical behaviour regarding trying to gain access to networking gear from competitors as well:

Quote

Executives at U.S. telecom hardware maker Tekelec Inc. told Obama administration officials that a Brazilian customer had been approached by Huawei with an unusual offer: get free Huawei equipment in exchange for turning over Tekelec gear. People familiar with the offer believe Huawei intended to reverse-engineer the Tekelec products. Oracle Corp. , which purchased Tekelec in 2013, declined to comment.

 

On the phone front, the WSJ also notes a case where Huawei was accused of stealing patents for a camera attachment for a cellphone from an inventor:

 

Quote

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.

 

The Case of the Attachable Camera

 

 

 

Rui Oliveira, a 45-year-old Portuguese owner of a multimedia firm, says he flew to Plano, Texas, in May 2014 to meet with Huawei executives, who had expressed interest in his patents for a camera attachment to smartphones (left, above). Three years later, he was surprised to find Huawei selling a product that he believes is virtually indistinguishable from his invention (right).PHOTOS: US PATENT DOCUMENT

 

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.

 

When he tried to discuss the matter with Huawei, Mr. Oliveira said its executives put up delaying tactics. He threatened a lawsuit.

 

Huawei instead sued Mr. Oliveira in March, asking a Texas court to issue a non-infringement ruling and complaining that Mr. Oliveira had publicized his story to try to gain leverage against Huawei. In court papers the company recapitulated Mr. Oliveira’s assertions but said it didn’t infringe on his patents. The litigation remains unresolved.

 

Also a case of Huawei stealing music from creators:

Quote

Paul Cheever, a bespectacled preschool teacher who records music as The Cheebacabra, said his life has become overrun with paperwork and costs since he sued Huawei in California last year for taking his song “A Casual Encounter” and pre-loading it on Huawei smartphones and tablets for free distribution to its customers.

 

Mr. Cheever said in his court filing that he discovered the alleged theft after noticing user comments on YouTube that associated Huawei devices with his song.

 

Huawei in a filing said Mr. Cheever’s copyright took effect only in August 2018, after Huawei had begun using his music.

 

Mr. Cheever now spends his days making Play-Doh with his students and his nights editing legal briefs at home, with his two cats for company.

 

“It’s a weird feeling having this company take my song and give it away to 100 million people on the devices without my permission,” he says.

 

The T-Mobile case regarding the robot is also mentioned.

 

There's also a number of other cases mentioned, such as allegations of theft of solid-state memory technology to trying to sneak into industry conferences where Huawei wasn't invited.

 

In all, a good overview of the situation with Huawei.

[ravenshrike]

Nooooo, really? A chinese company stealing tech from anyone not smart enough to fully document the meetings or large enough to push back after the fact? I've never heard of such a thing.

[leadeater]

But this is what makes Huawei network and server equipment such a good deal, they come with free life time cloud backup

[RejZoR]

2 hours ago, ravenshrike said:

Nooooo, really? A chinese company stealing tech from anyone not smart enough to fully document the meetings or large enough to push back after the fact? I've never heard of such a thing.

Everyone pretending this is only done by Chinese. Where in reality, EVERYONE does it. Only difference is that Chinese don't give two fucks about the final outcome where the rest plays it safe and just learns from it and then does things from scratch based on that info. The Chinese just copy it and slam it in a product. It's why whole product/brand copycat thing is a thing in China. And laws about that were very lax in China. Things are changing, very slowly, but it was going on for so long it's hard to change the mind set of Chinese businesses.

 

Japan for example was no different and they were notorious to photograph everything from the west and then copy it. But Japan totally flipped over on that and have been doing their own thing for ages now without blatantly copying things anymore.

[Guest]

Huawei has been dropped from the party.

[dfsdfgfkjsefoiqzemnd]

As if other companies aren't doing the same thing.  What did Drumpf promise the WSJ for publishing this?

[Bouzoo]

13 minutes ago, RejZoR said:

Everyone pretending this is only done by Chinese. Where in reality, EVERYONE does it. Only difference is that Chinese don't give two fucks about the final outcome where the rest plays it safe and just learns from it and then does things from scratch based on that info. The Chinese just copy it and slam it in a product. It's why whole product/brand copycat thing is a thing in China. And laws about that were very lax in China. Things are changing, very slowly, but it was going on for so long it's hard to change the mind set of Chinese businesses.

Huawei is a special notorious case here though. As you say, in general, Huawei products were in the beginning much cheaper because they literally copied products hence no R&D cost. But the alleged story goes that the Chinese government gave an ultimatum to Cisco that either they would open some of their tech (or patents, can't remember) for Huawei so they can compete or they would ban Cisco from China. Cisco obviously yielded. I got that from a reliable source but you take that with 0 credibility. 

[Trixanity]

Honestly, Western companies have screwed themselves over. They should have completely shut out Huawei instead of selling themselves and their mother to get into the Chinese market and not defending themselves against theft.

 

They gave it away for pennies and now Huawei (until recently) is making money hand over fist. Huawei played them.

Huawei send their regards.

[Taf the Ghost]

2 hours ago, Bouzoo said:

Huawei is a special notorious case here though. As you say, in general, Huawei products were in the beginning much cheaper because they literally copied products hence no R&D cost. But the alleged story goes that the Chinese government gave an ultimatum to Cisco that either they would open some of their tech (or patents, can't remember) for Huawei so they can compete or they would ban Cisco from China. Cisco obviously yielded. I got that from a reliable source but you take that with 0 credibility. 

China did this with a lot of stuff, actually. They're called "Joint Ventures". It's been worth a couple of trillion in stolen R&D for China. Cars, Trains, Planes and many other things. Only reason they could get away with it is the Financial factions engineered the movement of manufacturing to China and that isn't something that can be stopped easily, so companies had to play along.

 

This article does help broaden some of the factional background around who Huawei has pissed off. They have no "friends" and running their "business intelligence" segment like an actual intelligence operation means you have former intelligence agents involved. But, and this applies everywhere, there's no such thing as a "former" intelligence agents. Without saying it directly, the WSJ is pointing at what this is really about: Chinese Intelligence used their offices are part of their global intelligence network.

 

Basically, the reason why this is happening is that Huawei signed up with Chinese Intelligence so they could build their company. That means they've pissed off all of the rest of the players in the industry & their local intelligence agencies. They got big enough and the global environment changed enough that this is mostly payback. Huawei should be thought of as a Military Contractor and approached as such.

[Taf the Ghost]

24 minutes ago, Trixanity said:

Honestly, Western companies have screwed themselves over. They should have completely shut out Huawei instead of selling themselves and their mother to get into the Chinese market and not defending themselves against theft.

 

They gave it away for pennies and now Huawei (until recently) is making money hand over fist. Huawei played them.

Huawei send their regards.

Some had the choice, while others were forced into it because their politicians sold them out. That's why "populism" is suddenly popular in so many countries. When your political elites are on the pay of other countries, people start to get angry when the consequences add up.

[Nicnac]

3 hours ago, Captain Chaos said:

As if other companies aren't doing the same thing.  What did Drumpf promise the WSJ for publishing this?

Lol I think WSJ hates trump more than Huawei. 

[leadeater]

42 minutes ago, Taf the Ghost said:

Huawei should be thought of as a Military Contractor and approached as such.

Well, so is literally every telecommunications company. There isn't one that isn't.

[Taf the Ghost]

2 minutes ago, leadeater said:

Well, so is literally every telecommunications company. There isn't one that isn't.

There's a difference between Boeing & Blackwater.

[leadeater]

9 minutes ago, Taf the Ghost said:

There's a difference between Boeing & Blackwater.

But there isn't a difference between Huawei and US telecommunications companies, global network intelligence doesn't just happen. And historically, I mean very long term, who exactly was going to supply China with network infrastructure? Who was going to work with China at a government level like any other government? Not any of the US companies or allied nations, for quite a long time they weren't allowed to. So Cisco gets a free pass and allowed access to the global market without political fighting and blocking of access?

 

You'd struggle to name any large multinational corporation that doesn't have significant military contracts.

 

Also I think Boeing was a rather poor choice there, their contributions to military and intelligence aerospace is huge.

[Taf the Ghost]

3 minutes ago, leadeater said:

But there isn't a difference between Huawei and US telecommunications companies, global network intelligence doesn't just happen. And historically, I mean very long term, who exactly was going to supply China with network infrastructure? Who was going to work with China at a government level like any other government? Not any of the US companies or allied nations, for quite a long time they weren't allowed to. So Cisco gets a free pass and allowed access to the global market without political fighting a blocking of access?

 

You'd struggle to name any large multinational corporation that doesn't have significant military contracts.

 

Also I think Boeing was a rather poor choice there, their contributions to military and intelligence aerospace is huge.

Every major infrastructure company does contracts with governments, but there's a difference between "close relationship" and "it's run by members of the intelligence community". The distinction matters. It's the same reason the EU doesn't like Google & Facebook.

 

Still, what's caused this response to Huawei is a change in the political fortunes of a lot of different players, and Huawei is a weak enough player with enough enemies outside of China to do them real harm. It's only going to escalate from here.

[ne0tic]

Interesting...

[duncannah]

who would've thought lol

[leadeater]

23 minutes ago, Taf the Ghost said:

Every major infrastructure company does contracts with governments, but there's a difference between "close relationship" and "it's run by members of the intelligence community". The distinction matters. It's the same reason the EU doesn't like Google & Facebook.

And there is no distinction that Huawei is what you just said, where do you think those insinuations come from? When you have former CIA heads, Micheal Hayden specifically, saying after reading briefing documentation not proving any of these claims that god did not make enough briefing slides to convince him otherwise then that is a dead end to ever finding or telling the truth.

 

What's changed is everyone noticed Huawei is or would be the largest global telecommunications provider and many don't like that. No one gave a damn when they didn't notice that.

 

So far there has been a US tech company lurking in the background of every sanction and proposed legislation. Patent infringement or not if you're the creator of the technology and you're incapable of making a superior product then that falls on yourselves. They have every right to fight the legal side of it as much as they like but if you're not doing better on the product side that rightly looks pretty poor. When you have to spit shine 4G and call it 5GE then you failed, badly.

 

Edit:

And there are former intelligence members in US tech companies and people from the companies go on to work for intelligence agencies. Tech sector is one of the most inbred sectors there is, it's why you never burn bridges and reputation matters so much. 

[TetraSky]

Huawei just can't get a break huh.

 

Inb4, they rebrand themselves as WeiHua in an attempt to escape repercussions because lord knows the rest of the world is too dumb to realize that right (wouldn't be the first time a Chinese company did this).... Either that, or the Chinese gov, with whom they are in bed with, will start pressuring every companies that dared refusing to do business with them.

[Misanthrope]

I am already tired of this Orange Clown vs Winnie the Pooh fight because that's all this is boiling down to: any large corporation is as dirty if you look thoroughly enough, that's called Capitalism.

[BuckGup]

Now write an article of how screwed the WSJ is an how they lie to get more views and started the adpocalypse on YouTube

[Sauron]

 

@Misanthrope imagine if the same standards were applied to 'murican companies

[Sauron]

6 minutes ago, BuckGup said:

Now write an article of how screwed the WSJ is an how they lie to get more views and started the adpocalypse on YouTube

Pretty sure the "adpocalypse" is a consequence of youtube having no integrity beyond their complete submission to corporate interest. I think you're giving the WSJ waaay too much credit.

 

On a side note I think the adpocalypse is a good thing in so far as it contributes to the death of internet advertisements as we know them. Hopefully of the advertisement industry in general - one can dream.

2 hours ago, TetraSky said:

Huawei just can't get a break huh.

 

Inb4, they rebrand themselves as WeiHua in an attempt to escape repercussions because lord knows the rest of the world is too dumb to realize that right

The rest of the world doesn't care, we're just here suffering the consequences of Trump's bullshit protectionist measures.

3 hours ago, Taf the Ghost said:

Still, what's caused this response to Huawei is a change in the political fortunes of a lot of different players, and Huawei is a weak enough player with enough enemies outside of China to do them real harm. It's only going to escalate from here.

Dude, Huawei is one of the most valuable companies in the world and the number 1 smartphone manufacturer (or at least they were until they got cancelled). I wouldn't consider them weak by any stretch.

[BuckGup]

1 minute ago, Sauron said:

Pretty sure the "adpocalypse" is a consequence of youtube having no integrity beyond their complete submission to corporate interest. I think you're giving the WSJ waaay too much credit.

 

On a side note I think the adpocalypse is a good thing in so far as it contributes to the death of internet advertisements as we know them. Hopefully of the advertisement industry in general - one can dream.

Well the only thing that has come out of it is content creators being censored or not got paid. Advertisers don't care at all if their ad is on a video about guns. Their all about the PR and perception like they care yet nothing changed

[Sauron]

1 minute ago, BuckGup said:

Advertisers don't care at all if their ad is on a video about guns. Their all about the PR and perception like they care yet nothing changed

They absolutely care, brand association is crucial in advertising and many companies don't want to be associated to guns, politics (beyond the most bland, cookie cutter pseudo-progressivism) and so on. Why would Youtube care specifically what the WSJ thinks if it's in direct contrast with the interests of their advertisers? That makes no sense.

6 minutes ago, BuckGup said:

censored

Youtube doesn't have the power to censor anyone. As a private platform they get to choose what they want to host and/or pay for - that's not censorship. What it is is an expression of cold corporatism milking the art and education they host, as well as its audience, without respecting any of it and without any regard for quality; that is not illegal or a violation of free speech rights, though it is despicable.