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Cisco/Huawei Lawsuit on Hold

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Cisco Systems Inc. (Nasdaq: CSCO) has suspended its copyright infringement lawsuit against Chinese equipment provider Huawei Technologies Co. Ltd.

The two companies jointly announced today that they have signed an agreement to put the litigation on hold pending an independent review of Huawei products.

Cisco filed its suit against Huawei last January, accusing the company of violating copyright laws and stealing intellectual property to use in Huawei products and support materials (see Cisco/Huawei Brawl Begins).

Today's agreement is not a settlement, but both companies express hope it will help lead to a conclusion to the dispute.

“We are pleased to reach an agreement that we hope will result in a resolution to the litigation,” says Penny Bruce, a Cisco spokeswoman.

Cisco won a preliminary injunction against Huawei back in June (see Cisco Wins Huawei Injunction). As a result, the court ordered Huawei to stop distributing user manuals or online help files that contain material copyrighted by Cisco. It also prohibited the Chinese company from selling products that use a portion of Cisco’s source code. But the court did not go as far as Cisco would have liked. It refused Cisco’s broader request to bar Huawei from using any of its router software.

The agreement today takes the preliminary injunction a step further and gives Cisco exactly what it wants. As part of the agreement, Huawei has agreed to update and change all of the products that have been accused of violating copyright or intellectual property rights. Specifically, Huawei has agreed to change its source code, command line interfaces, user manuals, and all portions of the help screen for these products.

Huawei says it had voluntarily made these changes to its products and support material soon after the lawsuit was filed (see Huawei: Cisco Code Is Gone).

The two companies have also agreed to allow an independent expert to review Huawei products to ensure they are in compliance with the agreement. Cisco has asked the court to suspend the litigation for six months while the review process is being conducted. After that point, a decision will be made whether to continue with the litigation or settle the dispute.

Based on Cisco’s previous statements, the company’s primary demand is that the alleged copying be stopped. No details have been provided in terms of what, if any, damages the company is seeking in the lawsuit.

3Com Corp. (Nasdaq: COMS), which is forming a joint venture with Huawei, intervened in the lawsuit earlier this summer (see 3Com Taps Huawei in Enterprise Battle and 3Com Pings Court on Huawei Deal). It has also agreed to the terms outlined today.

“We are pleased that they have been able to reach this agreement,” says Ron Friedman, associate general counsel for 3Com. “And we foresee no impact on the proposed joint venture from what was announced today.”

— Marguerite Reardon, Senior Editor, Light Reading

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User Rank: Light Beer
12/4/2012 | 11:22:17 PM
re: Cisco/Huawei Lawsuit on Hold

User Rank: Light Beer
12/4/2012 | 11:22:15 PM
re: Cisco/Huawei Lawsuit on Hold
It is strange that Cisco would seek the opinion of experts. It could have done the same thing at the time it decided to file a nasty lawsuit against a new company for no reason. Cisco never agreed to let the experts examine the code, documentation abd standards to determine the extent to which Cisco copies from various sources. All user interfaces in a network environment are defined by a set of standards.

As Cisco had demanded that Huawwei not be allowed to do business in the US. I think that Huawei should leave the US market and ask not to do business with Cisco in China. I think this would be fair settlement.
User Rank: Light Beer
12/4/2012 | 11:22:01 PM
re: Cisco/Huawei Lawsuit on Hold
Does it really surprise you that a Chinese OEM is stealing intellectual property? Helllooo?? And I'll bet whatever money I have that 3Com is being taken down the primrose path, too. When the Chinese say, "sure, let's do joint venture," what they are really saying is, "show me how to do this or that, then go away." I'm not a racist or a enthno-centric bigot, but I am a realist that watches pattterns and history pretty well. The Chinese are very eager to stake a claim in the world market and they will do whatever is necessary to achieve that goal, even on the backs of those they purport to be "partners" as long as they don't get caught. Amen.
User Rank: Light Beer
12/4/2012 | 11:21:55 PM
re: Cisco/Huawei Lawsuit on Hold

User Rank: Light Beer
12/4/2012 | 11:21:53 PM
re: Cisco/Huawei Lawsuit on Hold
Dear bear,

you have some good points and I can believe these
are not based on racial or cultural bias. However,
to look at doing business with China as a whole,
I think we can take a more far-reaching view.

True, the Chinese are not playig the game following
our rules, partly because they don't like our rules
and partly because they don't understand the rules
very well. Remember the 70s, when the Japanese
dumped memory devices using prices below cost, in
order to gain US market share? Likewise, the
Chinese will learn the rules gradually. Just like
playing in sports, some rules can only be learned
by playing. Even experienced players commit faults
every once in a while, BTW.

The process maybe slow. However, if you compare
China with 10 years ago, you can see the progress.
They did join WTO, after all. To look at the trend
today, maybe "join them" is a better option for
a lot of US business.

Is it bad for US jobs? You bet, for the short term.
But in the long run, I think everyone's a winner.
Again let me use 70's history. Japanese did
dominate memory market. But Intel switched to micro-
processors! Who ended up better off today?
Everyone - we have better and cheaper memories and

It would worry me that the Chinese and Indians
would dominate in innovations. Maybe that's the part
we should focus on.

Just my 2 cents, thanks.
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