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Huawei and Cisco’s Source Code: Correcting the Record

Last week, I wrote about statements made by Charles Ding, Huawei’s Senior Vice President and Chief Representative in the U.S., Mr. Ding explained the 2003-2004 intellectual property litigation between Cisco and Huawei as follows: “Huawei provided our source code of our products to Cisco for review and the results were that there was not any infringement found and in the end Cisco withdrew the case . . . the source code of the issues was actually from a 3rd party partner that was already available and open on the internet.”

In my blog, I let Huawei and Mr. Ding know that Cisco would waive any confidentiality provisions from that litigation  so the world could learn what really happened and suggested they publish the expert’s report from the litigation.   Huawei and Mr. Ding have so far ignored my offer.  Under the agreement that resolved the litigation, we are entitled to act on our own, so we now do so.

Two things are clear about the Cisco – Huawei dispute:

  • The litigation was between two private companies, not between governments. It’s not about the US or China and we respect the efforts the Chinese government is making to increase intellectual property protection.  Rather, this dispute involved a very simple claim that one company used the other’s trade secrets and copyrighted materials without permission.
  • Unlike the smartphone patent battles, where parties try to protect and grow their market share by suing each other over broad patents where no direct copying is required, let alone even knowledge that a patent exists, this litigation involved allegations by Cisco of direct, verbatim copying of our source code, to say nothing of our command line interface, our help screens, our copyrighted manuals and other elements of our products.

The agreement that ended that lawsuit allows either party to make a reasonable response to improper or impermissible statements by the other.  Mr. Ding’s statements of two weeks ago indeed misstate the facts and therefore merit a direct, factually accurate and proportionate response. Rather than providing Cisco’s interpretation of the facts, we think it better simply to set forth the facts themselves.  To that end, the following are verbatim excerpts from the Neutral Expert’s Final Source Code Report, dated June 15, 2004:

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Cisco Suggests Huawei Release Court Report on Intellectual Property Misuse

Recently,  Mr. Charles Ding, Huawei Corporate Senior Vice President and Chief Representative in the United States spoke publicly about Huawei’s use of Cisco’s intellectual property.

While Huawei’s statements were in a context unrelated to the competitive relationship that Cisco and Huawei have, they nonetheless bear directly on issues that anyone concerned about fair competition in the networking industry ought to be thinking about. Mr. Ding contended that Cisco’s litigation with Huawei in 2003 and 2004 was unjustified. This is the litigation in which Cisco claimed unauthorized use of Cisco’s source code in Huawei products.

Mr. Ding said: “If I remember well, that happened in 2003, when Cisco sued Huawei for intellectual property rights infringement …at that time, Huawei provided our source code of our products to Cisco for review and the results were that there was not any infringement found and in the end Cisco withdrew the case…this is the basic situation of that case.”

When asked, “didn’t Huawei admit that Cisco’s code was in your equipment?”, Mr. Ding stated, “As specifically to the source code, the source code of the issues was actually from a 3rd party partner that was already available and open on the internet.”

In fact, within a few months of filing suit, Cisco obtained a worldwide injunction against sale by Huawei of products including our code for a Cisco-proprietary routing protocol called EIGRP, and Huawei publicly admitted that the code had been used in their products and they pledged to stop.  They even said they had removed that code from the products voluntarily prior to the judge’s action.  After the injunction was issued, Huawei agreed to an expert review of the balance of its code, above and beyond the EIGRP module.  More than a year later, the litigation was indeed concluded.  What happened in the interim, how many reports a court appointed expert released, and what was done as a consequence, were all covered by a confidentiality agreement.

Our legal advisers tell us that given Mr. Ding’s statements, we would be justified in releasing the full report.  To facilitate the understanding about what actually happened in the litigation and allow Huawei to itself clear up any confusion, we waive any confidentiality requirement for the report and suggest that Huawei itself have the expert’s complete final report put into the public domain.   Fair competition, indeed, requires transparency of business practices and a respect for intellectual property rights.

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Healthy Competition Makes Us Stronger

In business, competition makes us stronger. Through competition, we strive to create the best products for our customers, the best programs for our partners, and the best Cisco for the networking industry as a whole.

We embrace healthy competition with competitors such as Avaya, HP, Huawei, and Juniper Networks. Each of our competitors brings its strengths, innovations, and programs to address a variety of customer and partner needs.

Cisco’s customers and the networking industry have benefited from this competitive environment through innovations which make the network faster, greener, and more powerful:

  • This week’s news about the Cisco’s expanded ASR 9000 system to deliver a single, simplified system for high-speed business, residential, and mobile connectivity
  • Catalyst 6500 with a new supervisor engine, helping to increase network throughput from 720 Gbps to 2 Tbps, a threefold jump
  • The industry’s first Universal Power Over Ethernet for the Catalyst 4500, which means lower power consumption
  • Less wireless interference thanks to Cisco’s CleanAir technology

Of course, with more than 80% of our business flowing through our partners, we recognize that we cannot just focus on earning market share, but we must also work hard to earn your loyalty every single day.

It’s Cisco’s goal to create the most successful and profitable partners in the world.

As the Next Cisco takes shape, we are re-focusing, reorganizing, and becoming stronger and leaner. We’re focused on five key corporate priorities and, as always, maintaining trust with our customers and partners remains top of mind for me and for the entire executive team, as Rob Lloyd highlighted in his blog post this week.

Together, we had many successes over the years, and you’ve done a great job helping us tell our story.

Here are just a few highlights from Cisco partners: Read More »

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