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Huawei lawsuit against US government is largely strategic, legal experts say

The lawsuit filed by Huawei Technologies Co. Ltd. against the U.S. government is a strategic move which could benefit the company regardless of the eventual ruling, lawyers and legal experts said.

The Chinese company is claiming Section 889 of the 2019 National Defense Authorization Act violates the U.S. Constitution's separation of powers principles. The law prohibits all U.S. federal agencies from buying Huawei equipment. It also bars agencies from contracting with or awarding loans to third parties who buy Huawei equipment.

While the Chinese telecom company faces an "uphill battle" with its lawsuit, Huawei had no choice but to file it.

Had Huawei not filed the suit, the ban against it could have more easily spread to other markets within the United States and other Western countries, said Eric Crusius, partner at law firm Holland & Knight LLP.

The U.S. has already urged foreign ally governments and telecom executives to stop using Huawei products, and Australia and New Zealand have banned use of the company's gear in their 5G network rollouts. The United Kingdom and Germany are among European countries that may consider supporting Huawei. The U.K. National Cyber Security Centre reportedly believes use of the Chinese company's equipment is a manageable risk, while Germany is said to be open to its continued use.

"With the lawsuit, even if unsuccessful, [the company] has a chance to make its case to those other countries and other customers within the United States," Crusius said, adding that Huawei's move to file a lawsuit may even spur other companies in the Asia region to carry out "prophylactic measures."

"Asian telecom companies, particularly those from China, would be wise to educate the leaders in Congress and the executive branch about their independence from China and the countries that the United States see as a threat," Crusius said.

The U.S. court has seen similar cases before. Moscow-based antivirus company Kaspersky Lab in 2018 sued the Trump administration for depriving the company of due process rights and failed. Ralls Corp, a U.S.-based company owned by China's Sany Heavy Industry Co. Ltd., sued the Obama administration in 2014 for failing to following appropriate legal procedures and reached a settlement.

"[Unlike Kaspersky], Huawei filed the suit claiming for the right to defend itself, which is relatively easier to gain support for from the court," said Stephen Peng, senior partner at law firm JT&N. Huawei aims to gain the legal right to operate its business in the U.S., and the lawsuit is part of this strategy, he said.

Huawei's strategy with the lawsuit also includes testing rules set by the U.S. and establishing how much evidence it has against the company, if any. The U.S. government has said it is concerned about Huawei's connection with the Chinese government and charged the company with stealing technology secrets from U.S. businesses, but not yet provided specific evidence.

"The lawsuit is a test to the U.S. judiciary system, in order to see whether the system is as integral or fair as it is claimed to be," said Li Zhaojie, professor at School of Law of Tsinghua University. It is crucial that the public will be able to watch the trial and if the U.S. does not provide substantial evidence to support its use of Section 889 and its charges against Huawei, the world will judge the court, according to Li. However there are many factors, some of which are out of Huawei's control, that can affect the result of the case, Professor Li said.

Senior partner of Lianyue LLP Evan Xian agrees. "Huawei wants to see how many cards the U.S. government is holding," he said. The company has employed elite lawyers and will know there is a "very low chance" of winning, Xian added.

"The lawsuit brings nothing negative to Huawei," said Zhao Yun, head of the Department of Law at the University of Hong Kong. "Whether to win the case or not is not what Huawei is considering," he added.