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US tech startup accuses Huawei of trying to steal semiconductor technology

U.S. tech startup CNEX Labs Inc. and its co-founder Yiren Ronnie Huang are accusing China's Huawei Technologies Co. Ltd. of using a lawsuit to steal intellectual property and help China achieve technological dominance over the U.S.

The Microsoft Corp.- and Dell Technologies Inc.-backed startup made the allegations in a countersuit in response to a December 2017 complaint filed by Huawei and its unit Futurewei Technologies Inc., which is doing business as Huawei Technologies (USA). Huawei in its lawsuit accused CNEX and Huang, a former employee at Huawei, of stealing its technology and demanded information about CNEX's work.

Huawei alleged that Huang stole its trade secrets and "unlawfully solicited" other Futurewei employees before leaving Futurewei to join CNEX.

Huang, meanwhile, claimed that when he agreed to join Huawei in 2011, Huawei and Futurewei pressured him to sign an unlawful employment agreement as a way to steal his proprietary technology on solid state disk non-volatile memory, or SSD NVMe, which he had already developed prior to joining Futurewei. Huang, however, "carved out his pre-existing technology from the scope of his employment agreement with Futurewei," according to the court filing.

Huang, who co-founded CNEX in 2013, has been named an inventor on nine U.S. patents and 13 pending U.S. patent applications that have been assigned to CNEX.

Scrutiny on Chinese telcos has intensified in recent months, as U.S. lawmakers in June raised national security concerns regarding Alphabet Inc. unit Google LLC's "strategic partnership" with Huawei, highlighting its extensive ties with the Chinese Communist Party.

In August, U.S. President Donald Trump signed the National Defense Authorization Act banning federal agencies from purchasing equipment and services from Huawei and ZTE Corp. on the basis of national security concerns. Within that month, Australia also banned Huawei from providing equipment for its planned 5G mobile network on the basis of national security concerns.