Huawei pleaded not guilty to charges of stealing trade secrets from T-Mobile in the first hearing of a federal case that comes amid a U.S. crackdown on the Chinese smartphone giant.
In a short hearing in federal court in Seattle Thursday, Chief District Judge Ricardo Martinez set a trial date of March 2, 2020. The long wait for the beginning of the trial is due to the complexity of the case and the large of volume of evidence collection that will be required.
“This is a complex case, more complex than many cases that have come before the court, and there will be voluminous discovery materials,” Assistant U.S. Attorney Todd Greenberg said in court Thursday.
U.S. attorneys and Huawei’s team from global law firm Steptoe & Johnson declined comment following the hearing.
Prosecutors filed a pair of indictments against Huawei in federal court that were unsealed last month — one in Washington state and one in New York. The Washington indictment comes nearly two years after a jury awarded T-Mobile $4.8 million in damages in a long-running trade secrets dispute centered around a smartphone testing robot that caught the eye of federal authorities.
The 10 charges against Huawei include theft of trade secrets, wire fraud and obstruction of justice. The theft of trade secret charges include maximum penalties of five years of “organizational probation” and fines of up to $5 million, or three times the value of the trade secrets.
The Washington case dates back to 2014, when T-Mobile filed a lawsuit in U.S. District Court in Seattle, alleging Huawei stole designs and parts of the company’s top secret cell phone testing robot, nicknamed “Tappy.” The robot is designed to simulate the touch of a human finger, so that T-Mobile can test devices that it plans to carry, helping to develop maintenance plans and find ways to lower device return costs.
The jury found that Huawei misappropriated Tappy but didn’t do it in a “willful and malicious” manner. But the jury also said T-Mobile didn’t suffer major losses due to the misappropriation of Tappy and declined to award T-Mobile the $500 million in punitive damages it was seeking.
The New York indictment includes several counts related to bank fraud and wire fraud and accuses Huawei of doing business with Iran in a way that violated sanctions.
One of the defendants named in the New York indictment, Huawei CFO Wanzhou Meng, was arrested Dec. 1 in Vancouver B.C. The U.S. is now seeking to extradite Meng, and Canada’s deadline to decide whether to go along with the request is tomorrow.
Huawei is the top supplier of telecommunications equipment in the world and the second biggest smartphone maker, trailing only Samsung. The U.S. has put up barriers to keep the company from growing here, due to its close ties with the Chinese authorities and concerns that it would share customer data with the government.
The U.S. has been urging allies to ban Huawei as charges of espionage activities, trade secret theft and other allegations surface. However, these efforts haven’t hurt Huawei globally, as the smartphone maker passed Apple in market share for the first time last year and saw phone shipments increase 30 percent in 2018.
Huawei is investing heavily in next-generation 5G technology, igniting a race between U.S. and Chinese companies to own the future of the internet. The competition is strong within the U.S. as well, as T-Mobile seeks to merge with Sprint to beat out the top two phone carriers, Verizon and AT&T, in the development of 5G.
Here is the full indictment against Huawei:
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