CNEX Labs Inc., developer of a transformative architecture for solid state drive (SSD) controllers, today announced that a federal jury has found that Huawei Technologies Co. misappropriated CNEXs trade secrets.
After 18 days of testimony, argument and deliberation in the U.S. District Court for the Eastern District of Texas, the eight-member jury on Wednesday unanimously found that Huawei misappropriated CNEXs advanced, emerging and foundational semiconductor technology. The jury rejected all claims Huawei brought against CNEX, including its allegation that CNEX misappropriated Huaweis trade secrets. Strikingly, the jury found that Huawei had failed to prove that any of its claimed trade secrets were in fact trade secrets.
The jury also rejected Huaweis claims that Yiren Ronnie Huang, CNEX co-founder and chief technical officer, had misappropriated Huaweis trade secrets or improperly solicited employees. While the jury found that Mr. Huang failed to comply with an employment contract provision that he inform Huaweis Futurewei unit about any patents he filed within 12 months after leaving Futurewei, it ruled that Huawei and Futurewei had failed to prove any resulting harm.
This is a victory for the rule of law and for global standards of ethical corporate behavior, said Matthew Gloss, CNEX Vice President, General Counsel and Corporate Secretary. This case was never about money, it was about proving Huaweis wide-ranging scheme to steal our trade secrets and then to weaponize the U.S. Federal Court system against us for purposes of acquiring CNEXs advanced semiconductor technology outside of CFIUS and U.S. export control restrictions.
Huawei filed its claim against CNEX and Mr. Huang in December 2017, and CNEX and Mr. Huang filed counterclaims against Huawei in October 2018.
While this case has progressed over the past three years, CNEXs 150-plus employees have been busy building the next great semiconductor company, said CNEX CEO and co-founder Alan Armstrong. Our technical and market progress can now accelerate. We are excited to be able to direct our resources to building market share rather than to litigation.
CNEXs technology enables a new business model for the SSD market supplying enterprise storage and servers, hyperscale data centers and cloud computing platforms. CNEXs patented, ground-up redesign of traditional SSD controller architecture plus its turn-key SSD design capability allow these customers to procure SSDs customized for their own needs, while reducing their exposure to the cyclical swings in SSD supply that have constrained business growth.
CNEXs SSD controller technologies enable high-volume SSD users to customize their drives to deliver higher throughput, lower power consumption and significantly better QoS (quality of service, measured as low and predictable latency), while achieving improved cost control.
About CNEX Labs Inc.
CNEX is a privately held company founded in 2013 and funded by venture capital and strategic investments from Fortune 500 companies in storage and networking. CNEX delivers innovative storage semiconductor and software solutions, partnering with solid-state storage manufacturers, data center and systems customers to develop revolutionary NVMe and Open-Channel SSD controller ASICs that deliver high-performance with low and predictable latency, scalability and flexibility for software-defined-storage. CNEX controller products are key to accelerating the capabilities of big data computing and analytics for the next generation of cloud, hyperscale and enterprise data centers. For more information, please visit www.cnexlabs.com.
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Summit Strategy Group
Paul Sherer, 415-385-5970