Cisco wins narrow ruling against Huawei

A U.S. federal judge Friday temporarily blocked Chinese router vendor Huawei Technologies Co. Ltd. and two related companies from distributing software and user manuals related to Cisco Systems Inc. software or having employees familiar with that software develop similar products.

Cisco sued Huawei, Huawei America Inc. and FutureWei Inc. in January, charging that the companies had copied and misappropriated Cisco software, copied copyright Cisco manuals and infringed Cisco patents. Huawei, based in Shenzhen, China, competes with Cisco in the worldwide market for enterprise and service-provider routers and is a recent entrant to the U.S. market.

The preliminary injunction by Judge T. John Ward of the U.S. District Court for the Eastern District of Texas, in Marshall, Texas, doesn't end the case but defines what Huawei can't do while Cisco's complaints are being weighed.

The injunction keeps Huawei from doing three things:

-- sell or use, worldwide, any operating system that contains or is derived from Cisco's EIGRP (Enhanced Interior Gateway Routing Protocol) source code;

-- use any employee who recently worked with EIGRP in the development of comparable functionality in Huawei's VRP (Versatile Route Platform) software;

-- distribute in the U.S. manuals or online help files that copy or are substantially similar to copyrighted Cisco manuals or help files.

Both sides welcomed the injunction.

"With this ruling, the Court found that the extraordinary circumstances surrounding Huawei's blatant copying of Cisco's intellectual property warrant an equally extraordinary remedy," Cisco said in a written statement attributed to Mark Chandler, vice president and general counsel. In the next phase of the case, Cisco looks forward to having Huawei's source code reviewed to determine the full extent of the copying, the statement added.

Huawei said the ruling was narrow and related to past products.

"Nothing in the preliminary injunction relates at all to new versions of the products. Before Cisco initiated its legal action against Huawei, the company had already taken good faith, voluntary action to proactively remove from the U.S. market the obsolete products outlined in the injunction," Huawei said in a written statement.

"What they (Cisco) asked for was incredibly broad. This is an extremely narrow injunction compared to Cisco's demands. Huawei is happy with the result because it doesn't impinge on their activities and acknowledges they took steps to remove any disputed products on the market," said Susan Etlinger, of Huawei America's external public relations company.

The disputed products have already been withdrawn from sale in the U.S., according to Fu Jin, Huawei's director of corporate communications.

"By the end of last year, we had already stopped selling them in the U.S.," he said, speaking through an interpreter.

In China and Japan, sales of Huawei's enterprise router products will be handled by its joint venture with 3Com Corp.

Routers with a new version of Huawei's operating software, replacing the disputed version, will be available in the future through the joint venture, Fu said.

"Our launch plan for the new version of this product will not be influenced by this because there is no EIGRP in the new version," he said.

(With additional reporting by Peter Sayer.)