3Com JV partner admits copying Cisco code

26 Mar 2003

Huawei Technologies, the Chinese network equipment manufacturer which last week created a joint venture with 3Com, has conceded that it used some of Cisco’s source code in its own products.

The admission appeared in court papers filed by the company in response to a lawsuit brought by Cisco in the US District Court for the Eastern District of Texas. The networking giant alleges that Huawei has infringed at least five of its patents and copied its Internetwork Operating System source code, using it in the operating system for Huawei’s Quidway routers and switches.

In its defence, Huawei said that copying was accidental and on a much smaller scale than Cisco alleges. Cisco maintains that Huawei copied up to 1.5 million lines of code but Huawei says an employee transferred only 2pc of this amount of code inside Huawei’s gear and that this was done in error.

Huawei claims the “limited amount” of code was supplied by an unidentified third party and then inadvertently incorporated into its software by a Huawei employee.

Based in Shenzhen, China, Huawei is well established in Asia and is aggressively expanding into other markets, including the US. However the ongoing legal action with Cisco has raised doubts about the future of the joint venture company, 3Com-Huawei, announced last week.

Under the terms of the agreement, 3Com will have the right to sell 3Com-Huawei’s products under the 3Com brand everywhere in the world except China and Japan. In those markets, 3Com-Huawei will sell both the former Huawei networking product line as well as the existing 3Com product line based on an OEM (original equipment manufacturer, ie, a company that has a special relationship with computer producers) agreement between the 3Com-Huawei and 3Com.

Huawei’s contribution to the joint venture comprises enterprise networking business assets, including local area network switches, routers, engineering, sales/marketing resources and personnel and licences to its related IP (internet protocol). 3Com’s contribution includes US$160m in cash, assets related to its operations in China and Japan and licences to its related IP.

“The joint venture’s products will neatly complement 3Com’s existing portfolio,” said Bruce Claflin, 3Com’s president and chief executive officer, who will serve as chairman of the new company. “3Com-Huawei delivers a high-end extension to our existing products, allowing us to offer complete solutions to our customers.”

By Brian Skelly