Huawei: A California-based IT consultancy sued Huawei and its Pakistani subsidiary, alleging that the Chinese telecommunications company stole their trade secrets and failed to honor a technology development contract with Pakistani authorities.
The complaint, filed Wednesday in the US Court, describes how Business Efficiency Solutions (BES) began working with Huawei to review IT systems available to Pakistani police.
To modernize Punjab’s police, the Pakistani government has invited several companies to submit proposals, including Motorola, Nokia and Huawei. The Chinese company was interested, but said it did not have the technical capacity to supply the required systems.
Therefore, in March 2016, the Chinese company partnered with BES to develop the eight software requested by the authorities. The American company says its work on the project was instrumental in the decision to hire Huawei for $150 million.
Intellectual Property Theft and Espionage Charges
Huawei would have had access to the initial projects and later gave up paying for the service. The lawsuit also alleges that Huawei used the system developed by BES “to create a backdoor and obtain data important to Pakistan’s national security, as well as spying on Pakistani citizens.”
Among the evidence presented is an email from BES, sent on March 28, 2017, asking Huawei for a document that proves the Punjab police’s authorization to store their confidential data in China.
The Chinese company reportedly replied that approval was not required. However, it was later said to have received approval from the Pakistani government but did not provide documentation to that effect.
When the allegations surfaced, Huawei denied the allegations. In 2018, the Chinese company filed an arbitration petition in Islamabad, Pakistan, and obtained an injunction preventing BES from terminating its contract.
In September, BES filed its own arbitration petition to recover damages and is now continuing its lawsuit for breach of trade secret and unfair competition in California.