A Tyler lawyer with an office on Loop 323 says he got involved in a case against a Chinese technology company because he thought it was the right thing to do.
In the case, the American arm of a company believed to be close with the Chinese government alleged that a former employee stole trade secrets when he went to start his own company.
The plaintiff was Futurewei, an arm of Huawei (pronounced WA-way), and the defendant was CNEX Labs Inc. Huawei got exactly the opposite of what it asked for: A Texas jury instead said Huawei stole information from CNEX.
Deron Dacus, a native of Gilmer, runs the two-person Dacus Firm on East Southeast Loop 323, with his spouse, Shannon. He spent six months in Sherman defending CNEX in the U.S. District Court for the Eastern District of Texas in partnership with a larger California firm.
“CNEX hired a law firm in California by the name of Farella, Braun + Martel,” Dacus said. “That law firm realized that, to try a case in Texas, they probably needed a Texas lawyer to speak Texan.”
Dacus said the case was an attempt by Huawei to use the discovery process in the U.S. court system — in which plaintiffs can ask virtually any question they want from the defendant to prove their case — to obtain more information about CNEX.
That’s significant because the U.S. House Intelligence Committee in 2012 accused Huawei of being a national security threat that has close ties to China’s government, and advised U.S. companies not to buy from Huawei. This year, the Trump administration added the company to a trade blacklist.
“I’ve told people that I’ve probably felt as strong about this case and the merits of this case than of any that I’ve ever had,” Dacus said. “I felt like this was — and it certainly appeared to be — an attempt by Huawei to get around those laws and regulations, and try to use the U.S. court system to obtain technology, U.S. technology.”
On June 27, Huawei told Bloomberg it was evaluating the verdict. “We are disappointed that the jury didn’t support Huawei’s claims based on the evidence,” Jason Ding, director of the Huawei’s intellectual property rights department, told reporters.
However, Huawei said some surprising things during the case, Dacus said. One of them was that its American arm, Futurewei, is dedicated to research and development, and that any research done with American universities is funneled back to the parent company in China.
Another was the company’s strategy to physically set up shop next to U.S. technology giants and attempt to get those companies’ workers to work for them. The defendant in this case, Yiren “Ronnie” Huang, had previously worked for SandForce and Cisco.
“The evidence showed that Huawei had a consistent pattern of posing as a customer and approaching U.S. companies as alleged U.S. customers and then acquiring information from that U.S. company as a quote unquote customer,’” Dacus added. “They took that information and they shipped it back to China to their manufacturing facility.”
The fight is not over, because now the two parties are fighting over who will pay whose attorney’s fees, if any. Dacus said CNEX spent between $7 million and $8 million in attorney’s fees, and estimated that Huawei likely spent tens of millions of dollars on its Chicago-based lawyers.
“This involved taking three weeks of depositions in Hong Kong,” Dacus said. “Six million documents were produced in the case between the two parties. Well more than half of those were in Mandarin Chinese and required translation. The depositions required interpreters.”
He estimated another six months until there is resolution in the dispute regarding attorney’s fees. But his takeaway was clear.
“Our jury system in the United States, particularly in Texas, is alive and well, and works,” he said.
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