Cisco Halts Huawei Suit, Brings Settlement Closer


Cisco Systems said Wednesday it has agreed to temporarily halt its pending copyright litigation against Chinese networking vendor Huawei Technologies, bringing the companies closer to settling the suit.

Voluntary changes made by Huawei to source code and user manuals for some of its router and switch products will be reviewed by an independent expert. The successful completion of that review will lead to the end of the suit, the companies said in a statement.

Huawei will also continue to abide by a June preliminary injunction issued by the U.S. District Court in Marshall, Texas, that prohibited the sale of products that contained the disputed source code.

3Com, which is forming a joint venture with Huawei and had intervened in the lawsuit, has also agreed to the established terms, said Ron Friedman, associate general counsel at 3Com, Marlborough, Mass., adding that Cisco and Huawei have petitioned the court to suspend the suit for six months.

The agreement reflects no admission of guilt by Huawei, Friedman said. "It represents a desire by all parties to avoid further litigation," he said.

San Jose, Calif.-based Cisco in January filed the suit against Huawei and two of its U.S.-based subsidiaries claiming that the companies copied Cisco's operating system source code and technical documentation, infringing on at least five Cisco patents.

The litigation thus far has not impeded 3Com's work with Huawei, Friedman said.

This week, 3Com introduced its new Router 5000 family of midrange products, jointly developed with Huawei, and has already begun shipping its Switch 7700 Layer 3 modular LAN switch for campus core applications, a Huawei product being sold under the 3Com brand name.

The 3Com-Huawei joint venture is awaiting final regulatory approval from the Chinese government, expected by the end of November, Friedman said.

The joint venture will have little competitive impact on Cisco in the short term but could eat into the networking giant's market share in the long term, said Mark Fabbi, vice president at research firm Gartner.

To successfully push the new wares into enterprise accounts and pose a challenge to Cisco, 3Com will need to build up its solution provider ranks with more systems integrators and national partners, bolster its services organization and re-establish some direct touch from its sales force, Fabbi said.

"They have a lot of work to do over the next year," Fabbi said.