Huawei Allegedly Created “Back Door” in Pakistan Project

A dispute between Huawei Technologies Co. and a small U.S.-based contractor has escalated to a federal court, with the contractor alleging Huawei stole its technology and pressured it to build a “back door” into a sensitive law-enforcement project in Pakistan, The Wall Street Journal reported.

According to The Wall Street Journal, the contractor is based on Buena Park, California, and is called Business Efficiency Solution LLC or BES. The company says in a lawsuit that it filed in a California district court that Huawei required it to set up a system in China that gives Huawei access to sensitive information about citizens and government officials from a safe-cities surveillance project in Pakistan’s second-largest city of Lahore.

The Wall Street Journal also reported that chief operating office of the Punjab Safe Cities Authority, Muhammad Kamran Khan, which oversees the Lahore project, said the authority has begun looking into BES’s allegations.

A copy of the lawsuit shows that the case has been filed in the United States District Court Central District of California. Here are some interesting allegations made by BES in the lawsuit:

…After Huawei’s successful bid for the Lahore Project, Huawei gained possession of BES’s most commercially viable trade secrets and other confidential information. Specifically, Huawei obtained BES’s complete software systems, including BES’s proprietary, trade secret “low-level designs” (“LLDs”). Meanwhile, Huawei began to contest its obligations to pay BES for the Lahore project and disputed its obligations to BES in connection with additional Safe City projects under the contract…

Some of the things that BES is asking the court for include “damages in the amount of BES’s actual losses and Huawei’s unjust enrichment; exemplary and punitive damages amounting to twice the sum of actual losses and unjust enrichment for willful and malicious misappropriation’ injunctive relief enjoining Huawei from continued misappropriation of BES’s trade secrets, including LLDs, or a reasonably royalty’ and specific performance requiring Huawei to return all of BES’s proprietary information, including the LLDs, and destroying copies made by, for, and on behalf of Huawei.”

It is unclear when (or if) BES’s legal action against Huawei will make it to a courtroom.