Huawei brand store in Kiev, Ukraine. Photo: viewimage/Shutterstock.com

After a 17-day jury trial, Chinese tech giant Huawei Technologies Co. will walk away with nothing in its suit against a California inventor and his startup company, which also got nothing on a counterclaim.

U.S. District Judge Amos Mazzant of the Eastern District of Texas in Sherman on Thursday ordered Huawei Technologies Co. and a Texas-based subsidiary, Futurewei Technologies Inc., to take nothing in their lawsuit against Yiren Ronnie Huang and CNEX Labs Inc. CNEX also took nothing on its counterclaim against the plaintiffs. According to the court's June 27 judgment in Huawei Technologies Co. v. Huang, which dismissed the litigation with prejudice, each party must pay its own costs.

The plaintiffs alleged that Huang was a Futurewei employee who designed and developed solid-state disk and advanced computing network technology. He left to form a new company, CNEX, and other Futurewei employees left to join the new company. The plaintiffs claimed Huang and CNEX stole the plaintiffs' trade secrets and intellectual property to develop competing products and “usurp” business opportunities, said a May 9, 2018, second amended complaint.

In a counterclaim, CNEX sued the plaintiffs for misappropriation of trade secrets, alleging that Huawei conspired with a Chinese university to obtain one of CNEX's products, purportedly for research, and then the university sent its results to Huawei.

Mazzant's ruling follows a jury verdict issued Wednesday that said Futurewei didn't prove that Huang breached an employment agreement's provisions on nondisclosure of confidential information or nonsolicitation. However, Huang did breach the agreement's patent application disclosure provision, but it caused no harm to Futurewei, therefore the jury did not award any damages, the verdict said. Among other things, the jury found that Futurewei didn't prove that CNEX interfered with the employment agreement between Futurewei and Huang.

On CNEX's counterclaim for misappropriation of trade secrets, the jury found that CNEX proved that Huawei misappropriated trade secrets, but not Futurewei. Huawei's misappropriation did not cause it to be unjustly enriched, though, and the jury did not order Huawei to disgorge any ill-gotten gains.

Seyfarth Shaw partner Andrew Boutros, who represented the plaintiffs, declined to comment.

A statement by a Huawei spokesperson said the company is reviewing the mixed verdict and considering next steps.

“We are pleased that the jury accepted our evidence finding that Mr. Huang violated his employment agreement with Huawei. Although we disagree, we respect the jury's finding for CNEX on its only surviving counterclaim for which they awarded no damages,” the statement said.

Tyz Law Group founder Ryan Tyz of San Francisco, who represented Huang, said his client is ecstatic with the outcome and considers it a complete defense win.

“They hired Mr. Huang for his expertise. He came in and helped them build a product and then they tried to claim ownership and trade secrets based on his prior technology, and I think the jury disagreed with that,” Tyz said.

Tyz said the 17-day trial included testimony by 11 or 12 live witnesses and an additional eight deposition witnesses. He said he feels Huang's personality as a good and likable person came though on the witness stand and resonated with the jury.

“He had a dream ⁠— an American dream ⁠— to start up his own company,” Tyz said. ”He came over from China nearly three decades ago and became an American citizen. One of the reasons he did that is to pursue the dream of being an entrepreneur and inventor. They tried to stop him and effectively crush that dream.”

The Dacus Firm shareholder Deron Dacus of Tyler, who represented CNEX, said his client is also happy with the outcome. Most of the evidence the defense presented to the jury was documents from the time that the events at issue took place, which was three to seven years ago.

“Huawei's version of the trial was very different, in many respects completely opposite, of what their documents said,” Dacus said.