By Bruce Tomaso
SHERMAN, Texas (Reuters) - A former engineering manager used Huawei Technologies Co Ltd trade secrets and lured away 24 of its employees to improperly build his startup company, a lawyer for the Chinese telecommunications firm told a Texas jury on Tuesday.
The trade secrets trial, which has become a flashpoint in allegations by the United States government that Huawei gear is a threat to U.S. security, began with the Huawei lawyer showing jurors that spelling errors in its internal documents were repeated in proposals a former manager used to start chip-maker CNEX Labs Inc three days after leaving Huawei.
Huawei sued former manager Ronnie Huang and his CNEX seeking at least $85.7 million in damages and rights to its memory-control technology.
Huang, who countersued Huawei and denies the company's allegations, was scheduled to testify on Tuesday.
In addition to showing jurors the documents' common misspellings, Huawei lawyer Michael Wexler played excerpts of a video deposition in which another former employee admitted to copying 5,760 files from his work computer before leaving Huawei to join CNEX.
"Think of the spelling mistakes as DNA," Wexler said in his opening statement to an eight-person jury in U.S. District Court for the Eastern District of Texas. "Stealing technology is wrong."
But a CNEX attorney rejected the allegations and said the spelling errors were identical because the same person, Huang, wrote all the documents. Neither Huang nor CNEX asked for or were aware its recruit copied files, which were largely personal information, said CNEX attorney Deron Dacus.
"The things that Huawei claims are trade secrets are not," Dacus said in his opening statement, describing the lawsuit as "bullying and intimidation."
CNEX develops chips that speed up data storage on cloud computing networks. The countersuit by CNEX and Huang sought $24.5 million in damages from Huawei over development delays and lost future revenue.
Huang started CNEX in 2013 and has raised more than $100 million from backers including arms of Dell Technologies and Microsoft (NASDAQ:MSFT).
The trial promises to keep Huawei in the spotlight amid a U.S. government blacklisting of the company's telecommunications gear and pressure on U.S. allies not to buy its equipment. China last week retaliated against the ban, saying it planned to draft its own list of foreign companies and people it considers "unreliable" for harming Chinese companies.
Judge Amos Mazzant, who is hearing the case, separately is overseeing Huawei's bid to overturn the Trump administration's ban on its sales to government agencies and contractors.