Cisco says Huawei misstated facts in 2003 copyright case

A pedestrian walks past the Cisco logo at the technology company's campus in San Jose, California February 3, 2010.

NEW YORK (Reuters) - Cisco Systems on Thursday accused Huawei Technologies Co Ltd of misstating facts concerning their 2003 copyright infringement case and released segments from what it said was a previously sealed document.

Huawei, the world's second-largest maker of routers, has repeatedly said Cisco's claims were unjustified as the Chinese company had received the disputed source code form a third party.

The company, along with ZTE Corp,, is the focus of a U.S. House Intelligence Committee report that said Beijing could use equipment made by the two companies to engage in espionage and endanger vital systems.

The panel said U.S. companies should stop doing business with Huawei and ZTE, and the committee chairman urged that Canadian companies do the same. Australia, for its part, has banned Huawei from helping build its national broadband network.

Cisco said it was now releasing parts of an expert's report in a blog by Mark Chandler, general counsel at Cisco, "so the world could learn what really happened."

In the segments released it said that "the exactness of the comments and spacing not only indicate that Huawei has access to the Cisco code but that the Cisco code was electronically copied and inserted into (Huawei's code)."

The case between the two companies was eventually dropped.

Cisco Chief Executive John Chambers has said that Huawei does not always play by the rules.

Earlier this year, Cisco Executive Vice President Rob Lloyd said, "We clearly know that our customers view innovation from Cisco and they don't see the same from Huawei. We would clearly say that imitation isn't innovation."

Lloyd also said on the company's earnings call in May, "The privacy of information, how data is protected is forefront in our customers' mind in a cloud-centric world. That's not the forte of Huawei."

In the blog post on Thursday Cisco took pains to make it clear that it did not have a dispute with the Chinese government but rather that it was at odds with a business rival.

"We respect the efforts the Chinese government is making to increase intellectual property protection," the post said.

"Rather, this dispute involved a very simple claim that one company used the other's trade secrets and copyrighted materials without permission."

Cisco has been doing business in China since 1994.

(Reporting by Nicola Leske; Editing by Kenneth Barry)