Code Confidential: The V.i. Labs Blog

Is the House Intelligence Committee Right To Worry About Huawei & Software Piracy?

We investigate the US House Intelligence Committee’s charge that Huawei uses pirated software.

software piracy huaweiLast week, the US House Intelligence Committee released a report labeling Huawei a national security threat and possibly in violation of a number of US laws.  Some of the allegations against the Chinese telecom giant are firsthand accounts from former employees suggesting that Huawei “does not appropriately purchase software applications for use by its employees,” or – in other words – that they pirate software.

Critics have charged that the Committee’s report fails to back up its claims with evidence; Huawei has issued a response saying that, “the report released by the committee today employs many rumors and speculations to prove nonexistent accusations.” This despite a history of documented intellectual property infringement cases including:

  • February 2003: Cisco Systems sued Huawei Technologies for IP theft
  • June 2004: A Huawei employee was caught after hours diagramming and photographing circuit boards from Fujitsu

With annual sales of $21.8 billion, Huawei is clearly an aggressive, highly competitive and successful company. This will naturally attract lawsuits and competitor attacks (see Apple v. Samsung). However, since V.i. Lab’s customers see 60% of pirated use coming from Chinese businesses, actual software usage data could reinforce the committee’s concerns.

Using the V.i. Labs Data Service (VDS), our proprietary database of non-compliant organization domains, we decided to see if the firsthand accounts of software piracy were accurate. It turns out that they are. In fact, our database shows Huawei adopting pirated software from a number of our CodeArmor Intelligence customers and that they have a long history of infringing use.
The Intelligence Report clearly points out that “Huawei’s ability to protect intellectual property rights is an important indicator of the company’s ability to abide by the laws of the United States.” Is our finding definitive proof of Huawei’s disrespect for IP rights? Perhaps. Regardless, we do believe that software vendors will have a better way to recoup their license revenues from organizations when they are forced to adhere to better IP practices.
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