9/13/2004 -- Last week, Cisco Systems Inc. quietly settled a lawsuit against Huawei Technologies Co. Ltd — also known as Huawei America, or FutureWei Technologies — that it first filed in January 2003.

In the suit, Cisco charged Huawei with copying and misappropriating source code, documentation, command line interface, and other intellectual property, including no less than five patents for proprietary routing protocols.

As part of the terms of the settlement, Huawei reportedly agreed to discontinue sales of products that infringe on Cisco’s intellectual property.

According to Jeff Ogle, a principal analyst for carrier infrastructure with Current Analysis Inc., the settlement is a big win for Cisco, largely because it helps to codify property rights, which previously were assumed only in the abstract. “[I]t helps establish the intellectual property rights and protection under the law of other aspects of a product than those specifically covered by a patent,” he writes. “Since the suite covered the Command Line Interface (CLI) including screen displays and even user technical documentation as well as some patent infringement issues, this is an important win for Cisco.”

At the same time, Ogle notes, Cisco has also served notice to other would-be intellectual property offenders. “[Cisco] establishes its seriousness in protecting intellectual property from infringement, especially by direct competitors. Huawei is a major competitor in the Asia market and thus has the resources, international experience and potential upside to go up against Cisco, even in an American court,” he notes, adding that “the nature and willingness of Huawei to comply is an indication of the weakness of its position and a desire to cut its losses.”

The upshot, Ogle notes, is that many of Cisco’s direct competitors could be in a world of trouble. “[The settlement] establishes Cisco’s legal right to its CLI that has become almost an industry de facto standard,” he writes. “The result of this lawsuit has ramifications for many vendors that like to claim their CLI is Cisco-like. Vendors that have concisely copied the CLI will need to rethink this strategy and at least modify their existing implementation to avoid any potential lawsuits.” -Stephen Swoyer