EDA vendor sues China's ZTE, alleges software piracy

http://www.eetimes.com/electronics-news/4205926/EDA-vendor-sues-China-s-ZTE
--alleges-software-piracy
Dylan McGrath
8/5/2010 6:00 AM EDT
SAN FRANCISCO -- High-frequency EDA vendor AWR Corp. Wednesday (Aug. 4) filed
a complaint in U.S. federal court against China's ZTE Corp. and its U.S.
affiliate, alleging that the company installed and used unauthorized versions
of AWR's EDA software.
AWR (El Segundo, Calif.) charges that telecomm equipment supplier ZTE (Shenzhen
, China) "knowingly and deliberately" circumvented copyright protection mechanisms
to enable the company to use AWR’s software without having to purchase
valid, legal licenses.
AWR said the suit—filed in U.S. District Court for the Central District
of California—was designed to protect its intellectual property. The company
said in a statement that "software piracy in the EDA market space can undermine
the competitiveness of semiconductor, telecommunications and aerospace companies
worldwide."
The complaint alleges that by using AWR software without authorization, ZTE
has avoided paying millions of dollars in license fees.
AWR declined to comment beyond a brief written statement. ZTE could not immediately
be reached for comment.
Software piracy is considered a growing problem in EDA and other software
markets. With the rise of the semiconductor industry in China, where respect
for intellectual property does not carry the same cultural significance
that it does in the West, EDA firms have increasingly been forced to contend
with the reality that a growing number of designers are using their software
without authorization or payment.
The EDA consortium, a trade group that represents EDA firms, maintains an
anti-piracy committee charged with driving increased security and license
management capabilities for the benefit of the industry. Last year EDAC
launched a multi-faceted investigation into EDA software piracy.
The history of EDA is paved with allegations of IP theft, including high-
profit suits like Cadence Design Systems Inc. versus Avanti Corp. in the
late 1990s and Synopsys Inc. versus Magma Design Automation Inc. a few years
ago. But suits like the one filed by AWR—accusing an electronics firm of
wholesale piracy of products—have been rare.
Tech firms have in recent times been getting more aggressive about using
litigation to protect their IP in China. Last month, Motorola Inc. sued Huawei
Technologies Co., alleging a plot to steal trade secrets.
The complaint
In the complaint filed Wednesday, AWR alleges that ZTE has over the course
of several years obtained and used AWR software without authorization. It
alleges that ZTE has obtained AWR software through AWR's website after registering
and agreeing to use the software only for evaluation purposes and obtained
authorized software keys, then circumvented protections within the software
.
The complaint also alleges that ZTE has obtained unauthorized versions of
AWR tools "on websites and through Internet service providers known to traffic
in illegal content."  
ZTE owns no legal copies of AWR software, according to the complaint. But
the complaint alleges that AWR has discovered unauthorized copies of its
software on over 40 computers belonging to ZTE or using Internet protocol
addresses registered to ZTE. The software on the ZTE computers has been
used nearly 300 times, which AWR believes represents only a fraction of unauthorized
uses, according to the complaint.
AWR has also discovered that some of the unauthorized ZTE users have over
time upgraded the version of AWR software they use, according to the complaint
.
The complaint also alleges that at least 14 ZTE employees attended AWR software
seminars in China and that they "asked AWR representatives sophisticated
questions regarding the AWR software that only experienced users would know
how to ask." During one of the seminars, a ZTE employee indicated to AWR
that ZTE intended to use AWR software on an upcoming project."
AWR attempted to resolve the matter with ZTE prior to filing the complaint
Wednesday but was unable to do so, according to the complaint.
AWR's suit seeks an injunction restraining ZTE from using unauthorized versions
of the AWR software and unspecified monetary damages.