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-profile 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.
It's common knowledge that piracy, even EDA software is huge in China and it should not come as a surprise. But it is mostly done by smaller companies who don't have a name in the international market. But ZTE hmm, wonder why would they take such risks. There might be some substance in this accusation else who would go to court without evidence. If ZTE violated piracy laws then instead of attacking ZTE the contenders should go after their customers, that will bring the wrongdoer to the table.
It's important to note that these are just allegations at this stage folks. Beyond this particular case, however, we all know that such practices are common place, and extend to all sorts of products and disciplines. I personally think these practices will dwindle away over time as companies from emerging countries (without naming any country in particular :-) ) start competing globally. You cannot be a respected global player in any field while engaging in piracy.
Check out what Altium's Chairman had to say about the company's experience with piracy in China. One hopes things are getting better...maybe not.
I've reviewed some of the details from AWR's complaint (and linked to the complaint itself) in my blog post here:
The allegations in the complaint are pretty specific and paint an interesting picture. The case definitely highlights that significant license revenue recovery opportunities exist when software vendors identify businesses that can and should pay for licenses.
"ZTE owns no legal copies of AWR software, according to the complaint." quote from author. Isn’t that astonished? If it is true, ZTE’s service and/or product created by AWR software will be one of subject in legal action. It may be a huge volume….
And, they came to AWR training class to listen and ask questions. I guess that ZTE engineers didn’t know it is illegal copy or didn’t know it is a bad business practice. They may don’t have such a general culture or understanding about software/IP as a unique product. If it is, it is not going to easily changes within months or years.
I am not an expert for this kind of law. I am not sure ZTE will do any meaningful follow-up action from this filing in CA court.
SVDO, it sounds like you either you don't believe the allegations could have any merit, or that piracy behvior is fair game in an open market. The former would be an ignorant stance and the latter a dangerous one. As mentioned by RK, once you deny the role of the courts you are left with much more barbaric forms of dispute resolution.