On July 28, the Shanghai Third Intermediate People's Court issued a landmark ruling in the technology industry: all 14 former Huawei Hisilicon employees of Zunpai Company were convicted for stealing Huawei's chip technology.

The ringleader, Zhang, received a six-year prison sentence and a fine of 3 million yuan, while four others were sentenced to imprisonment, and the remaining nine were given suspended sentences. The total fines amounted to 13.5 million yuan.

The court established that in February 2021, Zhang and Liu, former senior executives at Huawei, established Zunpai Company after departing the company. They enticed several former Huawei R&D personnel to join with promises of high salaries and equity, instructing these employees to illegally obtain Huawei's core chip technology before leaving through methods such as copying and screenshotting.

According to judicial expertise, 40 key technical aspects of the chips developed by Zunpai were virtually identical to Huawei's trade secrets, with an overlap exceeding 90%. This constituted blatant plagiarism and substantial infringement.

This conduct directly resulted in the loss of Huawei's relevant trade secrets, with damages calculated based on R&D costs and anticipated earnings.

In December 2023, Shanghai police, under the unified deployment of the Ministry of Public Security and in collaboration with Jiangsu police, launched a crackdown operation and arrested 14 suspects involved in the case, seizing seven servers containing infringing technology. The unnamed "right holder company" mentioned in the announcement at the time has now been confirmed as Huawei, and the enterprise involved in the case was Zunpai Communications.

Given its involvement in core chip technology, a comprehensive crime chain, and substantial societal impact, the case was designated as a supervised case by the Ministry of Public Security.

Legal experts emphasized that such severe sentences and fines serve as a stark reminder that the country places significant importance on intellectual property rights in key sectors and that no one, especially in the technology industry, should harbor any malicious intentions.

Notably, Xiaomi, as one of Zunpai's investors, was also caught up in rumors surrounding this incident.

On December 24, 2023, Xiaomi Group's official Weibo account issued a statement clarifying: 'Hanxing Venture Capital Co., Ltd., an investment arm of Xiaomi Group, participated in the financing of a chip company in 2022. This was a standard financial investment practice. Multiple rounds of financing for this chip company have been supported by several national and local government industrial development funds, as well as over 20 financial investment institutions. Xiaomi was neither the initial investor nor the largest investor, nor did it play a leading role in multiple rounds of financing. Additionally, Xiaomi does not participate in the direct management or operation of this chip company and has no intellectual property or technological collaboration with the company. ... Xiaomi places great importance on intellectual property rights and firmly opposes the theft of business secrets through illegal means.'