I Spy...A Spy From Huawei?

Ever since it got sued by rival Cisco Systems (CSCO) in 2003 for intellectual-property violations, Chinese networking company Huawei Technologies has been trying to repair its reputation. That may be difficult. BusinessWeek has obtained a July 21 letter from the general counsel of Fujitsu Network Communications to Huawei CEO Ren Zhengfei, claiming that a Huawei employee was caught trying to filch information on rivals' products at a recent trade show in Chicago.

According to the letter, Yi Bin Zhu was discovered after hours in Fujitsu's booth removing the casing from a $1 million piece of networking gear and taking photos of the circuit boards inside. A security guard confiscated the photo card in Zhu's digital camera, along with a notebook containing notes and diagrams of other suppliers' gear. AT&T (T), Cisco, Lucent (LU), Nortel (NRTL), and Tellabs got the letter, suggesting Zhu may have had information on some of their products as well. Zhu was wearing a badge saying he worked for "Weihua," the letter says. But a source says he had a Huawei business card.