Hytera requests new trial, Motorola Solutions seeks permanent injunction in federal-court case
Hytera Communications is asking for a new trial and a drastic reduction in a $764.6 million judgment against it, while Motorola Solutions seeks a permanent injunction prohibiting Hytera from selling much of its portfolio of DMR portable radios, according to filings in the lengthy trial between the companies.
Attorneys for both LMR companies are scheduled to make presentations Friday before U.S. District Court Judge Charles Norgle of the Northern District of Illinois, but the messages will be very different, based on documents filed with the court last week.
Hytera is requesting a new trial, stating that it was “denied a fair trial” in the three-month proceeding that resulted in a unanimous jury verdict that included an award of $345.8 million in compensatory damages and $418.8 million in punitive damages to Motorola Solutions, which was affirmed by Norgle in early March. The jury determined that Hytera should pay Motorola Solutions for stealing trade secrets and copyrighted software code in developing most of its DMR portable radios.
During the trial, Hytera attorneys acknowledged that three former Motorola [the company had not yet changed its name to Motorola Solutions at the time] employees—Samuel Chia, Y.T. Kok and G.S. Kok—accessed more than 7,000 Motorola documents prior to each of them leaving and joining Hytera shortly in 2008. However, Hytera attorneys described the three engineers as “bad apples” who did not share with anyone else at Hytera that the DMR trade secrets and software were taken from Motorola.
If a new trial is not permitted, Hytera attorneys argue that the award to Motorola—reportedly described by a Hytera attorney as a “bankrupting amount”—should be reduced significantly.
“The jury verdict meets the definition of monstrously excessive, because it exceeds Hytera’s total profits for all products—not just accused products,” according to Hytera’s filing. “Motorola asked the jury to award $345.8 million as a measure of unjust enrichment. This figure purportedly captures all of Hytera’s profits from the accused products. Hytera’s total profits covering the same time period, 2010 to 2019, for all products—not just accused products—is $265 million. This is $80 million less than the unjust enrichment amount Motorola obtained from the jury.
“The fact that the jury awarded more in unjust enrichment than Hytera’s total profits company-wide demonstrates that the verdict is excessive and must be reduced.”
In contrast, Motorola Solutions asks that the financial award that China-based Hytera should pay should be increased by including the profits that Hytera has realized during the time since the trial started, interest and attorney fees.
More important, Motorola is seeking a permanent injunction that would prohibit Hytera, its distributor and dealers from selling, marketing or distributing the DMR portable radios that utilize Motorola Solutions’ trade secrets and copyrighted software worldwide. Issuing a worldwide injunction—as opposed to one that only applies to the U.S.—is an appropriate finding under the Defend Trade Secrets Act (DTSA) of 2016.
“Hytera stole Motorola’s trade secrets and copyrighted code and used them to enrich itself from sales of products using that stolen intellectual property around the world,” according to a Motorola Solutions filing. “The DTSA applies ‘outside the United States’ if any ‘act in furtherance of the offense was committed in the United States,’ and the Copyright Act’s predicate act doctrine supports application of that statute to infringing conduct outside the United States.
“Because Hytera’s illegal conduct has continued unabated around the world—and will continue, absent an injunction reaching its sales abroad—a worldwide injunction should issue.”
Hytera attorneys contend that any action taken by the court should be limited to the U.S.
“As Hytera previously explained, Motorola waived any claim to extraterritorial damages under the Copyright Act by repeatedly acknowledging that its damages were limited to Hytera’s U.S. profits, including in the pretrial order and even after resting its case,” according to a filing by Hytera.
Hytera has stated its belief that the injunction request by Motorola Solutions is excessive.
“In effect, Motorola seeks a broad-ranging injunction that would cut Hytera off at its knees—an injunction
that is far in excess of what any equitable principles could support,” according to a Hytera filing.
Under the proposed briefing schedule submitted by both companies—subject to Norgle’s approval—the final briefs in the case would be filed on May 14.
Hytera plans to appeal the case, if the current judgment remains in place, according to a Hytera spokesperson.