Motorola Solutions files cross-appeal against Hytera, seeks permanent injunction again

Motorola Solution again will seek a permanent injunction that could prevent Hytera from selling a large portion of its DMR portfolio as part of the Motorola Solution cross-appeal of the recent Hytera appeal of the $543.7 million judgment by a federal in March 2020.

In the March 2020 judgment, U.S. Federal District Court Judge Charles Norgle affirmed a unanimous jury finding that Hytera should pay $764.6 million for its use of DMR trade secrets and copyrighted software developed by Motorola. Norgle reduced this initial award amount to $543.7 million in January, noting that collecting $220.9 million of the original ruling “would constitute a double recovery.”

Hytera appealed this award and several other findings made by Norgle to the U.S. Court of Appeals for the Seventh Circuit—the Chicago-based appeals court serving Illinois, Wisconsin and Indiana—earlier this month. Motorola Solutions yesterday served notice that it has filed a cross-appeal with the Seventh Circuit Court.

Norgle sided with Motorola Solutions on most of the higher-profile decisions associated with the case, but not all. Most notably, Norgle denied a Motorola Solutions request for a permanent injunction that would have prohibited Hytera from selling much of its popular DMR portfolio worldwide.

In its notice of cross-appeal, Motorola Solutions states that it will as the appeals court to reconsider the permanent-injunction request, as well as Norgle’s orders reducing the award amount, denying a Motorola Solutions motion for supplemental damages, and denying the Motorola Solutions requested amount for prejudgment interest.

The cross-appeal also covers “all other others resolving post-trial motions in a manner in any way adverse to Motorola, as well as rulings, orders, findings, [and] conclusions,” according to the filing.

Motorola Solutions’ cross-appeal is a response the appeal filed two week ago by Hytera, which is asking the Seventh Circuit to reconsider ”all rulings, proceedings, orders, findings and decisions (whether oral or written)” associated with Norgle’s March 5, 2020, judgment against Hytera.

Hytera’s appeal also contests other findings in the lengthy case, including Norgle’s ruling last month that Hytera must pay Motorola Solutions $51.13 million in pre-judgment interest. The appeal contests some rulings that have not been quantified yet, including a ruling that Hytera must pay Motorola Solutions post-judgment interest payments and ongoing royalties on DMR sales that are still to be determined.

Although the royalty payment has not yet been determined, Hytera is appealing Norgle’s ruling that a royalty-payment scheme is necessary, as well as a similar ruling regarding Hytera paying Motorola Solutions’ attorney fees in the case, which was first filed in March 2017.

Many industry sources have been monitoring the royalty decision closely, noting that high royalty payments to Motorola Solutions could make it difficult for Hytera DMR products to compete in the marketplace while still generating the kind of profit margins that Hytera has enjoyed from such sales for roughly the past decade.

Meanwhile, it is unclear exactly how the district court can ensure that the money Hytera owes via the court ruling would be paid to Motorola Solutions. Hytera’s U.S.-based entities that were subject to the initial lawsuit—Hytera America and Hytera Communications America (West)—filed for Chapter 11 bankruptcy in May 2020. The new Hytera US entity—established during the Chapter 11 bankruptcy—is not a party to the lawsuit and will not be responsible for royalty payments.

As a result, both Hytera and Motorola Solutions agree that Hytera Communications—the Hytera parent company based in China—will be responsible for all royalty payments, when that payment scheme is determined.

During the federal-court trial that began in November 2019, 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.