Hytera sues Motorola Solutions for anticompetitive behavior, hampering access to dealers

Hytera Communications yesterday filed a lawsuit in federal court alleging that Motorola Solutions is maintaining its monopoly in the land-mobile-radio (LMR) sector by engaging in anticompetitive practices, such as forcing dealers to stop offering Hytera products and filing “sham litigation” against Hytera.

At the heart of Hytera’s complaint is the allegation that Motorola “engages in de facto exclusive dealing with independent distributors through a potent ‘carrot and stick’ combination of incentives for exclusivity and threats of termination for those who seek to promote competing products” that “defeats the independence of the dealer,” according to the lawsuit.

These practices by Motorola Solutions make it difficult for Hytera to compete in U.S. market, according to Mark Jordan, regional sales manager for Hytera Communications America (West).

“Hytera doesn’t sell direct—we will, on occasion, if it’s required to participate in something—but we only have one sales channel, and that sales channel is dealers,” Jordan said during an interview with IWCE’s Urgent Communications. “We don’t have manufacturers’ representatives. We’re direct to our dealer base, which is our only channel.

“Our main concern is that channel is being influenced and pressured to not do business with us, and that’s really our only way to the market. That’s our biggest concern, that our only source to get to customers is basically being intimidated not to allow us to get to customers. That’s our biggest statement.”

Other allegations in the Hytera lawsuit include claims that Motorola Solutions has violated terms of the Sherman Antitrust Act and the Clayton Act, inflated prices unnecessarily and used its monopoly position to suppress the introduction of technologies such as TETRA and DMR from being used in the U.S. for public-safety communications.

In addition, the Hytera complaint describes Motorola Solutions as a “savvy and serial abuser of the judicial system and regulatory process as part of its scheme” to maintain its monopoly position in the LMR market. In its lawsuit, Hytera notes Motorola Solutions’ complaints against it that have been filed in U.S. courts, the U.S. International Trade Commission (ITC) and multiple international courts that Hytera describes as “baseless” and “sham litigation.”

In those complaints, Motorola Solutions claims that Hytera illegally has been using Motorola Solutions’ patented technologies and trade secrets that were stolen by former Motorola employees who left the company and joined Hytera almost a decade ago.

Motorola Solutions provided the following statement today in response to the Hytera legal action.

“We believe Hytera’s complaint is without merit and a clear attempt to shift attention away from the heart of the dispute—Hytera's brazen theft of our trade secrets and willful infringement of our patents,” according to the Motorola Solutions statement provided to IWCE’s Urgent Communications.

“We will continue to vigorously pursue our ongoing global efforts to stop Hytera's egregious behavior and protect our intellectual property.”

In its lawsuit, Hytera contends that Motorola Solutions should have been licensing two of the patented technologies cited in its legal filings, because those technologies are part of the DMR standard and should be available to all manufacturers at terms that are “fair, reasonable and non-discriminatory.”

But the Hytera lawsuit’s most pointed claims against Motorola Solutions are allegations that Motorola Solutions is using its dominant market position—controlling 75% to 80% of the market—to convince dealers to sell only Motorola Solutions products.