Hytera dealers say recommended sanctions in Motorola ITC case would harm competition, jeopardize their businesses

Nielson also addressed the potential impact that ITC sanctions could have on his company, noting that even rumors of the possibility have had a negative effect.

“I am aware of at least one customer who very recently decided not to purchase Hytera due to Motorola’s tactics [of spreading a false rumor that Hytera can no longer sell products],” Nielson states in the brief.

“An order excluding even some Hytera products would only make this dynamic worse, because it would have a ripple effect: if dealers like Nielson have an incomplete Hytera product line to compete with exclusive Motorola dealers, that will impact the dealers’ viability. In fact, the recommended order, if adopted, would put Nielson’s business at risk.”

A brief from New York-based MicroMagic President Felix Vayner states that his company’s business also would be “at risk,” if the ITC adopted the sanctions against Hytera that were recommended by McNamara.

Briefs from Warner Communications, Marcus Communications and Eagle Communications each said that implementation of McNamara’s recommended sanctions would “severely limit our ability to serve the public.”

Typically, the ITC commission makes its rulings within four months of an administrative law judge’s determination, with the ruling often becoming effective within a few days after the ruling is announced. However, the U.S. president—currently Donald Trump—has up to 60 days to review the ITC commission’s ruling and potentially overturn it, if the president deems it to be in the public interest.

If ITC commissioners decide not to review the determination, McNamara’s recommendation that Hytera be prohibited from importing and selling the identified DMR product would become the rule of law, subject to a potential presidential review by Trump. If the ITC commissioners do not review the case, the ruling could become effective much earlier than Nov. 6.

If ITC commissioners choose to review the case, they would consider McNamara’s recommendation and the evidence from the proceedings in the matter, but the commissioners are not bound by McNamara’s determination that Hytera should be prohibited from importing and/or selling products associated with the alleged patent infringement. ITC commissioners can reach a different finding than the administrative law judge, suggest a different remedy or return the case back to McNamara, according to multiple sources.

An ITC ruling that reverses McNamara’s findings would let Hytera Communications continue to sell its current product portfolio in the United States.

An ITC commission ruling against Hytera Communications that calls for the company to stop importing patent-infringing goods into the U.S. or being sold in the country typically would become effective with a few days of the ruling being announced.

Despite this effective date, the Hytera products theoretically could continue to be imported and sold in the U.S. during the 60-day presidential review. However, during this time, any sales could be subject to a bond—sometimes as much as 100% of the product’s value—that would be paid to the complainant, which is Motorola Solutions in this case. As a practical matter, such a bond often discourages the company that is being penalized from trying to sell infringing products in the U.S. during this time, according to a source familiar with ITC proceedings.

McNamara’s determination recommends the inclusion of such a bond, if the matter reaches the presidential-review stage.

Sources familiar with the Hytera-Motorola Solutions dispute indicate that customers with Hytera equipment and systems that utilize any of the infringing patented technologies would be able to continue using their existing systems, even if the ITC and President Trump uphold McNamara’s findings and recommendations.