Hytera global sales of two-way-radio products still blocked, judge awaits clarity from China court

An injunction halting the global sale of Hytera Communications two-way-radio technology remained in effect on Wednesday, when a U.S. federal district-court judge ruled that the contempt sanctions should be maintained until a Chinese court provides written assurance about the outcome of key lawsuit that Hytera has withdrawn in China.

U.S. District Court Judge Martha Pacold reiterated her decision during a two-hour status hearing—conducted by teleconference—Wednesday with lawyers representing Hytera Communications and Motorola Solutions. Pacold indicated that she remains uncertain whether a three-judge panel in the Shenzhen court in China might issue a written order that could undermine her court’s jurisdiction on the subject of whether the sales of Hytera H-Series DMR products are subject to royalties that must be paid to Motorola Solutions.

No relevant communications from the China court that could clarify the matter have been received since Monday, when Hytera Communications provided information from the Shenzhen court’s instant-message system indicating that the H-Series case in China claiming that a recent oral ruling by the three-judge panel was legally effective. However, this communication came from a clerk or assistant judge with the Shenzhen court, not one of the three judges hearing the case.

Hytera Communications filed the H-Series lawsuit in the China court in June 2022 but did not inform Motorola Solutions or the district court of the litigation until at least the fall of 2023.

Pacold reiterated her concerns that the China court could issue a written ruling that would undermine her court’s jurisdiction in the case. Pacold called on Hytera Communications to ask the Shenzhen court whether it will issue a formal written order in the matter.

Another status hearing on the matter is scheduled for Thursday morning, when any developments in the matter will be reviewed. Such status hearings on the matter have been conducted every day this week, including Sunday.

Under the sanctions, Hytera Communications is prohibited from “offering to sell, selling, importing, exporting or otherwise distributing anywhere in the world any two-way radio products,” according to the injunction issued by Pacold on April 2. In addition, the contempt sanctions require Hytera to post the following statement on the home page of its website: “Notice To Public: By Order Of United States Court, Until Further Notice, Hytera Is Prohibited From Selling Any Products Containing Two-Way Radio Technology Anywhere In The World.”

According to a footnote in the injunction, two-way-radio products are defined as those “containing two-way radio technology, including portables, mobiles, base stations, and repeaters, and includes but is not limited to DMR products (including I-Series, H-Series and any other DMR products), TETRA products, cellular products (e.g., LTE or other push-to-talk-over-cellular products) and analog products.”

Hytera Communications also is subject to fines of $1 million per day, until it is full compliance with the conditions cited in the injunction, according to the language in the injunction.

Pacold repeatedly has noted the severity of the sanctions included in the injunction and expressed the notion that she does not want them to remain in place any longer than necessary. However, the judge also noted that Hytera Communications often has not complied with court orders, unless an injunction blocking Hytera sales has been threatened or implemented.

This sentiment echoed the 7th Circuit Court of Appeals, which is considering the appeal of the judgment issued by the district court—by now-retired Judge Charles Norgle—that Hytera Communications was guilty of stealing Motorola trade secrets and copyrighted software to accelerate its development of DMR products. Hytera Communications owes Motorola Solutions $543.7 million, unless the ruling is overturned or the amount is reduced on appeal.

In an April 6 order, the 7th Circuit Court of Appeals denied Hytera Communications’ emergency motion to prevent the injunction sanctions blocking Hytera two-way-radio sales from being implemented while the matter is appealed. In doing so, the appeals court said the injunction sanctions are the result of “self-inflicted wounds” created by Hytera Communications.

“Hytera has told the district court and this court that it has done all it can to comply with the injunctions and thus should be entitled to removal of the serious contempt sanctions,” according to the appeals-court order. “The district court has made clear, however, that at this stage of the litigation, it simply cannot take Hytera at its word. The district court has therefore required Hytera to prove its compliance with the injunctions.

“Given Hytera’s record of behavior, from the underlying theft of trade secrets and copyright infringement to sanctionable conduct before trial, the post-verdict litigation in this case, the failure to pay royalties as ordered (leading to an earlier contempt finding), filing the long-secret Shenzhen case, and its responses to the injunctions at issue here, Hytera has shown that its unverified representations to the tribunal cannot be trusted.

“To the extent that Hytera is now facing painfully coercive sanctions, it is lying in a bed it has crafted for itself over the past seven years, and in particular, over the last two weeks. Self-inflicted wounds are not irreparable injury and do not require much indulgence from a court of equity.”

Attorneys for Motorola Solutions and Hytera Communications have advocated for opposing positions regarding the injunction and contempt sanctions, it appears they have agreed largely on a schedule for a legal proceeding before Pacold to determine whether Hytera’s H-Series DMR products should be subject to royalty fees. Lawyers for both companies indicated that they would like to complete the proceeding before Hytera Communications has to focus on the criminal case being brought by the U.S. Department of Justice in a trial that is scheduled to begin on Oct. 1.