Judge Denies Hytera’s Request for New Trial, Reduced Damages in Theft of Trade Secrets Case
Thursday, October 22, 2020 | Comments
A federal district judge denied a request from Hytera Communications for a new trial, as well as judgement as a matter of law and reduced damages, in a lawsuit brought against it by Motorola Solutions.

In 2017, Motorola filed a lawsuit against Hytera in the U.S. District Court for the Northern District of Illinois, alleging that Hytera had stolen its trade secrets and integrated them into its digital mobile radio (DMR) products, which it then used to compete against Motorola. In February, a jury awarded Motorola $764.6 million in damages, after determining that Hytera had stolen the trade secrets.

In response Hytera filed motions asking District Judge Charles Norgle for a new trial, as well as reduced damages and judgement as a matter of law on several issues.

Hytera argued in court briefs that it deserved a new trial because the initial trial contained a variety of errors, including the improper admission of witness testimony and evidence from Motorola, remarks made by the court that prejudiced the jury against Hytera, improper jury selection procedures that led to a biased jury, and Motorola attempts to stir up alleged anti-China sentiment, that prevented it from having a fair trial.

Norgle reviewed the testimony of Motorola’s experts and ruled that Hytera’s characterization of the testimony was incorrect and determined that the testimony did not create prejudice against Hytera.

“None of the above alleged errors, alone or in concert, resulted in an outcome that was inconsistent with substantial justice,” Norgle wrote.

Hytera argued that the court had treated Motorola’s witnesses with deference while continually challenging Hytera’s own witnesses, which prejudiced the jury against Hytera and its witnesses.

“The court will not list every instance that Hytera has included in its briefing, but having reviewed these alleged improper statements, disagrees that any of these statements made in the administration of this lengthy trial were improper or prejudicial,” Norgle wrote. “The court was evenhanded in the administration of this three-month trial, and the court uniformly required parties to conduct the case with the requisite formality demanded in federal court.”

On the jury issue, Hytera contended that jurors in the case had not been properly vetted for whether or not they had anti-China bias.

Norgle ruled against that assertion, noting that both parties in the trial were allowed to interview the jurors during selection. In fact, Norgle wrote, one question asked was whether jurors felt that Chinese companies tended to steal from U.S. companies. Both jurors who answered yes to that question were dismissed.

“Hytera now argues that the brief deliberations by the jurors is evidence of bias on the part of the jury,” Norgle wrote. “The brief deliberations, however, are better explained by the voluminous evidence presented by Motorola in proving its claims, and a trial with a pride of competent counsel performing at commendable levels.”

For those reasons, Norgle disagreed with Hytera’s argument that the trial was prejudicial and denied its request for a new trial.

“Simply put, the court disagrees, and Hytera has not met the high standard for judgment as a matter of law, or for a new trial, or for a reconsideration of previous orders or remittitur under Rule 59e,” Norgle wrote in his order. “The jury and court were not biased, the procedures in this case were proper, the legal decisions were correct and the legal elements of Motorola’s claims were met, and the jury returned a verdict and award that are proper under the law and supported by overwhelming evidence that was submitted at trial.”

Under Rule 50(a), a party in a legal proceeding can ask for judgement as a matter of law if an issue has been fully heard during a jury trial. A court can enter judgement as a matter of law if it finds that a reasonable jury would not have a “legally sufficient evidentiary basis” to find in favor of a party on an issue. Norgle denied Hytera’s motion for a judgement as a matter of law.

Norgle wrote that Hytera identified three main arguments as to why it is entitled to judgment as a matter of law in the case because Motorola did not provide sufficient evidence to support its case:
• Motorola did satisfy the elements of a trade secret claim because it did not sufficiently specify which trade secrets it contends Hytera took.
• Motorola’s trade secret claims were barred by statutes of limitations.
• Motorola failed to state a copyright claim.

On the claim that Motorola did not satisfy the elements of a trade secret claim, Norgle disagreed, ruling that Motorola had met the legal standard for each trade secret claim.

“For each alleged trade secret, Motorola tied certain documents to that specific trade secret and explained those documents through five fact witnesses and numerous experts across more than 25 hours of testimony,” Norgle wrote. “… The fact witnesses went into detail when explaining what was contained in each document and how the processes contained therein combined into a coherent whole to create the digital radio functionalities at issue in the trial.”

On the statute of limitations defense, Hytera argued that the statute had passed and although that statute can extend further if a party is not aware of the theft of trade secrets, Motorola should have known by as early as 2012 of the alleged thefts.

Norgle once again agreed with Motorola’s defense on that claim.

“Moreover, Motorola presented evidence related to the investigation it conducted, after which it concluded that no issue existed,” Norgle wrote. “Motorola provided sufficient facts to allow this question to go to the jury, and the jury was well informed of both party’s arguments and found that it believed Hytera had concealed the theft. The legal instruction on the issue was correct, and Hytera failed to show that no reasonable jury could find for Motorola on this point.”

On the copyright claim, Hytera said Motorola had failed to prove similarities between the accused work and its copyrighted work, arguing that Motorola had not distinguished between protected and unprotected similar elements in the products.

“Hytera’s argument on this point is contradicted by the record,” Norgle wrote. “Motorola identified the code that Hytera copied from each version of Motorola’s DMR and mapped the copying to the asserted work. As Motorola points out in its response, Hytera solely points to its expert’s testimony related to several lines of code that are allegedly similar to third-party code. This ignores other code that was shown to the jury, including notably, code which contained identical misspellings at points. From exhibits and testimony presented to the jury, the court cannot overturn the verdict.”

Finally, Hytera had asked for reduced damages in the case, arguing that some of the amounts were too high. Hytera described the jury’s verdict as “monstrously excessive.”

Hytera argued that when it comes to disgorgement, where a company can receive damages for profits or other benefits another company receives for using its proprietary materials, the jury’s decision on damage awards is merely advisory and the court can make a different decision.

Hytera said that the $136.3 million Motorola was awarded under the Copyright Act, the $135.9 million it was awarded under the Defend Trade Secrets Act (DTSA) and the $73.6 million awarded for savings that Hytera made on avoided research and developments should be determined by the court because they are equitable in nature, making the jury’s decision equitable.

Norgle determined that under case law, that some of the awards under the DTSA, relating to lost profits from Hytera actions, were properly determined by the jury under instructions given to them and expert testimony related to those damages.

However, the court determined that the copyright and avoided R&D damages awarded by the jury were equitable in nature under law and therefore only an advisory verdict. Specifically, those damages were tied not directly to Motorola’s losses but from gains and savings Hytera received by using Motorola’s proprietary information.

“In this respect, the copyright award was simply disgorgement of Hytera’s profits — not, like with the DTSA actual loss award, a measure of what sales Motorla would have made if Hytera had not stolen its materials,” Norgle wrote.

Norgle noted that while those damages awarded were advisory, the court agreed with the damages awarded by the jury, and said he would issue a separate order that will specifically address those damages.

The court also ruled against Hytera’s other arguments regarding the damages and confirmed all the damages awarded to Motorola.

“Consistent with the above, the court rejects each and every argument raised by Hytera in its renewed Rule 50(b), Rule 59(a) and Rule 59(e) motion and denies the motion in its entirety, except as to the issue of the advisory jury verdict on the equitable issues,” Norgle wrote.

“Motorola Solutions is pleased by Judge Norgle’s decision to reject Hytera’s motion for a new trial, upholding the jury’s verdict that Hytera misappropriated Motorola’s trade secrets and infringed Motorola’s copyrights, as well as the jury’s award of over $764.5M to Motorola,” a Motorola Solutions spokesperson said. “Motorola Solutions is proud to be a pioneering technology and innovation leader, and we remain committed to vigorously pursuing our patent infringement, copyright infringement and trade secret theft lawsuits against Hytera.”

A Hytera spokesperson said it plans to appeal the decision.

"Hytera is very disappointed by the district court's refusal to reduce the damages awarded or, at a minimum, to order a new trial," the spokesperson said. "Hytera will appeal this ruling and any other adverse decisions to the motions still pending before the district court to the United States Court of Appeals, Seventh District. During this legal porcess, Hytera will continue to provide the same outstanding support it always has to both its dealers and customers."

Both parties are also waiting on Norgle’s decision on a Motorola request for a permanent injunction that would prevent Hytera from selling and distributing products determined to include Motorola’s trade secrets. It is unclear when Norgle will make that decision. Would you like to comment on this story? Find our comments system below.

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