U.K. Appeals Court Removes Asset Freezing Order Related to U.S. Case Against Hytera
Tuesday, January 12, 2021 | Comments
A U.K. appeals court set aside freezing orders against Hytera and its U.K. subsidiary that froze the companies’ assets and prevented them from moving them out of the country.

In April, the U.K. High Court approved a request from Motorola Solutions for a freezing order that prevented Hytera from moving up to US$345.7 million in assets out of the country.

That amount was equal to the amount of compensatory damages that a jury in the U.S. District Court for the Northern District of Illinois awarded Motorola in February. In that decision, the jury determined that Hytera had stolen trade secrets from Motorola and used those secrets in its Digital Mobile Radio (DMR) products and that Hytera had infringed Motorola’s copyrights. In reaching that decision, the jury awarded Motorola $764.6 million in damages. Of those, US$345.7 million were compensatory and the rest were punitive.

On January 11, the Civil Division of the England and Wales Court of Appeal set aside the freezing orders the high court put in place against Hytera. The court also denied Motorola’s application for permission to appeal the decision to the U.K. Supreme Court. Additionally, the court ordered Motorola to pay Hytera’s cost of appeal and the remainder of the proceedings.

The initial decision by the U.K. High Court arose from the decision made by the jury in the Illinois case. That decision was focused around evidence of statements that Hytera had made at “without prejudice” settlement meetings in 2019 and whether those statements were admissible.

“The judge’s view was that if the statements were admissible, there was sufficient evidence of a risk that Hytera would dissipate its assets in order to avoid in order to avoid enforcement of a U.S. judgement to justify the making of a freezing order, but that without those statements, the other features of the case on which Motorola relied were not sufficient to do so,” the appeal court’s decision said.

In the original case, Motorola had alleged that Hytera had made statements to the effect that if “Motorola obtained a judgment in the U.S. proceedings which was ‘unacceptable’ to Hytera, then Hytera would take steps to transfer its assets away from western jurisdictions in order to make enforcement of the judgment more difficult.” Hytera denied making those threats.

“The judge held that it was ‘self-evident’ that such a threat, if made, amounted to unambiguous impropriety and, moreover, that he was bound so to hold by the decision of this court in Dora v. Simper,” the ruling said. “He held further that, even though Hytera denied making this threat, it was sufficient to render the statements admissible that there was a ‘good arguable cause’ that they were indeed made as alleged by Motorola.”

Hytera argued that the judge was wrong to reach those conclusions under the U.K.’s rules for without prejudice privilege. The appeals court considered a variety of previous cases in U.K. law and determined that the U.K. High Court should not have admitted the statements from the meeting. The appeal court also reinforced the U.K. High Court’s argument that without the statements, Motorola did not have enough evidence to show dissipation of assets was likely.

“Hytera is pleased by the U.K. appellate court decision to set aside the freezing order against us and our U.K. subsidiary,” a Hytera spokesperson said. “We have continued to invest in the U.K. market to better serve local customers and will keep the tradition of excellence in supporting partners and serving customers in the market.”

A Motorola spokesperson said that the decision would not prevent the company from continuing to protect its intellectual property around the world.

“While we disagree with the court of appeal’s decision, Motorola Solutions respects the legal process in the United Kingdom,” a Motorola spokesperson said. “More importantly, the current decision has no impact on Motorola’s ability to hold Hytera accountable for its theft and infringement of Motorola Solutions intellectual property in jurisdictions around the world. Hytera remains an adjudicated infringer, thief and copyist, as evidenced by multiple court decisions, including the decision of a jury in the United States District Court in Chicago, Illinois, which determined Hytera stole Motorola Solutions’ trade secrets and infringed our copyrights, and awarded $764.6 million in compensatory and exemplary damages to Motorola Solutions. Motorola Solutions is considering all options for further action and will continue to defend our valuable intellectual property, which is a result of significant investments in research and development that have allowed us to continue bringing best-in-class products and solutions to our customers around the globe.”

In December, the Illinois court denied a motion from Motorola for a permanent injunction that would prevent Hytera from selling, distributing or importing products determined to include Motorola trade secrets. Instead, the court awarded Motorola a royalty for Hytera’s continued use of the trade secrets. The court will hold hearings to determine the full amount of that royalty. Hytera will have the opportunity to appeal the case once the post-trial proceedings are concluded.

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