Unsealed ITC Document Offers Insights into Hytera-Motorola Patent Infringement Determination
Tuesday, September 04, 2018 | Comments
The unsealed version of a U.S. International Trade Commission (ITC) judge’s initial determination in Motorola Solutions’ patent infringement case against Hytera offers more insight into the judge’s decision and the alleged theft of Motorola trade secrets by Hytera employees.

In July, Administrative Law Judge (ALJ) Mary Joan McNamara released an initial determination finding that Hytera infringed claims of several Motorola patents. The public version was not released until mid-August so potentially sensitive information could be redacted from it.

In the determination, McNamara determined that Hytera infringed four Motorola patents but determined that one of those infringements did not count as a violation under the technical prong of the ITC’s domestic industry prong.

Under that prong, a complainant before the ITC must prove that it is “practicing or exploiting the patents at issue.” McNamara determined that Motorola did not meet the prong for U.S. Patent No. 8,116,284 “Method, Device and System for Temporarily Selecting a Timeslot” because the Motorola products included in the suit “lack a “default timeslot,” which is a key aspect of the disputed claims of the ‘284 patent.

During the proceedings in the case, Hytera submitted several redesigned products that it said no longer violated the ‘284 patent. McNamara determined that those redesigned products still infringed on the Motorola patent.

McNamara found that the other three patents — U.S. Patent No. 8,279,991 “Method of Efficiently Synchronizing to a Desired Timeslot in a Time Division Multiple Access Communication System;” U.S. Patent No. 7,369,869 “Method and System of Scanning a TDMA Channel;” and U.S. Patent No. 7,729,701 “Method and System of Accessing a De-keyed Base Station” — met both prongs of the domestic industry requirement. McNamara determined that Hytera violated claims of each of those patents.

During the proceedings, Hytera argued that it had not violated the patents and that the Motorola patents were invalid. Hytera argued that a person of ordinary skill in the art would have been able to determine the innovations in each patent based on the prior art — patents issued previously. McNamara rejected Hytera’s validity argument for each Motorola patent.

McNamara devoted several sections of her determination to Motorola allegations that three former Motorola employees downloaded confidential documents containing trade secrets and then went to work for Hytera. Those allegations are part of a theft of trade secrets lawsuit Motorola filed against Hytera in the U.S. District Court for the Northern District of Illinois last year.

McNamara pointed to Motorola testimony and computer access logs that showed in the months before they left Motorola, the employees logged into Motorola’s document management system and accessed thousands of confidential Motorola documents related to its Digital Mobile Radio (DMR) products.

Hytera argued that while Motorola showed that the employees had accessed the documents, it had no proof that they actually downloaded or copied the documents.

McNamara acknowledged that there wasn’t direct proof of the employees copying or downloading the documents but pointed to the fact the employees had accessed far fewer documents in the system in the months prior to their departures. Additionally, at least one of the employees was no longer working on DMR-related projects prior to his departure and therefore would not have a reason to access the DMR documents, she said.

“The figure bears repeating simply to let sink in the sheer magnitude of the number of confidential Motorola documents that the Hytera employees accessed, just before they left Motorola: more than 7,000 documents,” McNamara wrote. “This could not have been coincidental.”

The judge also cited the employees’ responses during depositions, noting that each had invoked his Fifth Amendment right against self-incrimination many times when asked about accessing the confidential documents. In response, Hytera argued that the three employees invoked the Fifth Amendment to avoid waiving their rights in the theft of trade secrets case in Illinois.

“Because of the unwillingness of the Hytera employees to deny under oath that they copied and gave Hytera confidential Motorola information, and Hytera’s apparent complicity in these acts, an adverse inference is drawn here that Hytera intentionally copied Motorola’s patented technologies into the accused products,” McNamara wrote.

She cited the Baxter v. Palmigiano case that found that the Fifth Amendment does not “forbid inferences against parties to civil actions when they refuse to testify in response” to evidence offered against them.

In a statement, Hytera reinforced the Fifth Amendment rights of its employees and attacked a Motorola statement that had highlighted the issue.

“Our competitor sought to highlight in particular our employees’ choice to invoke the Fifth Amendment in addressing repetitive sequences of questions, though doing so is a well-established privilege in U.S. law and a common practice in legal proceedings,” the Hytera statement said.

For sanctions, McNamara recommended that the ITC implement a limited exclusion order (LEO) that would prohibit the importation of the infringing products. McNamara ruled that a general exclusion order (GEO) — which she argued was essentially the relief Motorola requested — was not appropriate in the case.

“The commission may issue a limited exclusion order (LEO) directed against only the infringing products that are found to be in violation, or a general exclusion order (GEO) directed against all infringing products,” McNamara wrote.

Hytera argued that an LEO should only be limited to products that were found to infringe, and that its redesigned products should be exempt from the exclusion order. McNamara said because those products were found to have infringed the ‘284 patent they would be subject to the LEO, as well.

The discussion on the proposed exclusion order does not address McNamara’s determination that the ‘284 patent was not violated despite infringement because the technical prong of the domestic industry requirement was not met.

When asked how the ‘284 determination would relate to the proposed LEO, an ITC spokesperson said she could not discuss or interpret an administrative law judge’s initial determination or anything related to the investigation.

Several of the products determined as infringing the ‘284 patent were also found to infringe one or more of the other patents.

Hytera products that could be impacted by the proposed exclusion order include the MD652, MD782, BD302, BD362, BD502, PD412, PD502, PD562, PD602, PD662, PD682, PD702, PD752, PD782, PD792, PD982, X1e and X1p radios, as well as the RD622 and RD982 repeaters.

One key issue related to the proposed sanctions raised in the case is whether or not Hytera should be allowed to repair and service any systems sold before the LEO goes into effect.

In public interest statements, Hytera and seven of its U.S. dealers argued that Hytera and its dealers should be allowed to repair and service existing Hytera systems because no other company, including Motorola, could properly repair the existing Hytera systems. This would likely lead to public-safety agencies with limited funding having to purchase expensive new systems, the eight companies argued.

“Even though virtually all of Hytera’s legacy accused products have infringed all of the asserted patents and given Motorola’s dominance of approximately (redacted) of the DMR market, it would seem logical that Motorola would be able to service Hytera’s customers in the United States,” McNamara said.

She noted, however, that the commission may not have enough information on the impact of such an action and may need to collect more information from Hytera and Motorola before making a decision on that issue.

McNamara also recommended that the commission implement a cease-and-desist order against Hytera that would prevent it from engaging in activities such as selling or distributing the infringing products.

Motorola argued that such an order was necessary because Hytera could import and stockpile the infringing products prior to the LEO going into effect as a way to circumvent the LEO.

In recommending the cease-and-desist order, McNamara also recommended that the commission include a certification provision in the order. This provision would allow Hytera to certify products that do not infringe the patents, making it easier for U.S. Customs and Border Protection (CBP) to determine which products do and do not fall under the LEO if one is put into place.

McNamara’s initial determination is not final, and Hytera has requested that the commission review the determination. The commission is not beholden to McNamara’s determination and can enter a different decision as its final determination if it finds the facts support such a conclusion.

“The FID (initial determination) and the ALJ’s rulings have not been even-handed,” Hytera’s petition for review said.

Hytera argued that McNamara had improperly excluded Hytera evidence on several issues including the validity of Motorola’s patents because she had determined that Hytera had violated several ground rules she set out in the case.

“… The ALJ struck a good portion of the testimony of Hytera’s expert as punishment for violating a nonexistent requirement in her ground rules, and then finding Hytera waived certain issues, such as arguing Motorola failed to prove infringement,” the petition said.

At the same time, while the judge punished Hytera for violation of the ground rules, she provided unfair treatment to Motorola by allowing it to offer information different than what it provided in discovery, among other issues, Hytera argued. Hytera also argued that McNamara erred in finding that its redesigned products infringed the patents.

“The parties even conducted supplemental expert discovery regarding the redesigned products,” the petition said. “ Motorola chose not to allege infringement of the redesigned products for the ‘869, ‘701 or ‘991 patents, so the FID should have found they do not infringe.”

A public version of Motorola’s response to Hytera’s petition for review has not yet been made available.

“Hytera has built its business by copying the hard work and innovation of Motorola Solutions,” Motorola General Counsel and Chief Administrative Officer Mark Hacker said in a statement. “Judge McNamara’s findings categorically validate the merits of Motorola Solutions’ global litigation against Hytera to stop its improper and illegal behavior. We thank Judge McNamara for both her diligence and the strong, clear language she use to condemn Hytera’s actions.”

In its statement, Hytera reiterated that it does not believe its products infringe the patents and said it is in the U.S. market to stay.

“Hytera remains committed to supporting our U.S. dealers and customers no matter the outcome of this case,” the statement said.

The commission’s final determination on the case is expected by Nov. 6. Because no exclusion or cease-and-desist orders have been released, Hytera can continue to import and sell its products in the U.S.

Once the final determination has been released, U.S. President Donald Trump, or a representative, has 60 days to disapprove the determination. McNamara also recommended that Hytera could continue to sell the affected products during that presidential review period but that it be required to post a bond. If the case then ended in Motorola’s favor, it would receive that bond money to compensate for damages caused by Hytera continuing to sell the infringing products.

Motorola first filed the patent infringement suit with the ITC in March 2017. It was one of many patent infringement suits that Motorola filed against Hytera around the world, including in Germany and Australia.

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