Motorola Gets Another Response to Hytera’s Motion to Dismiss
Wednesday, August 23, 2017 | Comments

A U.S. district judge allowed Motorola Solutions to file a second reply to a motion by Hytera Communications to dismiss a theft of trade secrets lawsuit filed by Motorola earlier this year, after Motorola argued that Hytera raised several new arguments in defending its motion.

In March, Motorola filed theft of trade secrets and patent infringement lawsuits against Hytera in the U.S. District Court for the Northern District of Illinois. In the trade secrets case, Motorola alleged that three former Motorola Malaysia employees had stolen proprietary information and then went to work for Hytera and helped Hytera develop products with the proprietary information. The patent infringement case is on hold as a similar case filed by Motorola with the U.S. International Trade Commission (ITC) is resolved.

In May, Hytera filed a motion seeking dismissal of the theft of trade secrets case, arguing that the lawsuit was overly vague and the statute of limitations had passed. Motorola and Hytera then traded responses on the motion to dismiss.

Generally, once a motion is filed, the other party has an opportunity to respond to that motion followed by a reply to that response by the party that originally filed the motion. In some circumstances, a court will allow the other party an additional sur-reply to address new arguments or issues raised in the other party’s reply.

In its request, Motorola argued that in Hytera’s response to Motorola’s reply to the motion to dismiss, Hytera had raised two new arguments that it wanted to address. Judge Samuel Der-Yeghiayan granted Motorola’s request to file a sur-reply Aug. 16.

The first of the two issues was Hytera raising the Maxtech Consumer Product vs. Robert Bosch Tool case, which was decided in the same district court, as support for showing that the publication of a patent by a competitor means that a company should have been aware of a patent violation.

Hytera cited that case as an example for its argument that the statute of limitations had passed in the case. Under both the Federal Defend Trade Secrets Act and Illinois Trade Secrets Act, the clock on the statute of limitations begins when a violation is discovered or the violation should have been discovered “by the exercise of reasonable diligence.”

Hytera argued that the publication of a patent for one of the products Motorola alleges used its trade secrets meant Motorola should have been aware of the potential violation and used the Maxtech decision as support for that argument.

Motorola argued in its sur-reply that the Maxtech case did not support Hytera’s argument, noting that in that particular case, the court was addressing a motion for summary judgment and not a motion to dismiss.

Additionally, the Maxtech court did not explicitly say that the publication of any patent was enough to provide notice of the violation and therefore start the statute of limitations, but that the stolen technology at the heart of the case was simple enough that the publication of the patent made it obvious the technology had been stolen, Motorola said in its sur-reply.

Unlike the Maxtech case, the patent in the Motorola-Hytera case only showed that one of the former Motorola Malaysia employees had been involved in the development of that product, which was not enough to make Motorola aware of the alleged thefts, the sur-reply said.

Motorola also addressed Hytera’s request for a discovery phase focused specifically on the statutes of limitations if the judge denies the motion to dismiss. This would allow Hytera to file a motion for summary judgment, when a judge makes a decision on the case without a full trial.

“… Defendants’ request to stay these proceedings on all issues but statute of limitations is inappropriate and should be denied for a number of reasons,” the sur-reply said.

The request would slow down the case by dividing discovery on overlapping issues, and Hytera could still gather the information it seeks on the statute of limitations while everything else moves forward at the same time, Motorola said.

Additionally, the extended time period for discovery would be prejudicial to Motorola because the “ongoing misappropriation” of trade secrets continues to harm Motorola while the case continues, Motorola said.

Der-Yeghiayan has not offered a timeline for when he will make a decision on Hytera’s motion to dismiss.

In addition to the U.S. cases, Motorola has filed three lawsuits against Hytera overseas. Motorola filed lawsuits in the German regional courts of Dusseldorf and Mannheim. A Hytera reply to the complaint in the Dusseldorf case is due in October. A reply deadline has not been set in the Mannheim case, which was filed last month. Additionally, Motorola filed a patent infringement case against Hytera in the Federal Court of Australia. An initial hearing in that case was originally scheduled for Aug. 29 but was delayed until Sept. 5.

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