Judge Transfers Hytera-Motorola Anticompetitive Practices Lawsuit to Illinois
Wednesday, December 12, 2018 | Comments

A magistrate judge for the U.S. District Court of New Jersey transferred an anticompetitive practices lawsuit Hytera Communications and its subsidiaries filed against Motorola Solutions to the U.S. District Court for the Northern District of Illinois.

Earlier this year, Motorola filed a motion asking the New Jersey court to transfer the case to the Illinois court, arguing that the claims in Hytera’s lawsuits were compulsory counterclaims to a pair of lawsuits Motorola filed against Hytera in Illinois.

In March 2017, Motorola filed patent infringement and theft of trade secrets against Hytera in the U.S. District Court for the Northern District of Illinois. Motorola argued that because the New Jersey lawsuit arises out of similar circumstances as the Illinois cases, it should have been filed as a counterclaim in Illinois.

Hytera’s anticompetitive lawsuit directly mentions the two Illinois lawsuits as examples of sham litigation that it alleges Motorola is using to damage Hytera’s reputation and hurt its business. Motorola has also filed patent infringement lawsuits in courts around the world, as well as the U.S. International Trade Commission (ITC).

Motorola has maintained throughout the court proceedings that none of the lawsuits are sham litigation and instead are actions to protect its valuable intellectual property from Hytera.

Last month, the ITC released a final determination affirming an earlier initial determination’s finding that Hytera infringed multiple Motorola patents. Two German courts have also ruled that Hytera infringed Motorola patents and placed sanctions against the infringing products.

In its New Jersey lawsuit, Hytera also alleges that Motorola has used a combination of incentives and threats to stop dealers from carrying Hytera products to tighten its grip on the U.S. LMR market.

The court disagreed with Motorola’s assessment that the New Jersey lawsuit should be counted as compulsory counterclaims to the Illinois cases.

“The court’s analysis on this point begins and ends with plaintiff PowerTrunk,” Magistrate Judge Joseph Dickson wrote. “Simply put, PowerTrunk is not a party to the Illinois actions. As there are no claims against that entity in the Illinois actions, its claims herein cannot be compulsory counterclaims absent factual circumstances not present in this case.”

In addition to Hytera, subsidiaries Hytera America, Hytera America (West) and PowerTrunk are plaintiffs on the New Jersey lawsuit. PowerTrunk is not a defendant in the Illinois cases, as Hytera purchased it several months after Motorola filed its lawsuit.

However, while Dickson discounted Motorola’s counterclaims argument, he found that enough other factors for consideration favored transfer of the case to Illinois.

Dickson noted that in considering a motion to transfer, a plaintiff’s choice of venue is a key factor. However, when the facts of a case happen outside of that venue, the plaintiff’s choice receives less weight in considerations, he wrote.

“… It appears that the operative facts of this lawsuit occurred elsewhere, and that New Jersey’s relationship to those facts is relatively tentative,” Dickson’s order said.

At the same time, Dickson also acknowledged that Motorola would rather litigate the case in its home district in Illinois, which provided a point in favor of transfer.

Another key factor in Dickson’s considerations was where the cause of the actions contained in the suit arose. Dickson highlighted two different methods that courts have used to determine such a question in the past.

First, he highlighted an effects test, which would identify the cause of the actions arising from where the effects of the alleged behavior occurred. The second method Dickson discussed focused on where the alleged behavior actually occurred.

Examining previous case law, Dickson determined that many courts focus on where the alleged misconduct took place and determined that as the proper test for his analysis. Dickson identified Illinois as where the cause of actions arose because that was where Motorola, at its headquarters, developed the plans and strategies that led to the alleged behavior.

“Plaintiffs argue that, even if Motorola developed its corporate plans regarding these activities in Chicago, ‘the foreclosure and injury caused by Motorola’s anticompetitive conduct includes New Jersey,’ ” Dickson wrote. “The court, however, finds that these New Jersey ties are insufficient to overcome the clear, strong connections between plaintiff’s claims and the Northern District of Illinois.”

In terms of the relative convenience of the venue to the parties, Dickson determined that keeping the case in New Jersey would only be convenient to one of the plaintiffs because the other three plaintiffs will still be traveling hundreds to thousands of miles to reach the venue regardless of if it’s in New Jersey or Illinois. Additionally, all of the parties to the suit, except for PowerTrunk, are already traveling to Illinois for the two lawsuits occurring there, Dickson wrote.

Dickson determined that a variety of other factors required for considering a transfer to another jurisdiction fell neutral, and determined that, overall, the factors favored transfer of the case to Illinois.

Spokespeople for both Hytera and Motorola declined to comment on the judge’s decision to transfer the case.

A class-action lawsuit that dealer Ramco Communications filed against Motorola in New Jersey that contained many of the same claims as Hytera’s lawsuit was on hold pending the outcome of the motion to transfer in Hytera’s lawsuit. No further action had been taken in that case at press time.

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