Hytera Opposes Motorola’s Request for Temporary Restraining Order
Thursday, February 27, 2020 | Comments

In a pair of briefs, Hytera Communications asked an Illinois court to deny a Motorola Solutions request for a temporary restraining order (TRO), arguing that the scope of the proposed order is too wide and ambiguous.

On Feb. 14., a jury for the U.S. District Court for the Northern District of Illinois awarded Motorola $764.6 million in damages from Hytera after it found that Hytera had misappropriated Motorola trade secrets.

On the basis of that decision, Motorola is seeking a TRO to prevent what it calls “irreparable harm” from Hytera continuing to use its trade secrets while post-trial processes, such as a motion for a permanent injunction and appeals move forward. Company officials have said they plan to pursue a permanent injunction against Hytera.

Motorola’s proposed TRO would prevent Hytera, its officers, employees, distributors and resellers and attorneys from “possessing, accessing, reviewing, using, disclosing or otherwise misappropriating Motorola’s trade secrets, including any confidential Motorola documents, source code and source code libraries.”

Additionally, the proposed TRO would prevent Hytera and its distributors from selling or distributing products identified as using Motorola’s trade secrets or any other product developed based on those products or using source code or documentation used by those products anywhere in the world.

“… Motorola is not only competing against its own technology, but it is also competing against the advancements Hytera has been able to make through its ill-gotten gains from selling the accused products and losing its reputation as a market leader for innovation of two-way digital radios,” Motorola’s brief in support of its motion said.

A list of products that Motorola says uses the trade secrets includes a variety of Hytera radios and digital radios, as well as the i-Series products. Hytera introduced the i-Series in the U.S. in 2018 after the International Trade Commission (ITC) found that several Hytera products infringed Motorola patents, saying that the new series of products did not infringe Motorola patents.

Hytera said it opposed a TRO, as well as any injunction, because it would act as “double recovery” since the jury had already awarded Motorola damages. Hytera cited trial testimony from a Motorola witness that described $73.6 million of the proposed damages, which the jury accepted, as a “fully paid, lump sum, perpetual license for use of the alleged trade secrets.”

“While money damages typically compensate a plaintiff for past use of a trade secret and an injunction bars future use, here, the jury awarded Motorola compensation both for past and future use,” Hytera argued.

In its brief in support of its TRO motion, Motorola argued that a TRO is necessary to limit future harm on a variety of fronts. The company argued that Hytera has used Motorola’s proprietary Digital Mobile Radio (DMR) source code in products that have allowed it to erode Motorola’s share of the DMR market and forced it to lower its prices and lose customers. Such losses cannot fully be remedied by monetary damages, Motorola said.

“Hytera offers the accused products at approximately 8-15% lower than the price of Motorola’s DMR products, and is able to do so in part because of the savings on research and development that it realized from its theft of Motorola’s trade secrets and source code,” Motorola’s brief said. “As a result of those lower prices, customers have chosen to purchase Hytera’s accused products over Motorola’s competing products on the basis of price.”

In regard to the scope of the TRO, Hytera argued that the court does not have jurisdiction to grant a TRO that would apply worldwide because the court does not have the power to regulate the business activities of a foreign company in countries outside of the U.S.

“Such a global restriction on manufacturing and sales is inappropriate as a matter of law, for any injunction, and Motorola has not identified a single case that expressly authorized the extraterritorial application of the Defend Trade Secrets Act (DTSA) to prevent a foreign entity from making and selling products outside the United States,” Hytera argued in its brief.

Motorola’s proposed TRO would require Hytera to return “all Motorola trade secrets, including confidential Motorola documents, source code and source code libraries, including all source code derived from Motorola’s source code, in whole or in part, and any other derivative works.”

The TRO would also require Hytera to identify and quarantine all Hytera documents containing Motorola trade secret information, including “Motorola documents that, in whole or in part, have been copied into Hytera documents.”

Hytera argued that the scope of Motorola’s proposed TRO was too broad in terms of quarantining and giving up documents.

“Moreover, these provisions seem to require that Hytera quarantine and return documents that Hytera legitimately obtained, including Hytera’s DMR license with Motorola and related documents, as well as documents Hytera obtained through competitive intelligence efforts,” Hytera’s second briefing said.

Hytera said in its briefings that in its court filings and arguments, Motorola never identified which portions of Hytera source code and documents contained Motorola trade secrets. Without more clarity on which portions of the source code contain information copied or derived from Motorola trade secrets, the provisions of the TRO would prevent Hytera from using source code that it developed on its own.

“Moreover, given the extensive record, evidence that Hytera did independently develop the overwhelming majority of its source code, it would impermissibly ban Hytera from utilizing those efforts,” Hytera’s initial briefing said.

Additionally, Hytera argued that the all-encompassing nature of the proposed TRO could also pose challenges to any appeals Hytera plans to make in the case by removing critical documents from its lawyers’ possession.

Motorola’s proposed TRO would require Hytera to comply with its terms within seven days of the court approving it. Hytera said that such a term would be impossible to comply with.

“Under normal circumstances, it would be impossible to complete Motorola’s ask in only a week’s time,” Hytera said in its second briefing. “These days, however, are not business as usual in China, where Hytera is based. Coronavirus is ravaging the nation, which has forced China to lock down major cities in an attempt to curb the pandemic. Many Hytera employees are unable to report to work now.”

For the reasons it outlined in its briefings, Hytera said it did not believe a TRO was necessary but did offer a revised TRO it encouraged the court to implement if it feels a TRO is necessary.

Hytera’s revised order would prevent the sale and distribution of products identified in a list in an appendix to the order and would also set up a third party to hold any Motorola trade secret information from Hytera while the appeals and permanent injunction process moves forward.

The revised TRO would also give Hytera 60 days to comply with its provisions, with the option for Hytera to apply for a modification of that time frame in consideration of factors such as the coronavirus. The revised TRO would expire after 90 days.

In a separate filing, a group of 20 dealers calling itself the Dealers’ Industry Viability Group argued that a restraining order against Hytera would result in severe consequences to the U.S. DMR market. The court filing did not identify the membership of the group.

The dealers’ filing argued that the TRO would require organizations with tight budgets, such as public-safety organizations, to entirely replace their radio systems when they wanted to add more radios or an issue arose with a part of a system’s infrastructure. Other non-Hytera radios and equipment can’t just be implemented into the system to make it work, the filing said.

“… If Hytera DMR products become unavailable as the result of plaintiff’s request for a temporary injunction, dealers and the end users will be unable to replace repeaters, which will cause the entire communications system to fail, and will be able to add radios to their existing systems,” the filing said. “End users will ultimately be required to switch systems entirely, making all existing equipment obsolete.”

District Judge Charles Norgle, who is overseeing the case, has not indicated when he might rule on the TRO motion.

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