Hytera Opposes Motorola’s Motion for Permanent Injunction in Trade Secrets Case
Monday, June 15, 2020 | Comments

Hytera Communications filed an opposition against Motorola Solutions’ motion for a permanent injunction in the ongoing theft of trade secrets lawsuit between the two companies.

In February, a jury for the U.S. District Court for the Northern District of Illinois awarded Motorola $764.6 million in damages after it determined that Hytera had used Motorola’s proprietary information and in its Digital Mobile Radio (DMR) products. Last month, Hytera America filed for bankruptcy, citing the damages awarded to Motorola and the COVID-19 pandemic as the key factors.

Following that verdict, Motorola has asked for both temporary and permanent restraining orders that would prevent Hytera from distributing or selling any products alleged to contain the Motorola trade secrets. The temporary restraining order would prevent those activities during post trial procedures, and the permanent restraining order would prohibit those activities once the lawsuit is completed.

Hytera filed an opposition to the permanent injunction request, arguing that the verdict form that the jury submitted does not specifically identify which of the 21 trade secrets and four copyright claims involved in the case that Hytera used.

“While the jury returned a verdict in Motorola’s favor, the jury entered a general verdict,” Hytera’s filing said. “The verdict form — adopted at Motorola’s insistence — shows only that the jury found at least one trade secret had been misappropriated and one copyright claim infringed; the jury did not say how many or specify which one. Courts deny permanent injunction requests where, as here, they are ‘unable to determine which trade secrets the jury had relied on in their findings.’ ”

In its motion for a permanent injunction, Motorola argued that the size of the damages awarded by the jury, which was the total amount Motorola requested, implies that the jury found Hytera had used all 21 trade secrets in its DMR product. Hytera argued that the jury’s verdict doesn’t necessarily show that but instead could show that it determined Hytera infringed just one secret for a longer time and thus, the jury awarded it profits from all of those years.

“The only permissible reading of the general verdict is that the jury found Hytera had misappropriated one of three trade secrets that would have taken nine years to develop,” Hytera’s filing said. “Beyond this, the jury did not identify, and the court cannot determine, which trade secrets formed the basis for the damages award.

“Because the verdict is not specific, the court cannot grant an injunction covering all 21 supposed trade secrets,” the filing said. “The court would need to make findings that each one of the 21 claimed trade secrets is, in fact, a valid trade secret that it has been misappropriated and used in Hytera’s accused products. Motorola, which bears the burden of establishing its entitlement to the injunction that it seeks does not ask this court to make these findings now. Nor does Motorola provide support for these findings. It would be too late for Motorola to try to meet this burden in its reply.”

Additionally, Hytera argued that the permanent injunction is not appropriate because Motorola has not shown that it will suffer irreparable harm if Hytera continues to sell and distribute the products. First, Hytera argued that the harms caused to Motorola, such as loss of sales and market share, are irreparable because they can be remedied through monetary damages, which the jury did.

Hytera also argued that Motorola did not provide specific evidence of the harms caused by Hytera actions, such as specific numbers for how its market share decreased from Hytera’s use of its trade secrets.

“Motorola claims irreparable harm in the form of lost market share yet presents no evidence of its own market share, nor that of its competitors,” Hytera’s filing said. “Motorola does not acknowledge other relevant factors that contribute to market share, such as competition from other DMR providers and the size of a dealer network in a specific territory.”

Further, Hytera argued that Motorola had not proven that consumer demand for Hytera’s products came from the Motorola trade secrets they are alleged to contain. Many of those trade secrets are basic DMR features, and many consumers buy Hytera products for enhanced features specific to Hytera radios.

“None of the claimed trade secrets at issue here are drivers of consumer demand,” Hytera’s filing said. “At most, the alleged secrets at issue here are generic software features that make updates more efficient and generic features of a DMR radio that all manufacturers have.”

Hytera argued that Motorola’s permanent injunction would also impact public safety because many critical agencies have purchased and implemented Hytera products to serve their critical communications needs. If Hytera is unable to sell and distribute its products, many of these agencies, such as public-safety organizations, will suffer because they will not be able to get replacement parts for their systems.

“Once a customer has purchased a Hytera system, it would be extremely difficult and costly, if not impossible, for the customer to add radios or repeaters from a different manufacturer,” Hytera’s filing said. “While Motorola claims that its radios are compatible with Hytera systems, DMR interoperability is generally limited to basic radio features and functionality.”

Hytera argued that it has created customized systems, including specific GPS locating capabilities, for critical communications organizations around the world, and having other manufacturers work on or repair those systems would render those features useless.

Hytera asked that if the court does choose to implement an injunction that it add a repair exception that would allow Hytera and its distributors to repair and provide parts for existing Hytera systems.

Hytera finally argued that the scope of the injunction was too broad in that it has no end date. “Finally, Motorola’s proposed injunction has no end date — it would remain in force forever — but Motorola cannot possibly meet its burden of justifying such a limitless injunction. A trade secret owner cannot have an injunction beyond the point it would have taken defendants to independently develop the trade secret,” the filing said. “It has been more than nine years since Hytera actually launched its DMR products in March 2010. As a result, Hytera would have independently developed all of the alleged intellectual property by now.”

Hytera said that instead of an injunction, it would be more appropriate for the court to award a reasonable royalty for Hytera’s use of the alleged trade secrets. Hytera argued that some of the damages already awarded to Motorola should serve as that royalty.

Motorola can file a response to Hytera’s opposition, which is due at the end of June. The court will likely not rule on the permanent injunction motion and other post-trial motions until at least the end of August or early September.

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