Hytera Says It Didn’t Make First Royalty Payment, Asks for Relief from Judge
Wednesday, August 03, 2022 | Comments

In a court filing, Hytera Communications said it was unable to make its royalty payment to Motorola Solutions and asked a judge to allow it to use shares of stock as a security against its debts.

In 2017, Motorola sued Hytera for theft of trade secrets and copyright infringement and in 2019, an Illinois jury awarded Motorola damages after determining that Hytera used Motorola trade secrets in its Digital Mobile Radio (DMR) products. Following that, Motorola asked District Judge Charles Norgle to implement a permanent injunction against Hytera that would prevent it from importing, selling and distributing products found to include Motorola’s trade secrets.

Norgle denied that motion and instead ordered Hytera to pay a royalty to Motorola for every product sold that includes Motorola’s trade secrets. Last month, Norgle ordered Hytera to begin paying the royalty. Because both sides have filed appeals in the case, Norgle ordered that the royalties be paid into an escrow account, which would then be distributed to Motorola if all of the appeals end in its favor.

In an August 2 filing, Hytera said the first payment was incredibly large and said it was unable to deposit the required amount into the escrow account. In its filing, Hytera specifically asked the court to allow it to place shares of its stock in escrow instead of cash and noted that courts have regularly allowed this in the past.

Alternately, Hytera asked the court to stay the beginning of the royalty payments.

“Hytera alternatively seeks a stay of the court’s order requiring that cash be placed into escrow pending appeal,” Hytera’s filing said. “Staying the order will allow the Seventh Circuit the requisite breathing space to resolve the difficult and novel questions of federal law that are presented here.”

Norgle requested briefs on the issue from each party. Motorola’s response is due August 23 and Hytera’s reply to that brief is due September 6.

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