Motorola Says Hytera Sanctions Would Not Affect Competition, 7 Dealers Disagree
Friday, August 17, 2018 | Comments

In a filing with the U.S. International Trade Commission (ITC), Motorola Solutions argued that proposed ITC sanctions against Hytera Communications would not impact competitive conditions in U.S. markets.

Meanwhile, seven dealers that sell Hytera Digital Mobile Radio (DMR) products submitted public interest statements arguing that the proposed sanctions against Hytera would both harm public safety in the U.S. and competitiveness in the LMR market.

In July, Administrative Law Judge Mary Joan McNamara released an initial final determination that found Hytera violated four Motorola patents. As sanctions, she recommended that the ITC implement exclusion and cease-and-desist orders against Hytera that would prevent the sale and importation of the infringing Hytera products in the U.S.

Hytera has asked for a review of the initial determination, and the final determination could be different from McNamara’s if the ITC determines the facts support such a conclusion.

In its filing on how the sanctions would impact the public interest, Motorola argued that the sanctions would have little impact on the public interest. Specifically, Motorola argued that the sanctions would not impact public safety and would not negatively impact competitive conditions in the U.S. LMR market.

The void left by an exclusion of the infringing Hytera products would be filled by Motorola and other radio manufacturers, Motorola’s filing said.

“Motorola stands ready to supply the needs of U.S. business and customers with two-way radio equipment and systems that practice each of the Motorola patents at issue,” the filing said. “And numerous other companies supply competing products in the U.S.”

While Hytera products are used by public safety and other mission-critical entities, the proposed sanctions would not impact the ability of those organizations to perform their functions because there is “a ready availability and abundant supply of alternative products” on the market, Motorola said.

Similarly, Motorola argued that excluding Hytera’s products from the U.S. market would not impact competitive conditions in the U.S. LMR markets because there are a variety of DMR alternatives to the Hytera products available.

“A slight reduction in consumer choice is not a basis for denying relief,” Motorola said in its filing. “… U.S. consumers would be free to look not only at Motorola, but also to other competitors. The existence of ‘numerous other sources’ for products speaks to the insignificant impact exclusion would have on U.S. consumers.”

The seven Hytera dealers that submitted public interest statements all disagreed with Motorola’s assessment, arguing that the proposed sanctions would hurt both public safety and competitiveness in the U.S. by driving up prices and limiting the radio features customers have access to.

Warner Communications, MicroMagic, Baker’s Communications, Eagle Communications, Nielson Communications, Marcus Communications and EdgeTech all filed statements asking the commission not to implement the sanctions.

All six dealers noted that they serve mission-critical entities and argued that Motorola products would not work for their customers because of their much higher price compared with Hytera products. The more expensive Motorola products would take up more of those mission-critical organizations’ budgets for communications, leaving less funds for other parts of their operations and thus, jeopardizing public safety, the filings said.

Additionally, Hytera’s DMR products have important features for mission-critical applications that no other companies offer at an affordable price, the dealers said. Motorola nor any other company would be able to fill the gap left by the lack of those features, the dealers argued.

As an example, Baker’s Communications pointed to Hytera radios that combine GPS with the man-down function that can both send emergency alerts and help coordinate rescues. “No other suppliers’ products have this unique GPS feature built in their radios,” Baker’s Communications President Douglas Baker wrote in the filing.

Additionally, the dealers expressed concern about the sanctions’ effect on existing Hytera systems in the U.S. If Hytera or its dealers are unable to repair or replace components or radios of existing systems, it would greatly harm the organizations using those systems, the dealers said.

The dealers argued that Motorola would be unable to adequately support or repair those existing systems and expressed concern that instead of repairing existing Hytera systems, Motorola would force organizations to buy a new system, taxing their already tight budgets.

Finally, the dealers argued that Motorola already controls much of the DMR portion of the LMR market in the U.S., and by removing Hytera, its chief competitor in the market, the sanctions would only give Motorola a stronger monopolistic grasp. None of the other DMR manufacturers in the market have the products to truly compete with Motorola, the dealers argued.

Both Baker’s Communications and Nielson Communications said that the proposed sanctions could put them out of business because Motorola will no longer work with them because they continue to sell Hytera products.

In its own public interest statement, Hytera asked the ITC if it moves forward with the sanctions to add an exception that allows it and its authorized dealers to repair and replace components of existing systems. Hytera also asked the ITC to delay the sanctions to give Hytera time to transition its existing customers to noninfringing products.

Hytera has submitted designs for new DMR products to the ITC and asked it to confirm that they do not infringe the Motorola patents. The ITC expects to release its final determination on the case in November.

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