Judge Denies Hytera Summary Judgment Motion, Trial Date Set
Friday, April 05, 2019 | Comments

An Illinois judge denied a motion for summary judgment in Motorola Solutions’ theft of trade secrets and copyright infringement lawsuit against Hytera communications, setting the stage for a jury trial scheduled to begin Nov. 1.

Illinois District Judge Charles Norgle denied Hytera’s motion for partial summary judgment, which argued that the statute of limitations had passed for Motorola’s theft of trade secrets claims.

The case centers around three former Motorola Solutions employees who, Motorola alleges, downloaded and copied proprietary files before quitting at Motorola and going to work for Hytera. Those trade secrets were then used in Hytera Digital Mobile Radio (DMR) products, Motorola alleged in its complaint.

In its motion for summary judgment, Hytera argued that both the federal and state statute of limitations on the alleged actions had passed and that Motorola should have known of the alleged thefts through reasonable diligence much earlier than it says it did. Under federal and state trade secrets laws, the statute of limitations clock does not start ticking until a company discovers the violations or should have discovered them through reasonable diligence.

The federal Defend Trade Secrets Act (DTSA) has a five-year statute of limitations attached to it, while the Illinois Trade Secrets Act (ITSA) has a three-year statute of limitations.

“… The court concludes that there are numerous genuine issues of material fact concerning whether Motorola knew or reasonably should have known of Hytera’s alleged misappropriation of its trade secrets prior to March 14, 2012, for its ITSA claim, and March 14, 2014, for its DTSA claim,” Norgle wrote in denying Hytera’s motion.

The three Hytera employees left Motorola in 2008, and in 2009, Motorola became aware that the former employees were working for Hytera. In 2010, Motorola became aware of a Hytera patent that listed one of the former employees as an inventor for a technology that was similar to what that employee had worked on for Motorola, according to Norgle’s order.

Hytera’s first DMR product came out in 2010, and Motorola became aware of a battery life chart included in Hytera marketing that displayed the same numbers as Motorola’s MOTOTRBO DMR products. It was at this time that rumors that Hytera was creating products using Motorola’s proprietary source code began to circulate around Motorola, Norgle wrote in his order.

In 2012, Motorola analyzed a Hytera digital radio to determine if it contained Motorola’s source code. At that time, Motorola found “no obvious evidence of proprietary material” in the radio, the judge’s order said.

Motorola filed its theft of trade secrets lawsuit in the U.S. District Court for the Northern District of Illinois in March 2017. In court documents, Motorola said it discovered that the former employees may have downloaded and taken its trade secrets in 2016 when it began investigating possible patent infringement by Hytera.

Hytera argued in its motion that Motorola should have known of the alleged trade secret thefts much earlier for several reasons. First, it cited the “inevitable disclosure” doctrine, which allows a court to find that an employee would reveal proprietary details by taking a job with another company. Generally, the doctrine is used to prevent an employee with access to proprietary information from working for another company.

Hytera argued that as soon as Motorola learned that the former employees were working for Hytera, it should have become aware of the alleged theft of trade secrets.

Norgle ruled that the doctrine did not apply in this case because Motorola was not arguing that the former employees working for Hytera inevitably led to the misappropriation of trade secrets. Instead, Motorola claimed that the former employees accessed and downloaded the trade secrets and then took those secrets to Hytera and used them in DMR products, Norgle wrote.

Additionally, the mere knowledge of former employees working for a competitor on similar products is not enough to count as notice of trade secret theft, Norgle ruled.

Hytera also argued in its motion that the battery life chart Motorola became aware of in 2010 should have counted as notice that its trade secrets had possibly been stolen. Motorola argued against that, saying that the information contained in that chart either came from publicly available information or could be determined by analyzing one of its radios, so it didn’t necessarily mean that Hytera had stolen Motorola trade secrets.

“It follows that Hytera did not necessarily need to use any of Motorola’s trade secrets when it created the battery life chart or the features on its DMR products,” Norgle wrote. “Accordingly, when viewing the record in favor of Motorola, a jury could infer that Motorola believed in 2010 that Hytera was attempting to offer DMR products with a similar look-and-feel to Motorola’s products, rather than implementing Motorola’s trade secrets.”

Finally, Hytera argued that the rumors of potential patent infringement going around Motorola in 2010 and 2011 about potential Hytera infringement showed that Motorola should have been aware of the alleged violations sooner.

In response, Motorola pointed to its 2012 investigation of a Hytera radio, which shows that Motorola was trying to be diligent in protecting its source code, but the company did not find any violations at that time, Motorola argued.

“While Hytera disputes the purported results of the 2012 investigation, the court ultimately agrees with Motorola in concluding that there are genuine issues of material fact concerning whether Motorola should have known of its trade secret claims prior to 2012, based on its employees’ suspicions of trade secret theft by Hytera,” Norgle wrote.

In a statement, Mark Hacker, Motorola Solutions general counsel and chief administrative officer, praised Norgle’s decision and said the company plans to seek damages and an injunction against all of Hytera’s DMR products.

“Hytera’s attempt to rely on the statute of limitations to avoid a jury trial on its egregious conduct has been thwarted by the court’s denial of Hytera’s summary judgment motion on that issue,” said Hacker. “We are pleased with this significant step towards ending Hytera’s brazen theft of our proprietary intellectual property.”

As it has done several times, Hytera, in its own statement, accused Motorola of exaggerating routine court proceedings.

“We are unsurprised our competitor is again attempting to exaggerate the effects of routine court proceedings and will continue to protect our legal rights within the courts,” a Hytera spokesperson said. “Hytera denies the claims asserted by Motorola Solutions, is vigorously defending the cases and looks forward to continuing to provide land mobile radio (LMR) customers with greater innovation and a competitive choice in the marketplace.”

The theft of trade secrets lawsuit was the first in a series of lawsuits that Motorola brought against Hytera, beginning in March 2017. At the same time, Motorola filed a patent infringement suit against Hytera in the same Illinois district court.

A few weeks later, Motorola filed a patent infringement suit against Hytera with the U.S. International Trade Commission (ITC). In November, the ITC determined that Hytera had infringed several Motorola patents and implemented an injunction prohibiting the importation, distribution and sale of the infringing products. However, the ITC also determined that redesigned products Hytera submitted for approval did not infringe the patent and could be imported and sold in the U.S.

The patent infringement case in Illinois was on hold pending the outcome of the ITC case but has begun moving forward again. Hytera recently filed a motion for dismissal, arguing that the venue is inappropriate. Alternatively, the motion asks for transfer of the case to California.

Motorola also filed patent infringement lawsuits against Hytera in two German courts. Both courts determined that Hytera infringed Motorola patents and issued injunctions against the infringing products. Another Motorola patent infringement suit against Hytera in the Federal Court of Australia is set to go to trial in 2020.

Hytera also filed an anticompetitive practices lawsuit against Motorola, arguing that Motorola has been using monopolistic practices to exclude Hytera from the U.S. digital radio market. That case originated in the U.S. District Court for New Jersey but was transferred to Illinois. Motorola has filed a motion to dismiss that case, arguing that Hytera lacks standing to bring the case.

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