Hytera Asks Court for New Trial, Reduction of Jury-Awarded Damages to Motorola
Thursday, April 09, 2020 | Comments

Hytera Communications filed a motion for a new trial in Motorola Solutions’ theft of trade secrets lawsuit against it in the U.S. District Court for the Northern District of Illinois. The motion argued that during the original trial, District Judge Charles Norgle gave Motorola witnesses preferential treatment over Hytera witnesses and inappropriately allowed some Motorola evidence into the trial.

“The trial itself was replete with errors that resulted in Hytera being denied a fair trial,” the motion said. “The many errors, each individually and in combination, were substantially harmful and prejudicial to Hytera, and Hytera is entitled to a new trial.”

In February, a jury awarded Motorola $764.6 million in damages after determining that Hytera had stolen trade secrets from Motorola and used them in its Digital Mobile Radio (DMR) products. Motorola originally filed its lawsuit in 2017 after it said it discovered that three former Motorola Solutions Malaysia employees had illegally downloaded proprietary Motorola information and then went to work for Hytera.

Hytera’s motion also asked for a reduction of the $764.6 million in damages that the jury awarded, arguing that a variety of legal factors make that amount inappropriate in the case.

Hytera’s motion argued that the judge admitted “improper expert testimony” from Motorola and “curtailed proper expert testimony” from Hytera’s experts.

“The court permitted Motorola’s three designated experts to testify beyond their expertise and without reliance on any methodology,” the motion said. “Motorola was permitted to present legal argument through its experts. Not only were Motorola’s experts permitted to speculate as to matters outside their expertise, but the court sua sponte (on its own motion) qualified three of Motorola’s fact witnesses as experts and allowed them to speculate to the jury as well.”

At the same time, Hytera’s motion argued that the court excluded testimony from Hytera’s expert witnesses that “would have showed Motorola’s claimed trade secrets had been disclosed in Motorola’s patent and copyright filings.”

Hytera also argued that the court prevented Hytera experts from rebutting testimony from Motorola’s experts and allowed a Motorola expert witness to testify about damages in rebuttal without allowing Hytera to rebut that information.

“The court’s preferential treatment of Motorola’s witnesses over Hytera’s put a thumb on the scale and denied Hytera its right to prevent a full defense,” the motion said.

On an evidentiary basis, Hytera argued that the court admitted Motorola evidence into the trial before Motorola had established an adequate foundation for why that evidence should be included, allowed Motorola to violate a trial agreement between the companies about disclosing evidence and overall allowed “highly prejudicial and irrelevant evidence.”

“Contrary to Motorola’s representations in pretrial briefing, Motorola engaged in highly prejudicial anti-China rhetoric during the closing argument,” Hytera’s motion said. “This prejudice was compounded by the court’s errors in conducting voir dire (questioning of a witness or juror), where the court circumscribed full questioning into jurors’ anti-China biases. The trial was unfair, and a new trial is warranted.”

Hytera also argued that Motorola did not sufficiently identify which trade secrets Hytera used, as required by federal rules.

As established in the IDX Systems v. Epic Systems case, plaintiffs in trade secrets cases must “separate the trade secrets from the other information that goes into any software package but does not meet the statutory definition of a trade secret, such as information that is publicly available or generally known,” the motion argued.

Hytera said that Motorola failed to provide this information and that Motorola’s own evidence showed that some of the trade secrets were invalid and that Hytera would have independently come up with some of the trade secrets before the Defend Trade Secrets Act (DTSA) came into effect in 2016, making them invalid for legal action under that act.

“And if even one secret is invalid, then Hytera is entitled to a new trial at the very least due to the verdict form’s failure to break down which trade secret(s) were found to be misappropriated or which damages pertain to which trade secret(s),” the motion said.

Hytera also took issue with many of the damages the jury awarded Motorola and argued that most of those damages should be reduced.

The company said that it was inappropriate for the jury to award Motorola the full $345.8 million it asked for in disgorgement of Hytera’s profits and savings from avoiding research and development (R&D). Under the Federal Rules of Procedure sections that govern disgorgement, any jury verdict is advisory and a judge must determine the appropriate amount, “without deference to the advisory jury’s verdict.”

Hytera also argued that because Motorola failed to specifically identify which trade secrets were stolen, any damages the jury awarded under the DTSA should be invalid. In its original complaint, Motorola sought damages under both the DTSA and the Illinois Trade Secrets Act (ITSA).

Additionally, Hytera argued that while Motorola requested and received disgorgement for all of Hytera’s profits from devices using Motorola’s trade secrets, many of the profits from those devices came not from Motorola’s trade secrets but from Hytera’s own work. Hytera also argued that the damages do not take into account any actual R&D costs Hytera incurred.

“Hytera should not be required to disgorge profits it would have earned independently, and the award must be reduced accordingly,” the motion said.

Hytera also took issue with Motorola receiving damages for use of the products outside the U.S., arguing that neither the DTSA nor the ITSA allows the recovery of damages from conduct in other countries.

Finally, Hytera argued that the $418.8 million the jury awarded Motorola in punitive damages should be reduced to zero because punitive damages may only be awarded if trade secrets were “willfully or maliciously misappropriated.”

“In this case, the evidence showed the concerted effort that several former employees engaged in to conceal their misconduct from Hytera and that, as soon as Hytera learned the details of the accusations, Hytera engaged in corrective actions,” the motion said, referring to the actions of the former Motorola employees.

Motorola now has 28 days in which to respond to Hytera’s motion. Motorola has said it plans to file motions for temporary and permanent injunctions that would prevent the sale of products using the trade secrets.

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