Motorola Solutions Asks Court for Permanent Injunction Against Hytera
Thursday, April 16, 2020 | Comments

Motorola Solutions asked a judge in the U.S. District Court for the Northern District of Illinois to enter a permanent injunction against Hytera Communications. The proposed injunction would prevent Hytera from selling or distributing products using Motorola trade secrets around the world.

Motorola previously asked the court for a temporary injunction as the case moved through post-trial procedures.

In February, an Illinois jury awarded Motorola $764.6 million in damages after it determined that Hytera had used Motorola trade secrets in its Digital Mobile Radio (DMR) products. Motorola first sued Hytera in March 2017, alleging that three former Motorola employees had downloaded Motorola’s proprietary information and then went to work for Hytera.

In its motion for a permanent injunction, Motorola argued that such an injunction is necessary to prevent Hytera from continuing to use its trade secrets in its DMR products.

“Accordingly, entry of a worldwide permanent injunction is necessary to stop Hytera’s flagrant disregard of the laws protecting Motorola’s trade secrets and copyrights and the continued irreparable harm to Motorola caused by Hytera’s theft,” the motion said.

When considering entering an injunction, a judge must decide whether the party has succeeded on the “merits of its case,” Motorola said, further arguing that Motorola clearly has, because after a three-month trial, the jury returned a verdict in Motorola’s favor in less than three hours.

“In addition, as explained in Motorola’s TRO (temporary restraining order) briefing, the jury’s general verdict is no impediment to the entry of a permanent injunction,” the motion said. “The jury awarded the full compensatory damages Motorola sought, meaning the jury necessarily found Hytera misappropriated all of Motorola’s trade secrets.”

Further, Motorola argued that without a permanent injunction, its business will be irreparably harmed because Hytera’s use of its trade secrets is causing it to lose market share and forcing it to lower its prices.

“Hytera now sells the second-most DMR radios globally and has the second most dealers globally,” the motion said. “Those gains have come at the price of Motorola’s market share, which steadily declined due to Hytera in the years leading up to this lawsuit. … And because the DMR products at issue have a life span of seven to 10 years, every sale and customer that Motorola loses to Hytera is one that it will take Motorola at least that many years to get back, if ever.”

In a motion opposing Motorola’s temporary injunction request, Hytera argued that an injunction was unnecessary because of the large amount of damages the jury awarded Motorola. Additionally, Hytera argued that some of the damages acted as a perpetual license for the use of some of the Motorola’s trade secrets.

In its motion for the permanent injunction, Motorola argued that the damage Hytera is doing to its market share is not quantifiable, and therefore, the damages awarded by the jury do not cover it.

Additionally, Motorola said that Hytera has been able to offer its products using Motorola’s trade secrets at prices 8%-15% lower than Motorola’s, which has cut into Motorola’s profits.

“As a result of those lower prices, customers have purchased Hytera’s accused products over Motorola’s products on the basis of price,” Motorola’s motion said. “Motorola has been forced to lower its prices or offer price exceptions in every region to compete with Hytera, and if Hytera is not enjoined, Motorola will have to continue to lower its prices in order to compete with the accused products. This pervasive and global price erosion cannot be remedied by a money judgement.”

Motorola also disputed Hytera’s idea that monetary damages awarded by the jury served as a perpetual license for its technology.

“The jury was not instructed on a reasonable royalty by agreement of the parties, and with no evidence and no instruction, the jury could not, and did not, award a fully paid-up license,” Motorola argued.

Motorola said that if the court decides not to implement a permanent injunction against Hytera, it should require Hytera to pay a “reasonable royalty” to Motorola for the use of its trade secrets.

“Hytera should not be permitted to continue selling products it made based on, and/or that contain or are otherwise derived from, Motorola’s trade secrets and copyrighted source code in the first place, but in no circumstance, should Hytera be permitted to do so freely,” the motion said.

Finally, Motorola argued that a permanent injunction would be in the public interest despite Hytera’s argument that such an injunction would lead to a “one-player” market in the DMR market. Motorola said that Hytera had undermined that argument during the trial with evidence and statements that acknowledged the existence of other DMR manufacturers besides Hytera and Motorola.

Motorola argued that not implementing an injunction would hurt the public interest because if companies thieving from others are allowed to continue profiting from a theft, companies will be discouraged from investing in research and development (R&D) that can benefit consumers and the world.

In its opposition to Motorola’s request for a temporary restraining order, Hytera took issue with Motorola’s request for a worldwide injunction, arguing that the U.S. court did not have the jurisdiction to regulate the sale of the products outside the U.S.

Motorola argued that the Defend Trade Secrets Act (DTSA), which is one of the acts Motorola filed its lawsuit under, applies outside the U.S. if “any act in furtherance of the offense was committed in the United States.”

Hytera’s response to Motorola’s motion is due at the end of April. Hytera also filed a motion asking for a new trial in the case. The court will likely not decide on those motions until at least mid- to late May.

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