Hytera US Asks Court to Quash Motorola Petition to Discover Assets
Tuesday, March 30, 2021 | Comments

Hytera US, a recently formed subsidiary of Hytera Communications, asked an Illinois court to quash a motion from Motorola Solutions seeking discovery of its assets.

In March 2017, Motorola sued Hytera for theft of trade secrets in the U.S. District Court for the Northern District of Illinois and later added a claim of copyright infringement to that suit. In February 2020, a jury awarded Motorola $764.6 million in damages after determining that some Hytera Digital Mobile Radio (DMR) products included Motorola trade secrets.

Following that verdict, Hytera’s two U.S. subsidiaries filed for bankruptcy, citing the damages awarded to Motorola as a key factor. At the end of 2020, a bankruptcy court in California approved a sale of the two subsidiaries to Hytera US, which was formed in May 2020.

Motorola filed oppositions to the bankruptcy sale accusing Hytera of “laundering” its U.S. subsidiaries by selling them to another Hytera entity. Motorola also filed a motion seeking discovery of the new Hytera entity’s assets.

Since it was not included in the original lawsuit, Hytera US filed a motion to intervene in the case and asked the court to quash the motion on discovery of its assets. The company argued that the court lacks jurisdiction over it, Motorola’s motion was overbroad and the motion was not properly delivered to Hytera US.

U.S. District Judge Charles Norgle granted Hytera US’s motion to intervene in the case and ordered Motorola to file a response to Hytera US’s opposition to the motion to quash.

In its response, Motorola argued that Hytera had created Hytera US to avoid paying the damages owed to it by Hytera’s U.S. subsidiaries.

“Rather than providing the requested information, HUS seeks to avoid the Illinois citation process,” Motorola’s response said. “This is yet another (of many) motions to quash citations that respondents have filed, all orchestrated to avoid providing any discovery of Hytera’s assets or eventual satisfaction of the judgment.”

Motorola argued that the court had jurisdiction over Hytera US because it serves as a successor business to Hytera’s two U.S. subsidiaries.

“HUS therefore continues to market and sell in this district the very products at issue in this case found to illegally contain Motorola’s trade secrets, easily establishing minimum contacts with this forum and the court’s specific jurisdiction over it,” the response said. “Moreover, HUS is undeniably a successor in interest of Hytera West and Hytera East (over which the court has personal jurisdiction), and is therefore subject to this court’s jurisdiction for that reason as well.”

Motorola argued that because Hytera US is a successor of the two U.S. subsidiaries, it is responsible for claims arising from the Illinois case.

“HUS is carrying on the same business as its predecessors, currently marketing and selling products found to illegally contain Motorola’s trade secrets, establishing the court’s jurisdiction over it, both based on its own ongoing contacts with Illinois and its status as a successor,” Motorola’s opposition said.

Motorola also addressed Hytera’s argument that its motion for discovery of Hytera US’s assets was too broad. In its motion, Hytera US argued that the purpose of Motorola’s motion was “improperly target” it.

Motorola argued that the motion is not over broad because Hytera US is now the sole distributor of Hytera’s products that were found to contain Motorola trade secrets in the U.S. and holds other assets of the U.S. subsidiaries.

Norgle has not indicated when he might rule on the motion.

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