A Chinese company admitted in a U.S. federal court on Monday (January 13th) that it had stolen the walkie-talkie technology from Motorola Solutions in Chicago.
Hytera Communications Corp. Ltd., a Chinese company, pleaded guilty to a felony charge of conspiring to steal trade secrets.
According to the plea agreement, in 2008, individuals associated with Hytera agreed to steal documents and source code related to Motorola’s digital mobile radio technology (walkie-talkies). Court documents revealed that they subsequently used some of the stolen information to develop Hytera products, which were later sold in Illinois.
The Chinese company faces a fine of up to $60 million and is also required to provide full compensation to Motorola as per the judgment.
Hytera is a leading walkie-talkie company in China and is referred to as “Xiao Huawei” in the field of private network communication. It had been previously blacklisted by the U.S. government.
On March 15, 2017, Motorola and Motorola Malaysia sued Hytera and its subsidiaries, Hytera America Inc., and Hytera America West Inc., for alleged infringement of trade secret copyrights and patents. The case was heard in the Northern District of Illinois Federal Court.
The complaint stated that Hytera Communications recruited and hired employees from Motorola and instructed them to obtain proprietary and trade secret information from Motorola without authorization.
These employees obtained trade secret information from internal databases while still employed by Motorola and sent multiple emails describing their intent to use the technology at Hytera.
From 2007 to 2020, Hytera and the recruited employees used Motorola’s proprietary and trade secret information to expedite the development of Hytera’s DMR products, train Hytera employees, and market and sell Hytera’s DMR products worldwide.
The complaint also mentioned that Hytera paid the recruited employees higher wages and benefits than they received at Motorola.
On March 5, 2020, a first-instance judgment was rendered by the Illinois court in the United States, finding Hytera and its subsidiaries guilty of infringing Motorola’s trade secrets and U.S. copyrights and ordering them to pay damages of $346 million and punitive damages of $419 million, totaling $765 million.
Hytera challenged the first-instance judgment of the U.S. court. In June 2022, Hytera filed a lawsuit with the Shenzhen Intermediate Court, seeking a declaration that their newly designed H-series products did not infringe Motorola’s trade secrets and copyrights.
Following the initiation of the lawsuit by Hytera in the Shenzhen court, Motorola submitted a restraining order to the U.S. court requesting Hytera to withdraw the lawsuit in Shenzhen. The U.S. court approved the restraining order on March 25, 2024.
On April 8, 2024, Hytera issued a notice stating that they received a court order from the U.S. which found the company had not fully complied with the restraining order, temporarily prohibiting the company from selling two-way radio technology products globally and imposing a daily fine of $1 million until full compliance with the restraining order is achieved.