ITC Judge Releases Initial Determination in Favor of Motorola Solutions Against Hytera Communications

Motorola Solutions, Inc. (NYSE: MSI) today announced that Administrative Law Judge Mary Joan McNamara of the U.S. International Trade Commission (ITC) has released the Notice of Initial Determination from the ITC’s investigation of the patent infringement complaint filed by Motorola Solutions against Hytera Communications Corporation Limited (SHE: 002583) on March 29, 2017. In the complaint, Motorola Solutions alleged that Hytera is unlawfully importing and selling two-way radio equipment and systems and related software and components that infringe four of Motorola Solutions’ patents.

On July 3, 2018, Judge McNamara found that all four of Motorola Solutions’ patents are valid and that Hytera infringed them. An exclusion order, preventing the importation of infringing products into the United States for three of the patents, as well as a cease-and-desist order (preventing the further sale and marketing of certain infringing products imported into the United States), continues to be Judge McNamara’s recommendation. The release of the detailed 260 page Initial Determination was ordered by the Judge notwithstanding Hytera’s efforts to redact it extensively.

Relevant highlights from the Notice of Initial Determination are below. All quotations are verbatim from Judge McNamara (emphasis added in certain places). The full Initial Determination is available at https://newsroom.motorolasolutions.com/content/1107/files/InitialDeterminationSection337.pdf.

There Is “Persuasive Evidence” Hytera Copied Motorola Solutions’ Technology

• Motorola Solutions presented “persuasive circumstantial and direct evidence” that the Hytera employees “wrongfully copied certain of Motorola [Solutions’] patented technologies.”
• “Finally, and perhaps the most problematic for Hytera, the evidence includes the extent to which each of these Hytera Employees plead the Fifth Amendment and declined to answer questions during their depositions in this Investigation. The questions the Hytera Employees were asked clearly were designed to document whether they copied and took with them to Hytera any of Motorola [Solutions’] proprietary and patented Motorola [Solutions] technology.”
• “In each case, the Hytera Employees refused to answer questions and instead invoked their Fifth Amendment right not to incriminate themselves. Mr. Y.T. Kok invoked his Fifth Amendment right to more than 70 questions. Mr. Chia also invoked his Fifth Amendment right to more than 70 questions. Mr. G.S. Kok invoked his Fifth Amendment right against self-incrimination to more than 60 questions.”

Hytera Employees’ Timeline Is “Compelling and Telling”

• “While Hytera may be correct that there is no direct evidence that the three Hytera employees copied the more than 7,000 documents they accessed, it is logical to infer that the Hytera Employees accessed these documents with the intent of acquiring information about Motorola [Solutions’] DMR products for Hytera. The timing and circumstances of their actions are unequivocal and uncontested.”
• “That figure bears repeating simply to let sink in the sheer magnitude of the number of confidential Motorola documents that the Hytera Employees accessed, just before they left Motorola: more than 7,000 documents. This could not have been coincidental.”

Hytera Was “Willfully Blind” to Motorola Solutions’ Patent Portfolio

• “Despite knowing about Motorola [Solutions’] patents, and while Hytera unquestionably copied certain of Motorola [Solutions’] patented technologies, Hytera acknowledged that it did not take any steps to avoid infringing Motorola [Solutions’] patents.”

Hytera’s Arguments Are “Disingenuous”

• “It is difficult to understand why Hytera continued to maintain positions throughout this Investigation that were disingenuous, and not supported either factually or legally.”

“Hytera has built its business by copying the hard work and innovation of Motorola Solutions. Judge McNamara’s findings categorically validate the merits of Motorola Solutions’ global litigation against Hytera to stop its improper and illegal behavior,” said Mark Hacker, general counsel and chief administrative officer of Motorola Solutions. “We thank Judge McNamara for both her diligence and the strong, clear language she used to condemn Hytera’s actions. We remain committed to vigorously protecting Motorola Solutions’ intellectual property in the United States and internationally, and look forward to the final determination by the ITC.”

As the next step in the process, the ITC will conduct a mandatory review of the Initial Determination. A Final Determination is scheduled to be issued by Nov. 6, 2018. After the Final Determination is issued, there is a 60 day presidential review, during which the U.S. President may modify the ITC’s Final Determination. Upon the expiration of that review period (approximately Jan. 7, 2019), the ITC’s exclusion and cease-and-desist orders will take effect. At such time, at least the following Hytera products would be excluded from the U.S. market:

• Subscribers: MD652, MD782, BD302, BD362, BD502, PD412, PD502, PD562, PD602, PD662, PD682, PD702, PD752, PD782, PD792, PD982, X1e, X1p, and all variants thereof; and
• Repeaters: RD622, RD982, and all variants thereof.

In addition to the ITC, Motorola Solutions’ patent infringement, trade secret theft and copyright infringement lawsuits against Hytera are still pending in the U.S. District Court for the Northern District of Illinois, the Federal Court of Australia and the Regional Courts of Mannheim and Düsseldorf in Germany.