Hytera Found Guilty of Stealing Trade Secrets from Motorola

On February 14, 2020, the U.S. District Court with jurisdiction over the Chicago area ruled that Hytera Communications Corp Ltd. was guilty of copyright infringement and had stolen trade secrets from Motorola Solutions.  Hytera is a Chinese company that is both a key supplier to the Chinese Ministry of Public Security and the second largest manufacturer of radio systems globally.  The case, which was brought in March 2017, was resolved when jurors awarded $764.6 million in compensatory and punitive damages to Motorola, the full amount requested in the lawsuit.  Hytera intends to appeal the decision, but, in the meantime, proceeds as a company found guilty of intellectual property theft and expressing no acknowledgement of wrongdoing or commitment to changing its practices.

The stain on Hytera’s reputation as well as the financial costs associated with the case, the appeals process and the court’s ruling carry risk for existing and potential future business partners, particularly against the backdrop of concern associated with Chinese telecommunications companies and their presumed susceptibility to directives from the Chinese state security services.  Even prior to the recent ruling, the company has been the subject of scrutiny in Canada, the United States and the United Kingdom after attempts to acquire companies in these countries.  Hytera’s stock, which is traded on the Shenzhen Stock Exchange, took a hit after the court’s decision was made public, though it had recovered within a few weeks.