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US Accuses China’s Hytera of Stealing Motorola Technology

Criminal complaint alleges Shenzhen-based company actively recruited Motorola employees in Malaysia, offering higher salaries and better benefits in exchange for Motorola’s trade secrets.


The US Department of Justice accused Hytera of 21 criminal counts including conspiracy to commit theft of trade secrets. Photo: Reuters.

 

The US Department of Justice (DOJ) announced it has filed criminal charges against China-based telecoms company Hytera, alleging it conspired with employees of Motorola Solutions to steal the US company’s digital mobile radio technology.

In a partially redacted indictment unsealed in Chicago, the US government said Shenzhen-based Hytera Communications Corp recruited Motorola employees in Malaysia to steal proprietary trade data about the radios, commonly referred to as walkie-talkies.

The indictment charges Hytera by name, but it redacts the names of other co-defendants in the case, at least some of whom are the now-former Motorola employees whom the Chinese company is accused of recruiting.

The indictment said Hytera recruited Motorola employees from 2007 through to 2020, offering higher salaries and better benefits in exchange for stealing Motorola trade secrets.

Hytera was charged with 21 criminal counts including conspiracy to commit theft of trade secrets. Hytera and the unidentified other defendants were also charged with possessing or attempting to possess stolen trade secrets. If convicted, Hytera would face a criminal fine of three times the value of the stolen trade secrets.

In a statement sent by its attorneys, Hytera’s said it is “disappointed” by the charges and “respectfully disagrees with the allegations.”

“The indictment purports to describe activities by former Motorola employees that occurred in Malaysia more than a decade ago. Hytera looks forward to pleading not guilty and telling its side of the story in court,” the company said.

Hytera added that it is “committed to honouring the intellectual property rights of others.”

 

Motorola Court Win

Mark Hacker, Motorola’s executive vice president and general counsel, said in a statement the charges against Hytera “underscore the calculated and deliberate character” of the Chinese company’s illegal conduct.

“We will continue our civil litigation against Hytera in jurisdictions around the world to prevent Hytera’s serial infringement and to collect the hundreds of millions of dollars in damages it owes to Motorola Solutions,” Hacker added.

The former Motorola employees all signed confidentiality agreements at the time they were hired and signed non-disclosure agreements after they left the company, the indictment said. It cited evidence that certain employees gained access to trade secrets through a Motorola database they had never previously used.

In one February 2008 email, an unidentified employee emailed another person to ask: “Are we going to ‘reuse’ as much as possible or we need to develop most of them from scratch to avoid patent infringement?”

Hytera is a former distributor of Motorola Solutions products.

Motorola Solutions in February 2020 won a $764.6 million jury verdict in a trade secret theft and copyright infringement case against Hytera.

A federal jury in Chicago found Hytera used Motorola Solutions’ confidential documents and copyright-protected source code to compete in the market for two-way radio communications. Hytera told jurors it had developed its radios on its own.

The criminal case against the company marks the latest blow for Hytera in the US.

In November, President Joe Biden signed legislation to prevent Hytera and other Chinese companies deemed to be security threats from receiving new equipment licences.

Under former president Donald Trump, recipients of federal funding were also banned from using telecom equipment made by Hytera.

 

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Neal McGrath

Neal McGrath is a New York-based financial journalist. Neal started his career covering the Asia-Pacific region for the Economist Intelligence Unit, then joined Asian Business magazine. He's subsequently held a variety of editorial positions covering business, economics, finance and sustainability. Neal has lived and worked in Hong Kong, Singapore, Germany and the US.

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