Motorola Solutions won a US$764.6 million verdict after a federal jury in Chicago said Chinese rival Hytera Communications stole the company’s critical trade secrets for two-way radio technology. Hytera pledged to appeal.
The jury awarded US$345.8 million in compensatory damages and US$418.8 million in punitive damages – the full amount sought by Motorola.
Jurors reached their decision after deliberating 2½ hours following a trial that sprawled over three months. Motorola lawyers said they would seek an order blocking the sale of Hytera’s radios in the US, to stop further use of its trade secrets and copyrighted source code.
The case is the latest example of an American company accusing a Chinese firm of luring away employees and using pilfered know-how to develop new products. The overarching goal, American officials contend, is to help China’s efforts to transform from the world’s factory to an economic superpower.
The verdict is “a tremendous victory for Motorola Solutions”, Chief Executive Greg Brown said in a statement. “Hytera was simply profiting off of the hard work and innovation of our world-class engineers.”
Hytera had denied stealing technology and said it developed its radios on its own.
“Hytera is disappointed by the jury verdict,” Dylan Liu, a Hytera spokesman, said. “Hytera respectfully disagrees with the jury and is currently considering pursuit of all appeal options.”
The verdict came a day after US prosecutors in New York filed racketeering charges accusing another Chinese company, telecommunications giant Huawei Technologies, of a decades-long plot to steal American technology to build its business.
The digital-radio technology for walkie-talkies at the heart of the Motorola fight is critical for utility workers, construction crews and school officials who need to maintain contact even in dire situations. The jury found that Hytera had stolen trade secrets and infringed Motorola’s copyrights.
Motorola said it spent decades developing the next generation of two-way communication only to have Hytera come along with a similar product soon after US regulators mandated a move to digital technology.
Hytera’s advantage came from hiring Motorola engineers and tapping into thousands of proprietary Motorola documents, the Chicago-based company argued.
Hytera, a former distributor of Motorola radios, acknowledged that hiring the engineers was a mistake, but said it developed its radios on its own. The company has accused Motorola of using the lawsuit, its patents and its market power to drive out competitors. An antitrust case against Motorola is pending in Chicago before a different judge.
The secrets Motorola said were stolen include hands-free communications, location functionality, emergency alarms for workers in distress and a means to connect a phone user to a group of radio users.