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Case Almost Closed: Motorola Wins Multimillion Dollar Trade Secret Case

by Chris Brook on Monday March 16, 2020

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A jury ruled the telecom is owed upwards to $420 million in damages after a Chinese company was caught stealing its trade secrets for radios.

It took years of deliberation but a case involving stolen source code and trade secrets appears to be nearing its end.

A jury in the U.S. District Court for the Northern District of Illinois awarded Motorola Solutions, thought by many as the successor to one-time telecommunications behemoth Motorola, $764.6 million stemming from a case involving copyright infringement and the illegal theft of its trade secrets.

$345.8 million of the relief is compensatory damages, $418.8 million is in punitive damages. Motorola was able to fetch such a high figure because it filed for worldwide damages for its trade secret misappropriation claims under the federal Defend Trade Secrets Act.

In a complaint initially filed back three years ago, on March 14, 2017, Motorola alleged that Hytera - full name Hytera Communications Corporation Limited, a Chinese radio manufacturer – leveraged Motorola's trade secrets in its own digital mobile radio (DMR) products. Motorola added in an amended complaint the next year that the company copied its source code, violating U.S. copyright laws, and that as a result of the theft, Hytera had made off with over 10,000 confidential documents and millions of lines of code.

Hytera formerly served as a distributor for Motorola until 2001. In its 2017 complaint, Motorola alleged that the company lagged behind when it comes to radio technology, namely two-way radio tech; a fact that spurred the company to develop its own digital two-way radios. Hytera's plans to steal Motorola's trade secrets relied on recruiting personnel who had access to it already. By getting these employees to download confidential technical documents before leaving the company, in particular an employee it deemed a double agent, Hytera had little trouble stealing Motorola’s data.

Motorola claims the data Hytera took, information on hands free communications, location technology, and emergency alarms, eventually went on to be used in walkie talkies it produced.

“This company stole for years Motorola proprietary technology,” Motorola CEO Greg Brown said last month. “They stole thousands of documents, they stole millions of lines of source code, and to this day, their products are still being sold with stolen technology.”

In a court filing filed last year, a memorandum opinion and order, the court said discovery revealed that Hytera copied Motorola's confidential and copyrighted code that forms the foundation for essential functions, instructions, and user interfaces in Motorola's digital radio products into Hytera's competing products."

The similarities were glaring; Hytera's source code “contains at least tens of thousands of lines of source code that include wording, formatting, and capitalization of elements that are identical to or inconsequentially different than the corresponding lines of Motorola's copyrighted source code," according to the court filing; even typos were reproduced.

The company took steps to conceal its theft to avoid detection Motorola claims, too. “Hytera's employees discussed not just how to copy Motorola's source code, but how to conceal that copying," the memorandum and order read.

Hytera, for what it's worth, contested the court's verdict and said at the time it'd be appealing it.

“Hytera is disappointed by this court’s verdict, and respectfully disagrees with the jury. Hytera believes the verdict is unsupported by the evidence presented at trial. Hytera will appeal the verdict and is prepared for the appeal procedures ahead, which may take multiple years. Hytera maintains its faith that the American justice system will ultimately provide a fair outcome in this matter," the company said in a statement following the ruling.

While Motorola has been awarded millions in the lawsuit, the maximum it requested in damages, some bits and pieces of the case continue to linger, namely a global injunction the company is levying on Hytera to cease its trade secret misappropriation and copyright infringement.

The injunction would prevent Hytera from selling any products that contain Motorola's trade secrets but both parties are awaiting a decision by the case's judge.

Hytera didn't dispute that its products contain stolen trade secrets; it admitted during trial that it has Motorola's confidential documents in its possession its products still contain stolen source code. Its angle is that Motorola waited years after knowing about the theft to file a suit in order to make more money in damages.

The news is the latest volley in a continuous back and forth legal battle between the two companies. Previously the U. S. International Trade Commission' ruled the Chinese company infringed on Motorola's patents. Two other courts in Germany in 2018 ruled in Motorola's favor in two patent infringement lawsuits involving Hytera as well.

Tags: IP theft

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Chris Brook

Chris Brook is the editor of Data Insider. He is a technology journalist with a decade of experience writing about information security, hackers, and privacy. Chris has attended many infosec conferences and has interviewed hackers and security researchers. Prior to joining Digital Guardian he helped launch Threatpost, an independent news site which is a leading source of information about IT and business security for hundreds of thousands of professionals worldwide.