US charges China’s Hytera with conspiring to steal technology

The US Justice Department (DoJ) has brought criminal charges against the Chinese telecommunications company Hytera for conspiring to commit theft of trade secrets belonging to Motorola.

The partially redacted indictment, unsealed yesterday in the Northern District of Illinois, alleges that Hytera conspired with former Motorola employees in Malaysia to steal digital mobile radio (DMR) technology developed by the US company.

The charges allege that Hytera recruited and hired Motorola employees and directed them to take proprietary and trade secret information about the radios, known as walkie-talkies, from Motorola without authorisation. The charges add that some of the employees allegedly accessed trade secret information from Motorola’s internal database and sent multiple emails describing their intentions to use the technology at Hytera.

The indictment states the events took place between 2007 and 2020, where Hytera and the recruited employees used Motorola’s proprietary and trade secret information to accelerate the development of Hytera’s DMR products, trained the company’s employees, and marketed and sold its products throughout the world. It also said that Hytera paid the recruited employees higher salaries and benefits than what they received at Motorola.

“Hytera is disappointed to read the charges in the indictment, and respectfully disagrees with the allegations,” a spokesperson from the company told IT Pro. “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 21-count indictment was partially unsealed yesterday in the US District Court in Chicago by court order. Hytera and others, whose details are redacted, are also charged with individual counts of possession or attempted possession of stolen trade secrets.

If convicted, Hytera faces a potential criminal fine of three times the value of the stolen trade secret to the company, including expenses for research, design, and other costs it avoided.

"The 21-count indictment alleges that Hytera engaged in a decade-long criminal conspiracy to steal and use Motorola Solutions’ trade secrets and proprietary information in order to develop and sell digital mobile radios," said Mark Hacker, executive vice president general counsel, and chief administrative officer at Motorola. "According to the indictment, Hytera’s CEO acted in furtherance of the conspiracy, and it appears that among its steps to conceal, misrepresent and hide the conspiracy, Hytera gave false testimony in a United States court. 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."

This isn’t the first time the two companies have appeared in court together, as in February 2020 Motorola won a $764.6 million jury verdict in a trade secret theft and copyright infringement case against Hytera, as reported by Reuters. The jury found Hytera used Motorola’s confidential documents and copyright-protected source code to compete in the market for two-way radio communications. However, Hytera said later that the verdict was cut down to $221 million.