Vapor
A federal judge ruled that China-based LMR manufacturer Hytera Communications owes Motorola Solutions $543.7 million in the lengthy legal dispute between the companies—a reduction of more than $220 million from the $764.6 million in damages awarded to Motorola Solutions when the court ruled on the matter last year.
Judge Charles
Norgle of the United States District Court for the Northern District of
Illinois changed the damages owed by Hytera in an order—dated Jan. 8 but
released today—that notes the need to “the court now agrees that
allowing Motorola to recover Hytera’s profits and Hytera’s avoided costs
on research and development [by utilizing DMR intellectual property
stolen from Motorola] would constitute a double recovery.
“The
court thus finds it improper for Motorola to recover both the $135.8
million in disgorged profits and the $73.6 million in avoided
research-and-development costs … The proper award among these two
alternatives is the $135.8 million disgorgement of Hytera’s profits.”
This
decision also results in a reduction in the punitive damages awarded in
the case, because they were calculated based on the size of the
compensatory-damage award, according to Norgle’s order.
In March
2020, Norgle entered a judgment obligating Hytera to pay $345.8 million
in compensatory damages and $418.8 million—a total of $764.6 million—in
punitive damages for using stolen Motorola Solutions trade secrets and
copyrighted software code to build its popular DMR product portfolio.
Under
Norgle’s new order, Hytera is liable for paying Motorola Solutions
$272.1 million in compensatory damages and $271.6 million in punitive
damages, for a total of $543.7 million—a $220.9 million reduction
compared to the damages awarded in March 2020.
Last month, Norgle
denied a Motorola Solutions request for a permanent injunction that
would have prevented Hytera from selling much of its DMR portfolio
worldwide, but he ruled that Hytera should pay royalties to Motorola
Solutions. By Thursday, the companies are supposed to agree to a
negotiated royalty payment plan, or each will submit a proposal for
Norgle to consider, according to the December ruling.
With this
in mind, Norgle’s latest order does not address the amount of money
Hytera would have pay Motorola Solutions in royalty fees but reiterates
the need for such compensation.
“Hytera’s avoided R&D [research-and-development cost] does not constitute a fully paid up royalty,” according to Norgle.
Hytera
Communications had its U.S. subsidiaries—Hytera America and Hytera
Communications America (West)—file for Chapter 11 bankruptcy protection
in May 2020, citing financial issues caused by Norgle affirming the
$764.6 million award against Hytera in March. Last month, a bankruptcy
judge in California verbally approved the sale of Hytera U.S. assets not
included in the case before Norgle to a new Hytera Communications
entity called Hytera US. Motorola Solutions is scheduled to file a brief
with the bankruptcy court tomorrow about what products should be
excluded from the December sale to Hytera US, and Hytera attorneys are
scheduled to file their response by Jan. 19, according to
bankruptcy-court documents.
In the meantime, the Hytera America
and Hytera Communications America (West) subsidiaries in the U.S.
continue to exist, according to sources familiar with the matter.
These
legal decisions and filings are the latest in a series of protracted
disputes between Hytera Communications and Motorola Solutions that began
in March 2017.
During the federal-court trial that began in
November 2019, Hytera attorneys acknowledged that three former Motorola
(the company had not yet changed its name to Motorola Solutions at the
time) employees—Samuel Chia, Y.T. Kok and G.S. Kok—accessed more than
7,000 Motorola documents prior to each of them leaving and joining
Hytera shortly in 2008. However, Hytera attorneys described the three
engineers as “bad apples” who did not share with anyone else at Hytera
that the DMR trade secrets and software were taken from Motorola.
Source:urgentcomm.com
Author:Donny Jackson
Editor:IPRdaily-Vapor