Weak Hytera Filings Cannot Lift Heavy Sanctions

Following a ruling by an Illinois federal judge on Thursday, Hytera Communications has been mandated to initiate a more substantial fourth request within the Chinese legal system to halt proceedings against Motorola Solutions

According to Lauraann Wood, in an article published on Law360.com, following a ruling by an Illinois federal judge on Thursday, Hytera Communications has been mandated to initiate a more substantial fourth request within the Chinese legal system to halt proceedings against Motorola Solutions. The directive comes alongside daily fines of $1 million and additional sanctions as consequences for Hytera's breach of the court's anti-suit injunction.

Despite asserting having made three prior requests to withdraw the lawsuit, Hytera was instructed by the Chinese court to remain engaged in the legal process. During a remote hearing, Judge Martha Pacold aligned with Motorola Solutions, emphasizing Hytera's obligation to undertake further efforts to comply with the injunction, demonstrating a cessation of pursuit in the foreign litigation. Hytera has indeed submitted three withdrawal requests to date, two of which were made subsequent to the imposition of fines and sanctions. Additionally, they have sought to retract their lawsuit seeking exoneration of their H-series mobile radio from allegations of infringing upon Motorola Solutions' source code, a charge for which they were held liable by a Chicago jury in 2020.

Judge Pacold underscored the necessity for Hytera's renewed request to be framed in a manner conducive to rectifying their involvement in the trial, emphasizing the importance of a genuine effort. She further mandated Hytera to furnish a communication log and permit a deposition of a company representative by Motorola Solutions, aiming to elucidate the circumstances surrounding Hytera's participation in the Chinese litigation. Dismissing Hytera's concerns regarding potential legal infractions in China, Judge Pacold clarified that the orders were solely intended to ensure compliance with the anti-suit injunction.

In response to inquiries about the maintenance of sanctions during compliance efforts, Judge Pacold affirmed their continuation, citing previous experiences with contempt proceedings against Hytera. She emphasized the need for stringent measures to elicit a response from Hytera, expressing skepticism regarding the efficacy of lifting sanctions at present.

The parties also deliberated on the prospect of appealing the withdrawal request to a Chinese reviewing court, with further discussions scheduled for Friday. Neither party responded to requests for comment.

Hytera's Chinese litigation stemmed from a 2020 Illinois jury verdict, which found their former engineers guilty of stealing Motorola Solutions' source code to develop a rival two-way radio. Judge Pacold has characterized this foreign litigation as redundant and harassing, likening it to Motorola Solutions' Chicago lawsuit but involving a different product. The anti-suit injunction mandates Hytera to desist from pursuing the case until contempt proceedings regarding potential royalties owed to Motorola Solutions for their H-series radio are resolved.

Following the initial verdict favoring Motorola Solutions, Hytera negotiated a reduced jury award and averted a permanent sales ban by agreeing to a royalty payment schedule. However, their failure to remit the initial $49 million payment in July 2022 prompted a contempt order from Judge Pacold, prohibiting the sale of any products containing two-way radio technology until payment was fulfilled. Eventually, Hytera settled the outstanding royalties into an escrow account.