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US prosecutors: Chinese walkie-talkie-maker Hytera stole Motorola secrets
Lured workers with bigger pay. Workers walked – then they talked
Updated The US Department of Justice announced on Monday that Chinese walkie-talkie manufacturer Hytera had been indicted on 21 counts related to an alleged theft of trade secrets from US-based competitor Motorola Solutions.
According to unsealed court documents, the Shenzhen-based company recruited and hired employees from Motorola Solutions in Malaysia from 2007 until 2020. Hytera asked them to bring along proprietary information that was used to develop and market its own digital mobile radio (DMR) technology – aka those walkie-talkies, it is claimed.
In exchange, the former Motorola Solutions employees enjoyed bumps to their salary and benefit packages, the Dept of Justice claimed. The court document also lists select associated individuals facing charges for the alleged possession or attempted possession of stolen trade secrets. Their names and some details are redacted, although they are described in this court filing [PDF] as "former Motorola employees recruited to Hytera in 2008 and 2009."
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The staff who shifted the docs didn't disclose they were moving to a Motorola competitor, it is claimed. Nor did they feel it was necessary to cover their tracks, according to US prosecutors, with emails some sent containing revealing quips, to wit:
- Are we going to 'reuse' as much as possible or we need to develop most of them from scratch to avoid patent infringement?
- [i]f want it to be fast and reuse as much as possible from the existing Motorola product, then we may need less headcount.
- [Redacted] and I have been working very hard in backing up all the information. We are trying to grab whatever we can. We will surely need some of them when we are there. I think we have a total of 30G [gigabytes of data] now. Do you have anything in mind that you need while we are still here? Maybe something in [Motorola's Database]. :-)
- What we can grab for now is all sw [software] related information and trying to get from [Motorola's Database] for general project related information. Any hw [hardware] information you need in particular? we can try to grab from hw as well ....
- This company setup from purely copying one .. haha ... buy otehr [sic] ppl radio can copy earlier :p
One of the mails perhaps said the quiet part out loud, as the author allegedly observed: "It is going to cause a lot of problem as we are technical people and bring along a lot of knowledge. We have/will signed the NDA and some of our lies may cause problems once Motorola finds out."
A conviction for Hytera could mean a fine of up to three times the value of the alleged stolen trade secrets to the company. That value will include expenses for research, design, and other costs Hytera avoided by allegedly copying someone else's homework.
Custodial sentences aren't off the table, either – the DOJ said a federal district court judge will determine those at a later date, if necessary.
A Hytera statement declared that the company "respectfully disagrees with the allegations," and plans to plead not guilty.
Meanwhile, Motorola's executive vice president and general counsel Mark Hacker has pledged to "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."
Motorola been sounding the alarm on its complaints of patent infringement and trade secret misappropriation since at least 2017.
In February of 2020, the Chicago-based entity won a civil judgment and was subsequently awarded $764.6 million, which was eventually reduced to $543.7 million.
In January 2021, Motorola was forced to pay Hytera more than £800,000 ($1.5 million) after losing a UK Court of Appeal case over claims the Chinese company threatened to "retreat to China" and evade a previous judgment.
The Motorola case only adds to Hytera's woes: in 2018 it was included on a US military "do not buy" list. ®
Updated to add:
A Hytera spokesperson said in a statement to The Register: "Hytera is disappointed to read the charges in the indictment, and respectfully disagrees with the allegations."
They added: "Hytera looks forward to pleading not guilty and telling its side of the story in court.
"Hytera is committed to honoring the intellectual property rights of others, and to complying with the laws of every jurisdiction in which it operates. Hytera will continue to provide high quality and innovative products and services to its customers throughout the world."
Mark Hacker, executive vice president general counsel and chief administrative officer at Motorola Solutions, told The Reg: "We will continue our civil litigation against Hytera in jurisdictions around the world..."
He added: "We are committed to protecting our technology – for the benefit of our industry, customers, channel and distribution partners, shareholders and other stakeholders."