China-US Technology War Continues, Hytera Accused Of Stealing Motorola Cellular Radio Technology

JAKARTA - The US Department of Justice said Monday, February 7 that it has filed criminal charges against China-based telecommunications company Hytera. They accused the company of conspiring with employees of Motorola Solutions Inc. to steal digital cellular radio technology from the American company.

In a partially edited indictment opened in Chicago, the government said Shenzhen-based Hytera Communications Corp recruited Motorola employees in Malaysia to steal proprietary trade data about radios, known as walkie-talkies.

The indictment mentions Hytera directly, but removes the names of the other defendants in the case. At least some of them are former Motorola employees who are alleged to have been recruited by the Chinese company. The indictment says Hytera recruited Motorola employees from 2007 to 2020, and that these workers received higher salaries and benefits than they received at Motorola in exchange for stealing trade secrets.

Hytera was charged with 21 criminal counts including conspiracy to commit the theft of trade secrets. Hytera and other unidentified defendants were also charged with possessing or attempting to possess stolen trade secrets. If found guilty, Hytera will face a criminal fine of three times the value of the stolen trade secret.

In a statement sent by its attorney, Hytera's said it was "disappointed" by the allegations and "respectfully disagrees with the allegations."

"The indictment is intended to describe the activities of a former Motorola employee that took place in Malaysia more than a decade ago. Hytera hopes to be innocent and tell his story in court," the company said, as quoted by Reuters.

Hytera added that it is "committed to respecting the intellectual property rights of others."

Mark Hacker, executive vice president and general counsel for Motorola, said in a statement that the allegations against Hytera "underline the calculated and deliberate character" of the Chinese company's illegal behavior.

"We will continue our civil litigation against Hytera in jurisdictions around the world to prevent Hytera's serial violations and to raise hundreds of millions of dollars in damages to Motorola Solutions," Hacker added.

All former Motorola employees signed nondisclosure agreements while they were hired and then signed nondisclosure agreements after they left the company, the indictment said. It cites evidence that certain employees gained access to trade secrets through a Motorola database that they had never used in the past.

In one February 2008 email, an unidentified employee emailed another person asking: "Are we going to 'reuse' as much as possible or do we need to develop most of it from scratch to avoid patent infringement?"

Hytera itself is a former distributor of Motorola Solutions products. Motorola Solutions in February 2020 won a jury verdict of US$764.6 million in cases of trade secret theft and copyright infringement against Hytera.

At that time, a federal jury in Chicago found Hytera using confidential Motorola Solutions documents and copyrighted source code to compete in the two-way radio communications market. Hytera told the jury that they had developed their own radio.

Hytera later said the amount Motorola provided in the case was cut by $221 million.

Civil litigation between Hytera and Motorola is mentioned in the indictment. Prosecutors said that in 2017 an unidentified person emailed Hytera's CEO about "aligning" his story with a civil suit.

The indictment shows that a Hytera employee who testified in the civil trial lied under oath by claiming an employee of the Chinese company was fired in fall 2018 for failing to cooperate with the company's internal investigation, when in fact this employee worked for Hytera from December 2018 to at least June. 2020.

The criminal case against the company marks the latest blow to Hytera in the United States.

In November, President Joe Biden signed legislation to prevent Hytera and other Chinese companies such as Huawei Technologies Co. which have been deemed a security threat from receiving licenses for new equipment from US regulators.

Under former President Donald Trump, recipients of federal funds were also barred from using Hytera-made telecommunications equipment.