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Telecom Alleges Theft of Radio Technology Trade Secrets

by Chris Brook on Wednesday February 9, 2022

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New charges unsealed this week allege a China-based company stole valuable trade secrets – source code and hardware designs - over the course of 13 years.

Motorola is continuing its fight against a Chinese telecom over charges some of its former engineers left the company and took valuable technology with them.

In an indictment unsealed on Monday, the company alleged that Hytera Communications Corp. – a two-way radio manufacturing company based in Shenzen - convinced some of its employees who had access to Motorola's proprietary and trade secret information on its digital mobile radio (DMR) technology to take it to kickstart development of its own products. Some of the employees cited are former Motorola employees who were recruited by Hytera years ago.

While the indictment was returned way back in November 2019, it wasn't unsealed until this week. It names Hytera but the defendants' names are redacted.

The lawsuit claims that from 2007 to 2020 the employees, while still employed at Motorola, stole data on walkie talkies from the company's internal database. The employees, who worked at a software development facility in Malaysia, also sent several emails describing their intent to steal and use the data after joining Hytera.

“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]. :-)” reads an email from one employee.

"Are we going to 'reuse' as much as possible or we need to develop most of them from scratch to avoid patent infringement?" reads another.

According to the court filing, the defendants started slow, accessing dozens of documents, including 59 that had never before been accessed. Following a recruitment event in Malaysia, which at least one of the defendants attended, the company allegedly told them they’d be using the stolen information to develop Hytera products. After getting essentially the green light, the indictment claims a few months later at least one defendant began accessing hundreds of files, including hundreds that had never been accessed before.

The trade secrets - there are 15 named - included source code, strategies, and mainly, design and implementation information.

While much of the data has apparently made its way into Hytera products over the years, some of it, as recently as 2019, still lingers on defendants' personal email accounts, the indictment alleges.

It's far from the first time the two companies have faced off in court. Motorola has a lengthy section on its website breaking down the charges it’s filed against the company.

It's previously won four cases against Hytera, including two patent infringement lawsuits and a U.S. International Trade Commission infringement case. In 2020, it won $764.6 million in a trade secret case after a U.S. District Court for the Northern District of Illinois jury found Hytera had used the company's confidential documents and copyright-protected source code. Hytera claims this sum was later reduced to $221 million.

The company, for its part, has largely denied that it has stolen technology. It has previously appealed verdicts and accused Motorola of abusing its market power to curb competition.

While there’s no arraignment date set yet, if convicted, Hytera would face 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 that it allegedly avoided.

Tags:  IP theft

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