Chinese telecom Hytera charged for allegedly recruiting Motorola employees to steal trade secrets

2 years ago 136

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A Chinese telecommunications firm has been indicted over an alleged insider operation aimed at stealing trade secrets belonging to Motorola.

The US Department of Justice (DoJ) said on Monday that Hytera Communications Corp "recruited and hired Motorola Solutions employees and directed them to take proprietary and trade secret information from Motorola without authorization."

According to the indictment, unsealed in the Northern District of Illinois, Motorola and Hytera both moved from the sale of analog mobile radios (walkie-talkies) to digital mobile radios ("DMRs") after a 2004 announcement by the US Federal Communications Commission (FCC) that vendors must make the shift by 2013.

Motorola began working on digital radios in the same year as the FCC's decree.

"Hundreds of Motorola employees spent years developing the hardware and software solutions to design, manufacture, market, and sell DMRs," the DoJ says. "By 2007, Motorola marketed and sold DMR products in the United States, and elsewhere, including the Northern District of Illinois."

Three years later, Hytera launched its own commercial shift to DMRs, with sales made by affiliates in the United States.

However, Shenzhen-based Hytera had recruited a number of former Motorola employees between 2008 and 2009.

"The charges allege that, while still employed at Motorola, some of the employees allegedly accessed the trade secret information from Motorola's internal database and sent multiple emails describing their intentions to use the technology at Hytera," US prosecutors say.

The trade secrets included hardware, radio software architecture, benchmarking strategies, connectivity module designs, and DMR source code.

Furthermore, the DoJ claims that up until 2020, former Motorola employees were recruited with high salaries and more benefits than they were offered by their ex-employer, and they were asked to use Motorola's "proprietary and trade secret information to accelerate the development of Hytera's DMR products, train Hytera employees, and market and sell Hytera's DMR products."

As part of the 21-page indictment, Hytera is being charged with conspiracy to commit theft of trade secrets. The names of others allegedly involved in the scheme have been redacted, but they are also charged with individual counts of possession or attempted possession of stolen trade secrets.

If Hytera is found to be guilty, the telecoms firm may be required to pay up to "three times the value" of the stolen intellectual property, including the expenses incurred for research.

"A federal district court judge will determine any sentence after considering the US Sentencing Guidelines and other statutory factors," the DoJ added.

Hytera told Reuters that it is "disappointed" by the charges, commenting that "the indictment purports to describe activities by former Motorola employees that occurred in Malaysia more than a decade ago. Hytera looks forward to pleading not guilty and telling its side of the story in court."

Motorola has issued a number of legal actions against Hytera in previous years. In a statement, Motorola said the company will continue to pursue Hytera "to prevent Hytera's serial infringement and to collect the hundreds of millions of dollars in damages it owes to Motorola Solutions."