Hytera fell to the limit, and the U.S. court ordered Taishan to be overwhelming

The Economic Observer

2024-04-08 17:02Published on the official account of Beijing Economic Observer

On April 8, Hytera (002583. SZ) opens with a down limit. On the morning of the same day, Hytera issued an announcement saying that the U.S. court temporarily prohibited Hytera from selling two-way radio technology products worldwide and imposed a fine of $1 million per day on Hytera until Hytera fully complied with the anti-suit injunction.

On April 8, a reporter from the Economic Observer saw that in the official flagship stores of Hytera Taobao and Jingdong, all walkie-talkie products have been removed from the shelves.

Hytera announced that it has applied to the U.S. court to revoke the above order, and the hearing is continuing in the U.S. court recently. Further countermeasures will be taken to revoke the above-mentioned order in the shortest possible time.

Zhu Keliang, director of the Silicon Valley Office of DeHeng Law Firm, told the Economic Observer that Hytera can apply to the U.S. court to revoke the sales ban and fine. Generally, it takes a week or two to revoke after satisfying the requirements of the U.S. court.

The U.S. court imposed three demands on Hytera: to notify Hytera's distributors, customers, and subsidiaries within three days that they should not continue to sell products, to impose a fine of US$1 million per day, and to dismiss Hytera's lawsuit in the Shenzhen court.

The source of Hytera's U.S. injunction came from a lawsuit filed by Motorola seven years ago. On March 15, 2017, Motorola and Motorola Malaysia filed a lawsuit against Hytera and its subsidiaries U.S. Inc. and U.S. West Inc. for alleged trade secret copyright infringement and patent infringement, and the U.S. Federal District Court for the Northern District Court accepted the case.

On March 5, 2020, the Illinois Court of the United States made a first-instance judgment, holding that Hytera and its subsidiaries U.S. Inc. and U.S. West Inc. infringed Motorola's trade secrets and U.S. copyrights, and should pay Motorola US$346 million in damages and US$419 million in punitive damages, totaling US$765 million, or about RMB 5.334 billion.

However, Hytera refused to accept the first-instance judgment of the US court. In June 2022, Hytera filed a lawsuit with the Shenzhen Intermediate People's Court, claiming that its newly designed and developed H series products did not infringe Motorola's trade secrets and copyrights.

In 2023, the secretary of the board of directors of Hytera once stated on the investor relations platform: "The company does not recognize the amount of the first-instance judgment in the U.S. commercial secret copyright case, nor does it recognize the unfavorable judgment of the subsequent motion based on the first-instance judgment." The company will do its best to fight for the legitimate rights and interests of the company through legal channels, actively cooperate with the court hearing and provide relevant materials and evidence, and has filed an appeal with the U.S. Court of Appeals for the Seventh Circuit, and the case has now entered the appeal stage. ”

After Hytera filed a lawsuit with the Shenzhen Intermediate People's Court, Motorola filed an anti-suit injunction with a U.S. court, requesting Hytera to withdraw the lawsuit in Shenzhen, and the U.S. court approved the anti-suit injunction on March 25, 2024. Hytera was temporarily banned and fined by a U.S. court because the U.S. court found that Hytera had failed to fully comply with its anti-suit injunction.

Zhu Keliang said that under the premise that the US court has already made a judgment, Hytera's actions will be regarded as "contempt of court". The U.S. court's request for Hytera to ban the global sale of two-way radio technology products and impose a fine is a normal but harsh act in global intellectual property cases, with the aim of forcing Hytera to comply with previous rulings of U.S. courts. In addition, Hytera only notified Motorola of the lawsuit a year after filing a lawsuit with the Shenzhen court, which is a bit of a malicious act in the eyes of the American court. Therefore, the U.S. court imposed a more severe penalty on Hytera.

In cross-border intellectual property disputes, there are also practices where the plaintiff or the defendant obtains the jurisdiction of the Chinese court by filing a lawsuit with a Chinese court. Zhu Keliang believes that Hytera filed a lawsuit with the Shenzhen court too late, and should at least do so before the US court makes a judgment.

In the field of walkie-talkies, Hytera and Motorola are competitors. According to the statistics of QYResearch, a consulting agency, Hytera's global walkie-talkie sales market share in 2022 will be about 1.5%, and Motorola will account for about 43%.

According to Hytera's announcement, Hytera's revenue in 2022 will be 5.653 billion yuan, and the revenue of professional wireless communication equipment manufacturing will account for 83.31% of its operating income, of which it is mainly composed of two-way radio technology-related products.

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