Chao News client reporter Zhu Gaoxiang
On April 8, affected by the news of the "global ban", Hytera opened with a one-word limit.
Hytera informed in a pop-up window on its official website that according to the order of the U.S. court, Hytera is not allowed to sell any products containing walkie-talkie technology anywhere in the world until further notice.
Motorola and Hytera have a long-standing feud, and it has been seven years since the two sides engaged in a trade secret and copyright infringement lawsuit in 2017.
According to Chao News, the Hytera Mall Mini Program can no longer be opened.
Image source: Hytera's official website
Seven years of grappling around the walkie-talkie
As early as 2017, Motorola has launched prosecutions against Hytera in many countries around the world.
On March 14, 2017, Motorola sued Hytera and its two U.S. subsidiaries in Shenzhen, China, in the U.S. District Court for the Northern District of Illinois, alleging trade secret theft and copyright infringement, and seeking injunctive relief, compensatory damages, and punitive damages, according to information published on Motorola Solutions' official website.
Image source: Motorola Solutions' official website
Motorola alleges that Hytera willfully infringed its intellectual property rights and misused its trade secrets, and that its illegal actions were assisted by three engineers who resigned from the company to join Hytera, and who played a key role in developing Hytera's infringing products using the stolen Motorola solution technology. In the period prior to their resignation, more than 7,000 highly confidential documents, including confidential technical, marketing, sales, legal, and other types of trade secret materials, related to Motorola Solutions technology, were maliciously accessed, downloaded, and transmitted through a series of egregious misrepresentations and orchestrated illegal acts.
At the same time, Hytera also began to sue Motorola in China. On November 14, 2017, Hytera sued Motorola Solutions (China) Investment Co., Ltd., Motorola Solutions (China) Co., Ltd., and Motorola Solutions (China) Co., Ltd. Beijing Branch to the Beijing Intellectual Property Court because it believed that Motorola had monopolized the Chengdu metro dedicated communication market. However, more than two years later, all claims were dismissed.
On March 5, 2020, the judge of the Northern District Court of Illinois issued a first-instance judgment in the case, upholding the jury's verdict and awarding Hytera, U.S. Inc., and U.S. West Corporation, Inc. to Motorola Solutions $345.7612 million in damages and $418.8 million in punitive damages, totaling $764.5612 million.
In 2021, U.S. courts reduced the amount of damages to about $544 million, plus costs such as interest and attorneys' fees. Hytera's 2023 semi-annual report shows that the amount involved in the case is about 4.747 billion yuan.
In June 2022, Hytera filed a lawsuit with the Shenzhen Intermediate People's Court to rule that the H series products newly designed and developed by the company did not infringe Motorola's trade secrets and copyrights. After the Shenzhen lawsuit went to trial, Motorola filed a motion for an anti-suit injunction with the U.S. District Court for the District of Illinois, requesting that Hytera be ordered to withdraw the lawsuit in Shenzhen.
On March 25, 2024, a U.S. court granted Motorola's request. Thereafter, the court found that Hytera had failed to fully comply with its anti-suit injunction and issued a contempt penalty against Hytera on April 2.
Image source: Screenshot of Shenzhen Stock Exchange
On April 8, Chinese walkie-talkie giant Hytera announced on the Shenzhen Stock Exchange that the company recently received a U.S. court order that the company failed to fully comply with its anti-suit injunction, temporarily prohibiting the company from selling two-way radio technology products worldwide, and imposing a fine of $1 million per day until the company fully complies with the anti-suit injunction.
Hytera pointed out that at present, the company has withdrawn the lawsuit in the Shenzhen case, and at the same time suspended the sale of two-way radio technology products as required, and has applied to the U.S. court to revoke the above order, and is currently undergoing hearings in the U.S. court. The Company will take further countermeasures to revoke the above order in the shortest possible time.
The order may put considerable financial pressure on Hytera
Founded in 1993 and headquartered in Shenzhen, Hytera is the world's leading provider of dedicated communications and solutions, according to Hytera's official website.
With more than 90 branches around the world and nearly 10,000 professionals from more than 40 countries, Hytera provides government and industry users in more than 120 countries and regions with the right products and solutions.
Image source: Hytera's official WeChat
As a leading enterprise in the private network communication industry, Hytera's products and solutions have served large-scale events around the world, providing communication support services for many major international events, including the 2016 Summer Olympics in Rio de Janeiro, the 2017 FIFA Confederations Cup, the 2018 FIFA World Cup, the 2022 Beijing Winter Olympics, and the 2022 Qatar World Cup.
In January 2024, Hytera still stated that the company's traditional litigation-related products have basically been discontinued, and the H series products are fully replacing the previous generation of products, and are not affected by the lawsuit, and have been fully promoted globally and highly recognized by the market. However, this statement is no longer applicable under the "global ban" order.
Moreover, Hytera's current profitability is relatively limited. According to the performance forecast announced by Hytera at the end of January 2024, the annual net profit attributable to the parent company in 2023 will be between 60 million and 90 million yuan. As of the end of the third quarter of 2023, its cash and cash equivalents balance was $457 million. However, in the face of high penalties, Hytera obviously has a lot of financial pressure.
Image source: Hytera's official website
The injunction issued by the U.S. court posted by Hytera in its official position mainly includes three contents: prohibiting the offering, sale, import, export, or distribution of any two-way radio products anywhere in the world, a daily fine of US$1 million until Hytera complies with the court order, and a prohibition on relying on any orders or judgments in the Chinese lawsuit.
Hytera announced that according to Hytera's audited financial data in 2022, the company's professional wireless communication equipment manufacturing revenue accounted for 83.31% of operating income, of which two-way radio technology-related products were the main components. Obviously, the ban has a significant impact on Hytera's business.
On April 8, after Hytera received a U.S. court order, the company responded to an interview with the media, saying, "At present, we are making every effort to deal with (the U.S. court order) and strive to revoke it as soon as possible, and the company will make an announcement as soon as possible after the revocation is successful." ”
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