A federal judge issued an order this week stating that Hytera Communications must pay Motorola Solutions a franchise to use DMR radio and DMR repeater sales of trade secrets and software copyrights stolen from Motorola more than a decade ago usage fee.

In a 41-page order dated December 14, US District Court Judge Charles Norgle ruled that Hytera must pay Motorola Solutions $80.32 per radio and $378.16 per repeater in perpetual royalties. In March 2017, it sold the Hytera products identified by Motorola in the long lawsuit that began.

According to the order, these royalties are applicable to the sales of affected Hytera products from July 1, 2019. Hytera’s first payment will be based on sales for the past two and a half years, and future payments will be based on quarterly sales. Motorola Solutions will not realize any revenue in the near future because Hytera’s royalties will remain in the escrow account until the appeal of the case runs out or Norgle issues another ruling on the matter.

Hytera has appealed Norgle’s decision in March 2020 to uphold the jury’s 8-0 verdict, convicting Hytera of using Motorola trade secrets and copyrighted software in most of its traditional DMR products. . Hytera currently owes Motorola Solutions US$543.7 million in compensation.

After Hytera and Motorola failed to reach a royalty agreement during the negotiation of the settlement of Hytera and Motorola, Norgle was forced to make a royalty ruling. Norgle ordered the two companies to reject Motorola's settlement as part of the ruling in December last year. An injunction request to prohibit Hytera’s DMR sales.

In this week’s ruling, Norgle admitted that the royalties he determined “are at the higher end of the fees he considered in the hypothetical negotiation model”. Of the 14 legal factors considered, 8 support higher royalties, none support lower royalties, and 6 are considered "neutral", although Norgle considers several neutral factors "irrelevant or inapplicable" "Case.

"Hertera has gained considerable value from its misappropriation of Motorola's trade secrets and infringement of Motorola's copyrights, so that Hytera's products containing Motorola's trade secrets and copyrights cannot operate without them," Nogle said in the order.

"The royalty-free Hytera products are basically worthless, because DMR products are separated from Motorola's trade secrets and copyrights. Motorola has no other motive to license its trade secrets and copyrights to a strict global competitor, which was deemed Responsible for deliberate misappropriation of trade secrets and copyright infringement, especially when Motorola is denied an injunction."

According to Norgle’s order, a key witness from Hytera concluded that “Hytera’s expected average incremental revenue for royalty-free Hytera products is US$313.41 per radio and US$1,155.71 per repeater”. The same witness calculated that Hytera’s expected total cost of bringing DMR products to the market would be US$207.78 per radio and US$682.53 per repeater, and suggested that Hytera’s royalties should be US$31.61 per radio and US$31.61 per radio. A repeater is $200.34.

Motorola proposes that Hytera's royalties should be US$102.00 per radio and US$473.00 per repeater.

In the order, Norgle mainly supports Hytera’s method of calculating royalties, stating that “contrary to Motorola’s proposal, royalties should be based on the fair market value of the relevant intellectual property rights, not just on Hytera’s past profits.”

However, Norgle has an important warning about Hytera's approach.

"Contrary to Hytera’s argument, reasonable royalties do not essentially enable Hytera to obtain a reasonable profit. On the contrary... the relevant query is the fair market value of the relevant intellectual property-the license fee awarded by the court or The royalties “matched or exceeded the profit of the infringer,” according to Norgle’s order.

Norgle ordered the approval of Motorola’s solution requiring Hytera to "maintain the confidentiality of Motorola’s trade secrets and copyrights," but the judge rejected Motorola’s request for Hytera’s solution to "finally...quarantine and delete from the relevant documents it owns." .

Norgle also rejected Motorola Solutions’ request to apply the royalties terms to Hytera US, which is a new US entity created in the bankruptcy proceedings of Hytera’s previous US business units, which were the initial litigation. One side. According to Norgle, this should not affect royalties paid to Motorola Solutions.

"Although Hytera US is not the heir to the interests of the now bankrupt US Hytera defendant, Hytera acknowledges that Hytera US is an affiliated entity of Hytera, and therefore China’s Hytera [Communications] will be obliged to license Hytera’s US sales agreement under royalties. "The order stated that it recognizes Hytera’s position on this matter.

Motorola Solutions also asked Norgle to request Hytera to provide Motorola Solutions with a notice of product redesign, but the judge refused.

"The court held that the notification requirement requested by Motorola will once again convert a reasonable royalty fee into an injunction," Nogel's order stated.

Although Norgle's order determined the amount of royalties, Hytera and Motorola's lawyers are expected to reach an agreement next month to resolve the logistics details surrounding the payment.

Hytera did not respond to IWCE's Urgent Communications' multiple attempts to ensure that the company commented on Norgle's royalty orders.

Motorola Solutions appreciated Norgle's ruling in a statement provided to Urgent Communications of IWCE.

"Hytera has committed one of the largest intellectual property thefts in history through continuous theft and continuous illegal use of Motorola system trade secrets, technology and innovation," Motorola Systems said in a statement. "We are pleased that the District Court has ordered Hytera to pay Motorola Solutions an ongoing royalty fee of US$80.32 per Hytera radio and US$378.16 per Hytera repeater using Motorola Solutions’ stolen trade secrets and copyrighted source code. Royalties.

"These royalties are in addition to the US$630 million previously awarded, including compensatory and punitive damages awarded by the jury, pre-judgment interest, attorney fees and expenses. As we continue to promote innovation and lead the industry , We will continue to devote ourselves to providing first-class products and solutions to global customers."

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