On March 9, the judge of the Illinois State Court recently made a first-instance verdict in this case, supporting the jury’s verdict and ruling that Hytera, its wholly-owned subsidiary HYTERAAMERICA, INC. (hereinafter referred to as the “US company”), HYTERA COMMUNICATIONS AMERICA ( WEST), INC. (hereinafter referred to as “West America”) paid Motorola US$346 million in damages and US$419 million in punitive damages, totaling US$765 million (approximately RMB 5.334 billion).
Looking back, on March 15, 2017, Motorola and Motorola Malaysia sued Hytera, the U.S. company, and the American West company for infringing their trade secrets in the Illinois court, arguing that some of Hytera’s products violated Motorola’s trade secrets. On August 2, 2018, Motorola filed a request for increased copyright infringement in the Illinois court, arguing that some of Hytera’s products infringed Motorola’s U.S. copyright.
According to the 2018 annual report of Hytera, the company continues to focus on the field of professional wireless communication, mainly engaged in professional wireless communication equipment and solutions such as walkie-talkie terminals and trunking systems, command and dispatch systems, integrated communication and modified vehicles, Internet of Things and emergency communication, and satellite communication. It is a leading enterprise in my country’s private network communication industry and a technology leader in global private network communication. The company’s main products and solutions are widely used in emergency communications, command and dispatch, and daily work communications for government public security departments, public utilities, and industrial and commercial users.
The above-mentioned trade secret and copyright infringement lawsuits entered the trial stage on November 6, 2019 local time in the United States (November 7, 2019 Beijing time). On February 12, 2020 local time in the United States, Motorola finally made it clear in the court hearing that some of the company’s DMR products infringed Motorola’s 21 trade secrets and 4 US copyrights, requiring Hytera, the US company and the US company to infringe its trade secrets. and copyright acts to pay the corresponding compensation.
On February 14, 2020, local time in the United States, a jury in an Illinois court ruled that Hytera, the American company and the American West company infringed one or more of Motorola’s trade secrets and US copyrights, and should pay Motorola 346 million in damages USD 419 million and punitive damages totaling USD 765 million (converted at the average exchange rate of USD in 2019, approximately RMB 5.271 billion).
The 2019 performance report released by Hytera shows that the annual operating income was 8.652 billion yuan, a year-on-year increase of 24.76%; the operating profit was 621 million yuan, a year-on-year increase of 21.50%; the total profit was -4.718 billion yuan, a year-on-year decrease of 1011.92%; net profit -4.775 billion yuan (including 5.334 billion yuan of estimated liabilities), a year-on-year decrease of 1101.41%. Hytera’s total profit and net profit fell sharply year-on-year, mainly due to the impact of the provision of estimated liabilities as a result of the significant litigation ruling with Motorola.
In the latest announcement, Hytera stated that the verdict of this verdict is consistent with the jury verdict. In the “2019 Annual Results Bulletin” disclosed by the company, the estimated liabilities of about RMB 5.334 billion were accrued for matters after the balance sheet date. No new performance changes will be made for the time being. In response to this judgment, the company will file a motion to the Illinois court for retrial and the court to revise the judgment according to law within the limitation period; if the court does not support the company’s motion, the company will appeal to the appeals court to safeguard the company’s legitimate rights and interests. The appeal process generally lasts 2-3 years.
In addition, Hytera also said in a recent reply to the Shenzhen Stock Exchange’s inquiry letter that in recent years, the company has continuously improved its corporate governance level and compliance operations, attached importance to intellectual property protection, increased investment in research and development, and continued to launch products with its own intellectual property rights. of new products. At the same time, under the trend of broadbandization and intelligence in the industry, the company has successfully promoted the transformation of its business from private network communications to private communications and solutions. New products have begun to achieve large-scale sales, and the proportion of revenue has further increased, which will become the main source of revenue growth for the company in the future. important pillars.