Motorola Solutions, Inc. v. Hytera Commc'ns Corp.

495 F.Supp.3d 687

MOTOROLA SOLUTIONS, INC., et al., Plaintiffs,

v.HYTERA COMMUNICATIONS CORP. LTD., et al., Defendants.

Civil Action No. 1:17-cv-1973

United States District Court, N.D. Illinois, Eastern Division.

Signed October 19, 2020

Benjamin A. Herbert, Pro Hac Vice, Ali-Reza Boloori, Pro Hac Vice, Benjamin Aaron Yaghoubian, Pro Hac Vice, Christopher Lawless, Pro Hac Vice, Justin Singh, Pro Hac Vice, Michael W. De Vries, Pro Hac Vice, Kirkland & Ellis LLP, Los Angeles, CA, Brandon Hugh Brown, Adam R. Alper, Pro Hac Vice, Akshay S. Deoras, Pro Hac Vice, Barbara Nora Barath, Pro Hac Vice, Natalie Flechsig, Pro Hac Vice, Reza Dokhanchy, Pro Hac Vice, Kirkland & Ellis LLP, San Francisco, CA, Joshua L. Simmons, Pro Hac Vice, Leslie M. Schmidt, Pro Hac Vice, Kirkland & Ellis LLP, New York, NY, Amir Freund, Pro Hac Vice, Kirkland & Ellis LLP, Palo Alto, CA, David Rokach, Megan Margaret New, Kirkland & Ellis LLP, Chicago, IL, Joseph Kuan Liu, Pro Hac Vice, One LLP, Newport Beach, CA, for Plaintiff Motorola Solutions, Inc.

Benjamin A. Herbert, Pro Hac Vice, Ali-Reza Boloori, Pro Hac Vice, Benjamin Aaron Yaghoubian, Pro Hac Vice, Christopher Lawless, Pro Hac Vice, Justin Singh, Pro Hac Vice, Michael W. De Vries, Pro Hac Vice, Kirkland & Ellis LLP, Los Angeles, CA, Brandon Hugh Brown, Adam R. Alper, Pro Hac Vice, Akshay S. Deoras, Pro Hac Vice, Natalie Flechsig, Pro Hac Vice, Reza Dokhanchy, Pro Hac Vice, Kirkland & Ellis LLP, San Francisco, CA, Joshua L. Simmons, Pro Hac Vice, James E. Marina, Pro Hac Vice, Leslie M. Schmidt, Pro Hac Vice, Kirkland & Ellis LLP, New York, NY, Amir Freund, Pro Hac Vice, Kirkland & Ellis LLP, Palo Alto, CA, David Rokach, Megan Margaret New, Kirkland & Ellis LLP, Chicago, IL, Joseph Kuan Liu, Pro Hac Vice, One LLP, Newport Beach, CA, for Plaintiff Motorola Solutions Malaysia SDN. BHD.

Boyd T. Cloern, Brian Peter Johnson, Pro Hac Vice, Christopher Alan Suarez, Jared Robert Butcher, Pro Hac Vice, Jessica Ilana Rothschild, Pro Hac Vice, John William Toth, Pro Hac Vice, Kassandra Michele Officer, Pro Hac Vice, Leah Margaret Quadrino, Pro Hac Vice, Li Guo, Pro Hac Vice, Scott M. Richey, Pro Hac Vice, David Shea Bettwy, Pro Hac Vice, Steven K. Davidson, Pro Hac Vice, Steptoe & Johnson LLP, Washington, DC, Daniel Steven Stringfield, Tron Yue Fu, Steptoe & Johnson LLP, Chicago, IL, Joshua M. Ryland, Pro Hac Vice, Mark Wallace McDougall, Pro Hac Vice, Todd R. Tucker, Pro Hac Vice, Calfee, Halter & Griswold LLP, Cleveland, OH, for Defendant Hytera Communications Corporation Ltd.

Alice Elizabeth Loughran, Pro Hac Vice, Boyd T. Cloern, Pro Hac Vice, Brian Peter Johnson, Pro Hac Vice, Christopher Alan Suarez, Jared Robert Butcher, Pro Hac Vice, Jessica Ilana Rothschild, Pro Hac Vice, John William Toth, Pro Hac Vice, Kassandra Michele Officer, Pro Hac Vice, Li Guo, Pro Hac Vice, Michael J. Allan, Scott M. Richey, Pro Hac Vice, Steptoe & Johnson LLP, Washington, DC, Daniel Steven Stringfield, Tron Yue Fu, Steptoe & Johnson LLP, Chicago, IL, Joshua M. Ryland, Pro Hac Vice, Mark Wallace McDougall, Pro Hac Vice, Todd R. Tucker, Pro Hac Vice, Calfee, Halter & Griswold LLP, Cleveland, OH, for Defendant Hytera America, Inc.

Boyd T. Cloern, Brian Peter Johnson, Pro Hac Vice, Christopher Alan Suarez, Jared Robert Butcher, Pro Hac Vice, Jessica Ilana Rothschild, Pro Hac Vice, John William Toth, Pro Hac Vice, Kassandra Michele Officer, Pro Hac Vice, Li Guo, Pro Hac Vice, Scott M. Richey, Pro Hac Vice, Steptoe & Johnson LLP, Washington, DC, Daniel Steven Stringfield, Tron Yue Fu, Steptoe & Johnson LLP, Chicago, IL, Joshua M. Ryland, Pro Hac Vice, Mark Wallace McDougall, Pro Hac Vice, Todd R. Tucker, Pro Hac Vice, Calfee, Halter & Griswold LLP, Cleveland, OH, for Defendant Hytera Communications America (West), Inc.

ORDER

CHARLES RONALD NORGLE, Judge

Defendants’ Rule 50(b) motion for judgment as a matter of law and Rule 59 motion for a new trial and/or remittitur [953] is denied. The Court agrees with Defendants that the Copyright Act disgorgement and the DTSA unjust enrichment awards were equitable in nature, and the Court's findings of fact and conclusions of law on those issues will be set out in a separate Order consistent with the below.

On those issues, the Court agrees with the jury's advisory verdict.

STATEMENT

On November 6, 2019, a jury was selected for trial in this matter. Over the course of the next three-and-a-half months, the trial dealt with complex technological, factual, and legal issues. On February 14, 2020, the jury returned a verdict in favor of the Plaintiffs, Motorola Solutions Inc. and Motorola Solutions Malaysia SDN. BHD. (hereinafter "Motorola"), against the Defendants, Hytera America, Inc., Hytera Communications America (West), Inc., Hytera Communications Corporation Ltd. (hereinafter "Hytera"). The jury awarded to Motorola the full amount for which it had been permitted to argue—$345,761,156 in compensatory damages and $418,800,000 in punitive damages, for a total of $764,561,156. The jury deliberated for roughly two hours.

Both parties have filed numerous post-trial motions. The scheduling and ability for the parties to appear in court on these motions was and has been complicated by the COVID-19 pandemic. Hytera's motion pursuant to Fed. R. Civ. P. 50(b) and Rule 59 is the subject of this Opinion. In its motion, Hytera argues that the Court made numerous errors related to the trial, ranging from actions taken at jury selection (which allowed the empanelment of an allegedly biased jury), substantive evidentiary decisions, administrative and procedural rulings, and others. Simply put, the Court disagrees, and Hytera has not met the high standard for judgment as a matter of law, or for a new trial, or for reconsideration of previous orders or remittitur under Rule 59(e). The jury and the Court were not biased, the procedures in this case were proper, the legal decisions were correct, the legal elements of Motorola's claims were met, and the jury returned a verdict and award that are proper under the law and supported by overwhelming evidence that was submitted at trial—evidence, the Court notes, which was robustly and meticulously challenged by skilled counsel for Hytera at each and every turn.

I. BACKGROUND

Before engaging the substantive issues, a brief, high level background based on the evidence presented is provided. By no means does this background capture, or even attempt to capture, the full scope of the evidence presented at trial. Rather, the context is helpful in evaluating the more specific facts discussed in the analysis section of this Opinion.

For decades, dating back to the late 1980's and into the 2000's, Motorola developed technology to create certain specific digital radios. In 2006, internal Hytera documents submitted by Motorola showed that Hytera was having difficulty in creating comparable radios. In June 2007, the president of Hytera Chen Qingzhou reached out to Motorola engineer G.S. Kok, who worked for Motorola in Malaysia. Chen told Kok that he was looking to set up a potential research and development center for Hytera in Malaysia. In those discussions, Chen made clear to Kok that he was hoping to make Hytera a public company and have it listed on a stock exchange—referencing the NASDAQ in an early email. Shortly thereafter, Chen and Kok negotiated Kok's departure from Motorola for Hytera. In one email, Chen offered Kok 600,000 shares in Hytera, which Chen referred to as "really a great amount of money."¹

Shortly after Kok joined Hytera, Kok expressed in an email that he was surprised that even after Hytera had been working on the relevant digital radio project for three years, Hytera did "not even have a prototype." Kok then stated in an email that Hytera needed an "injection of subject matter experts" in order to leapfrog Motorola in that market. Shortly thereafter, Hytera hired two additional Motorola Malaysia engineers—Y.T. Kok and Sam Chia. The evidence at trial showed that Y.T. Kok and Sam Chia, between them, downloaded more than 10,000 technical documents from Motorola's secure database and brought them to Hytera. At the time of trial, Motorola argued that more than 1,600 of those documents were still within Hytera's databases. When Y.T. Kok was hired by Hytera, he initially maintained his employment with Motorola² while surreptitiously also working for Hytera.

In June 2008, shortly after the addition of Y.T. Kok and Sam Chia, several emails circulated within Hytera which the entire digital mobile radio ("DMR radio") group was copied on, including one with a list of questions about issues that needed to be resolved in order for Hytera to create a DMR radio. Chia forwarded one of those emails to Y.T. Kok and stated that he should focus on some of the specific questions. The same day, Y.T. Kok downloaded 50 technical documents from Motorola's database; the next day, he downloaded an additional 83; the third day, he downloaded 40 more. Again, in all, more than 10,000 technical documents were downloaded and brought to Hytera from Motorola.

Broadly, among the files taken were Motorola's source code for the DMR radio project. Segments of Motorola's source code were later directly inserted into Hytera's product. One exhibit at trial illustrated that in some cases misspelled words (which had no impact on the functionality of the code) appeared in both the Motorola code and the Hytera code. Additional evidence showed that at times Hytera re-wrote Motorola's code to conceal that it had been used. Motorola presented testimony and exhibits showing the code and Motorola technical documents being circulated among Hytera engineers, at times with the Motorola logo removed and replaced with a Hytera logo, and at times still labeled with Motorola's logo.

Eventually, Hytera developed a radio that was, as described at trial, functionally indistinguishable from the DMR radio developed by Motorola. Hytera sold that radio for years and, according to Motorola, continues selling the...