IP Law Daily, TRADE SECRETS—N.D. Ill.: Hytera must pay an additional $70 million for breaching post-trial royalty obligations to Motorola, (Sep 4, 2025)

By Saurabh Kashyap, B.A., M.A., LL.B., LL.M.

Despite a court order, Hytera continued to profit from Motorola’s misappropriated technologies while evading royalties owed under a remedial order tied to its trade secret misappropriation.

The federal district court in Chicago, Illinois, held Hytera Communications Corporation Ltd. in civil contempt for failing to pay court-ordered royalties to Motorola Solutions, Inc. on sales of its new "H-Series" digital mobile radios. The decision arose from a finding that Hytera's ostensibly redesigned products continued to embody trade secrets and copyrighted material that had already been adjudicated as unlawfully appropriated. As a result, Hytera was ordered to pay over $70 million in unpaid royalties and interest, with the court concluding that the H-Series products were, in substance, little more than a repackaged version of the infringing models identified at trial (Motorola Solutions, Inc. v. Hytera Commc’ns Corp. Ltd., No. 1:17-cv-01973 (N.D. Ill. Aug. 22, 2025)). (Motorola Solutions, Inc. v. Hytera Communications Corporation Ltd., No. 1:17-cv-01973 (N.D. Ill. Aug. 29, 2025)).

Background. Motorola Solutions, Inc. is an internationally recognized leader in the development of digital radio communications systems. Its proprietary DMR (Digital Mobile Radio) platform serves public safety, utility, and commercial sectors worldwide. This platform represents decades of cumulative investment in embedded systems, communication protocols, and software architecture.

Hytera Communications Corporation Ltd., headquartered in Shenzhen, China, is a global competitor in the same sector. During 2008–2010, Hytera recruited several engineers from Motorola’s Malaysia unit. Motorola later discovered that, in the weeks prior to their resignations, these employees downloaded tens of thousands of internal documents and source code files, forming the basis of Motorola’s claims for trade secret misappropriation and copyright infringement.

The litigation revolved around 21 trade secrets and a substantial body of copyrighted source code. These trade secrets encompassed not merely isolated technical elements, but complex software frameworks—such as the DSP Framework, protocol stacks, ROSAL/HOSI middleware, and integration testing platforms—that worked in combination to power Motorola’s radio systems. Motorola described these as “compilation” trade secrets: individual modules that, though not always novel in isolation, formed a unique and commercially valuable architecture when configured together.

Motorola also asserted extensive copyright protections over its source code base, architectural diagrams, and internal design documents. At trial, it presented detailed expert evidence showing that Hytera’s product architecture—branded as the “iSeries” and “Gen 2”—replicated these elements at both structural and behavioral levels.

A jury returned a unanimous verdict in favor of Motorola in 2020, awarding $764.6 million, including punitive damages for willful and malicious misappropriation. In January 2021, the court reduced the damages to $543.7 million due to a finding of double recovery. Following the verdict, the district court declined to enter a permanent injunction under the Defend Trade Secrets Act (DTSA), citing the potential disruptive impact on users of Hytera’s public safety radios. Instead, the court imposed a compulsory royalty framework, requiring Hytera to pay Motorola per-unit royalties on continued sales of infringing products. On appeal, the Seventh Circuit affirmed the judgments against Hytera for trade secret theft and punitive damages; however, it ruled Motorola was not entitled to damages based on its sales of the infringing product overseas; it remanded for further consideration of the copyright infringement damages award.

The issue now before the court arose from contempt proceeding initiated in 2024 at the behest of Motorola, which alleged that Hytera’s post-verdict H-Series products were functionally and architecturally derived from the same misappropriated materials and thus subject to royalty obligations. Hytera, in response, claimed the H-Series was developed via a “clean room” process that excluded all prior contamination and constituted an independent product.

Interpretation of the royalty order’s scope. One of the threshold issues was whether the royalty order applied to products introduced after the trial. Hytera insisted that the order applied only to specific model numbers listed in Motorola's 2021 post-verdict filing and that the H-Series, not having been identified at that time, fell outside the ambit of the order.

That interpretation, the court found, was overly formalistic and ignored the remedial intent underlying the royalty framework. Emphasizing substance over nomenclature, the court clarified that a renamed or slightly modified product remains covered by the royalty order if it continues to embody the adjudicated IP. Drawing upon Georgia-Pacific Corp. v. U.S. Plywood Corp., 318 F. Supp. 1116 (S.D.N.Y. 1970), the ruling stressed that royalty obligations attach to the use of intellectual property—not to arbitrary marketing distinctions.

Assessment of substantial similarity. Motorola’s expert, Dr. Steven Wicker, conducted a forensic code and architecture analysis of the H-Series. His findings showed that critical frameworks—including the DSP system, middleware, and integration protocols—were materially unchanged from the Gen 2 architecture deemed infringing at trial. Even where Hytera had altered filenames or refactored syntax, the core structure and functionality of the software stack remained identical.

Further undermining Hytera’s position were its own internal documents, which acknowledged reuse of “legacy” modules from prior generations. Product development notes and architectural diagrams submitted during discovery revealed that Hytera engineers viewed the H-Series as an iterative improvement on the existing Gen 2 platform, rather than a ground-up redesign.

Clean room defense and evidence of contamination. Hytera’s principal defense was that it had implemented a clean room process. In theory, such a process involves isolating development teams from prior contaminated material and reconstructing functionality based solely on lawful design inputs. Yet, the court found Hytera’s clean room protocols to be deeply flawed.

Personnel assigned to the H-Series project had previous exposure to the infringing codebase, and no meaningful barrier was established between the redesign team and Motorola-derived documents. An internal Hytera server containing Motorola’s stolen source code remained accessible throughout the development period, with no forensic verification to ensure it had been purged. Multiple team members had worked on both the Gen 2 and H-Series projects and participated in cross-team design reviews.

These facts led the court to conclude that Hytera’s redesign was not insulated from taint. Referencing DSC Commc’ns Corp. v. DGI Techs., Inc., 898 F. Supp. 1183 (N.D. Tex. 1995), the ruling reiterated that a valid clean room defense demands rigorous personnel segregation and documentation protocols—standards which Hytera failed to meet.

Use and preservation of compilation trade secrets. A pivotal aspect of the ruling concerned compilation trade secrets. The court accepted Motorola’s contention that its trade secrets did not reside solely in specific code fragments, but in the integrated arrangement of modules and processes that constituted the DMR ecosystem. Even where some individual components might be found in public specifications, their combination and configuration remained proprietary.

Hytera’s alleged redesign preserved that configuration almost entirely. The middleware hierarchy, protocol interfacing logic, and audio processing pipeline all exhibited the same design logic as their predecessors. Citing Minn. Mining & Mfg. Co. v. Pribyl, 259 F.3d 587 (7th Cir. 2001), the court reaffirmed that compilation trade secrets are protectable where the selection and arrangement of elements provide competitive value.

Evidence of willful noncompliance. Beyond technical overlap, the court identified a pattern of calculated evasion. Hytera did not seek declaratory relief or clarification of its obligations before launching the H-Series. Instead, it acted unilaterally in assuming the new products were exempt. The company also failed to comply with previously ordered escrow requirements and had concealed its attempts to procure contradictory rulings in parallel Chinese litigation.

This history of obstruction—combined with its refusal to remit any royalties on H-Series sales—supported a finding of bad faith. The contempt sanction was thus not merely compensatory but also grounded in deterrence.

Calculation of royalties and interest. Based on sales records, Hytera had sold over 738,000 H-Series terminals and 30,000 repeaters. Applying the previously established per-unit royalty rates—$80.32 per terminal and $378.16 per repeater—the court calculated the principal royalty obligation at $59.3 million. An additional $11.1 million in prejudgment interest was awarded, resulting in a total sanction exceeding $70 million.

Hytera’s argument that it was entitled to a jury determination of royalties was dismissed. As the court observed, civil contempt proceedings are equitable in nature, and the royalty order had already set the methodology for calculating damages.

The Case is No. 1:17-cv-01973.

Judge: Pacold, M.

Attorneys: Benjamin A. Herbert (Kirkland & Ellis LLP) for Motorola Solutions, Inc. Boyd T. Cloern (Steptoe & Johnson LLP) for Hytera Communications Corp. Ltd.

Companies: Motorola Solutions, Inc.; Motorola Solutions Malaysia Sdn. Bhd.; Hytera Communications Corp. Ltd.

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