Chinese Telecom Company Charged With Stealing Motorola’s Trade Secrets

(Spencer Platt/Getty Images)

A Chinese company and several former employees of Motorola have been charged with conspiracy to steal trade secrets from Motorola, according to a statement by the Department of Justice (DOJ) on Feb. 7.

The charges allege that Hytera, a telecommunications company headquartered in Shenzhen, China, led a concentrated effort to recruit Motorola employees, promising higher salaries and benefits in exchange for the employees’ theft of trade secrets from Motorola.

Hytera was designated as a national security threat by the Federal Communications Commission (FCC) in March of last year, alongside Chinese telecom firms Huawei and ZTE. The company responded at the time by saying that the FCC’s decision was “anti-competitive.”

The DOJ said that certain technologies Hytera produced were wholly dependent on technology it systematically stole from Motorola.

According to a heavily redacted copy of the indictment unsealed on Feb. 7, Hytera and the recruited employees, who are unnamed, used Motorola’s proprietary and trade secret information to accelerate the development of Hytera’s digital mobile radio (DMR) products, train Hytera employees, and market and sell Hytera’s DMR products throughout the world from 2007 to 2020.

The alleged conspiracy began after a 2004 announcement by the FCC, which said that all DMRs would need to use a narrower bandwidth by 2013.

Motorola began developing new technologies to meet the new requirements and, beginning in 2007, Hytera allegedly started stealing them. By 2010, Hytera was selling the products through wholly-owned U.S. affiliates.

Messages from email chains written by the accused are quoted throughout the indictment and provide a less than flattering picture of Hytera, the Motorola employees, and their efforts.

“We have/will signed the NDA and some of our lies may cause problems once Motorola finds out,” one former Motorola employee wrote in May 2008, referencing the non-disclosure agreements that they had signed with Motorola.

The former Motorola employees described themselves as “technical people,” focused on both software and hardware development.

In one message, a conspirator described Hytera as a “company setup from purely copying.”

In another, they explained their goal was to “reuse as much as possible from the existing Motorola product.”

In still another, a conspirator described the theft of some 30 gigabytes of proprietary data, saying, “We are trying to grab whatever we can.”

“Do you have anything in mind that you need while we are still here? Maybe something in [the Motorola database]. :-),” the conspirator wrote in February 2008.

According to the indictment, the tech that Hytera subsequently sold to customers throughout the world was built on original and modified software that included Motorola source code. It further alleges that the trade secrets were stolen from an internal server in Illinois.

In order to remotely access the server from a Hytera location in Malaysia, the indictment said, one needed a login, password, security token, Motorola laptop, and supervisory approval.

When questioned on the matter during an earlier civil case, one of the Hytera conspirators said that the company had fired them in 2018. In truth, they continued to work for the company through 2020, the indictment said, though the document did not make clear in what capacity the employment was.

In all, the indictment includes 21 charges alleging that Hytera and the former Motorola employees stole proprietary and trade secrets that took Motorola years of original research and design.

If convicted, Hytera faces a potential criminal fine of three times the value of the stolen trade secret to the company, including expenses for research, design, and other costs that it avoided.

A representative from Hytera told The Epoch Times that the company would plead not guilty.

“Hytera is disappointed to read the charges in the indictment, and respectfully disagrees with the allegations,” the representative said in an email.

The Epoch Times has reached out to Motorola for comment.

This article was updated to include a comment from Hytera.