A Chinese telecommunications company, Hytera Communications, has been ordered to pay a $50 million fine and serve a five-year probation term for a criminal conspiracy to steal proprietary technology from American firm Motorola Solutions Inc. The scheme involved recruiting and hiring Motorola engineers to illicitly obtain trade secrets related to digital mobile radio technology.
Key Takeaways
- Hytera Communications fined $50 million and sentenced to five years probation.
- Conspired to steal trade secrets from Motorola Solutions Inc. since 2006.
- Stolen technology was used to develop competing products at a lower cost.
- Motorola suffered an estimated $214 million in lost profits.
- Seven Hytera employees were indicted, with one pleading guilty.
The Conspiracy Unveiled
Beginning as early as 2006, Hytera Communications, based in China, systematically recruited and hired engineers who were formerly employed by Illinois-based Motorola Solutions. These engineers were then directed to extract proprietary and trade secret information from Motorola without authorization. The stolen data included crucial source code and other details related to Motorola’s advanced digital mobile radio technology, which had been developed over years of significant research and design investment.
Impact and Consequences
Hytera utilized the pilfered information to develop its own products, enabling the company to enter the digital radio market and compete directly with Motorola. This was achieved at a fraction of the cost and time that Motorola had invested in its original development. The scheme continued until 2020. U.S. District Judge John J. Tharp, Jr. determined that Hytera’s actions caused Motorola to suffer approximately $214 million in lost profits. While restitution was ordered, it was offset by previous payments made by Hytera stemming from a civil judgment.
Legal Proceedings and Future Oversight
Hytera pleaded guilty last year in the Northern District of Illinois to a federal charge of conspiracy to steal trade secrets. In addition to the substantial fine, the company’s five-year probation includes strict conditions. Hytera must maintain an effective compliance program and provide annual reports on its compliance efforts to the government. The sentencing was announced by United States Attorney Andrew S. Boutros for the Northern District of Illinois and FBI Special Agent-in-Charge Douglas S. DePodesta. The Department of Justice’s National Security Division provided valuable assistance in the case. Seven Hytera employees were indicted in 2021 for their alleged roles in the theft, with one, Gee Siong Ko, pleading guilty in 2022 and agreeing to cooperate with the ongoing investigation. Warrants remain active for the arrest of the six other indicted individuals.
Sources
- Chinese telecom company fined $50 million for conspiring to steal technology from American company by
‘hiring’ its engineers to steal, The Times of India.
