Chinese walkie-talkie maker Hytera resumes sales of two-way radio products after US court suspends global ban

The US Court of Appeals for the Seventh Circuit on Tuesday suspended the global sales injunction against Hytera’s two-way radio products
That temporary stay included the further accumulation of US$1-million-per-day fines against Hytera that was earlier ordered by a US District Court

China technology

Iris Dengin Shenzhen

Published: 6:30pm, 17 Apr 2024

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Chinese walkie-talkie maker Hytera Communications Corp has resumed global sales and distribution of its two-way radio products after a United States court temporarily lifted an injunction, which barred the company from selling those devices as part of a years-long trade-secrets dispute with rival Motorola Solutions.

The US Court of Appeals for the Seventh Circuit on Tuesday suspended the global sales injunction, worldwide notice requirement and further accumulation of US$1-million-per-day fines against Hytera that was ordered by the US District Court for the Northern District of Illinois earlier this month, according to a notice on the Shenzhen-based company’s website.

“The company will work closely with global partners to immediately resume normal business activities and initiate the sale of related products,” Hytera said in a filing to the Shenzhen Stock Exchange.

Hytera’s shares rose by the daily maximum limit of 10 per cent on Wednesday, following the stay of the global sales ban.

Two-way radio products make up the bulk of Hytera’s professional wireless communications business. Its PNC460U smart push-to-talk-over-cellular device is designed for use in hazardous environments like chemical plants, oil refineries and steel mills. Photo: Hytera

The US District Court for the Northern District of Illinois on April 2 temporarily enjoined Hytera from the global sales and distribution of its two-way radio products, pending the Chinese firm’s full compliance with the US court’s anti-suit injunction orders. Hytera announced on April 7 that it had suspended sales of those products in compliance with the court’s order.

The products covered by the sales injunction – “including portables, mobiles, base stations and repeaters”, according to the court order – contain two-way radio technology, which is at the centre of Motora Solutions’ trade-secrets and copyright-infringement dispute against Hytera. US telecommunications equipment specialist Motorola Solutions is an independent business from smartphone maker Motorola Mobility, which was acquired by Lenovo Group in 2014.

Hytera, however, warned of potential uncertainties in the development of the case. “The case is still in the appeal stage, and the company will take various countermeasures and make the best efforts to revoke the [ban],” the firm said.

The long-drawn-out case shows the continued pressure faced by Hytera, which had been indicted for conspiracy to commit theft of trade secrets by the US Justice Department, according to federal documents unsealed in 2022. Motorola Solutions in 2020 won a US$764.6 million verdict from a federal jury in Chicago in its trade-secrets dispute against Hytera, which denied the accusations and appealed the case.

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The US district court’s recent order banning Hytera’s global walkie-talkie sales triggered a heated debate on Chinese social media, with some calling the sanctions against the firm “harsher” than Washington’s blacklisting of Huawei Technologies.

A global sales ban on its two-way radio systems would pose a significant blow to Hytera, which generated 83 per cent of its 2022 revenue from professional wireless communications devices that largely comprise two-way radio products.

Schaumburg, Illinois-based Motorola Solutions initiated its court dispute against Hytera in 2017, accusing the Chinese firm of recruiting and hiring the US company’s employees and directing them to take proprietary information and trade secrets without authorisation.

After it was indicted by the US Justice Department in early 2022, Hytera filed a case with the Shenzhen Intermediate People’s Court later that year and sought a ruling that its new H-series products do not infringe Motorola Solutions’ trade secrets and copyrights.

In March this year, the US district court ruled that Hytera’s litigation in Shenzhen was in contempt of its sanctions and issued anti-suit injunction orders to force Hytera to drop that mainland case. Hytera on April 8 said that it had dropped its case in Shenzhen.