Litigators of the Week: Kirkland Trio Send a $765 Million Message in Tech Theft Case
"We asked, what kind of a world would this be if a big company could sidestep responsibility by simply saying, 'That was them, not us.' This was a significant message to all other companies considering this type of excuse for bad conduct. "
Our Litigators of the Week are Kirkland & Ellis partners Adam Alper, Brandon Brown and Mike De Vries, who bagged a $764.5 million jury verdict for Motorola in massive trade secret fight with Hytera, a multi-billion dollar company based in China.
After a three-and-a-half month trial in Chicago federal court, the jury took just 2.5 hours to award Motorola every penny it sought—$345.7 million in compensatory damages, and $418.8 million in punitive damages. It’s a verdict that serves as a warning to other overseas companies trying to dodge responsibility for IP theft.
Alper, Brown and De Vries discussed the win with Lit Daily.
Lit Daily: Who is your client and what was at stake?
Adam Alper and Mike De Vries: Our client was Motorola Solutions, which has been around for about a century and is one of the best-known American technology companies. The case involved Motorola’s claims that Hytera—a multi-billion dollar company based in Shenzhen, China—stole thousands of confidential Motorola documents and millions of lines of source code, in one of the largest technology thefts against an American company in history.
Tell us about the underlying technology. Why is it worth fighting over?
Brandon Brown: The products at issue are digital two-way radios that are used all over the world for security, safety, and critical industry applications. These aren’t just the walkie-talkies we played with as kids—they are complex and sophisticated pieces of technology that must work flawlessly each and every time they’re used.
The underlying technology has taken Motorola decades to develop—they’ve perfected the hardware, the operating system, the signal processing, and dozens of other core aspects critical to this technology; and Hytera stole literally all of that after it couldn’t figure out how to develop the technology itself.
Who was opposing counsel?
Mike De Vries: Hytera hired several large law firms over the course of the case, including Steptoe & Johnson (who was trial counsel) and Finnegan Henderson.
Who are the members of your team? What strengths did they bring to the representation?
Adam Alper: Mike and I co-led the case, but the success is due to our team of superstar partners, associates and staff.
Brandon primarily led the technical case, and handled many key witnesses at trial, including important cross-examinations.
Leslie Schmidt, Akshay Deoras, and Chris Lawless led our response to Hytera’s statute of limitations defense, which Hytera devoted substantial time to. This included the presentation of multiple Motorola witnesses during Hytera’s case-in-chief that Hytera called adversely. This was a key moment in the case, and those witnesses stood up to substantial cross-examination, which they handled truthfully and adeptly. Josh Simmons and Reza Dokhanchy also presented key Motorola witnesses on the trade secret technology. Those are just examples—Mike has more.
Mike De Vries: Megan New and Leslie Schmidt led Motorola’s damages case—which the jury agreed with down the line, awarding Motorola all of the compensatory and punitive damages it asked for to the dollar. Leslie put on our damages expert twice, once during our case-in-chief and once in rebuttal, and Megan cross-examined Hytera’s damages expert as well as putting on our industry expert.
Justin Singh was also a key player throughout the case, in charge of discovery and then many other issues at the trial. Justin also took a key examination of a deponent whose video testimony was played at trial. Ben Herbert, Amir Freund and Barbara Barath were also key players.
The team had great depth, with many highly talented attorneys pulling late hours over many weeks, nearly all of whom have been to trial with us many times. And we cannot say enough about the paralegals and staff, who were instrumental to the success of this trial.
Brandon Brown: It was a great team. In particular, our technical case would have been impossible without Yimeng Dou and Kyle Calhoun, who spent years investigating how deeply contaminated Hytera’s products were with Motorola’s trade secrets.
This was a long trial, lasting from Nov. 6, 2019 (when the jury was selected) to February 14, 2020 (the verdict). How did you maintain your energy and focus?
Brandon Brown: This was where this team really shined and I’m so proud to have been part of it. The trial was a marathon by any standard, and lasted a lot longer than any of us expected. And yet, every member of our team executed professionally and flawlessly—from the amazing secretarial support, to our flawless paralegal execution, and the core team of brilliant and dedicated associates who built this case.
I think a big part of what allows that to happen is the trust and respect that this team—who have spent a lot of time going to trial together over the last decade—have for one another. And, I think critically, Mike and Adam lead that attitude from the top. I think that permeates through everything we do and is critical to our success.
What was your overarching theme? What strategies did you use to reinforce your message?
Mike De Vries: Motorola showed how, throughout the litigation and for the entirety of the trial, Hytera was completely unapologetic and refused to accept responsibility for its illegal actions. As revealed by Motorola at trial, Hytera’s own executives and former lawyers told Hytera what it had done was wrong, and that it needed to stop selling its products based on stolen Motorola trade secrets. And yet Hytera still would not listen—Hytera is selling the products containing Motorola’s trade secrets to this day.
We are currently pursuing global injunctive relief in briefing before the court, and even now, after the verdict, Hytera refuses to remediate, take responsibility, or apologize.
Adam Alper: One of Hytera’s primary arguments was that, to the extent the alleged theft occurred, it was perpetrated by a few “bad apples” at the company, and as such Hytera should not be responsible.
The jury fully rejected that argument, having been convinced by Motorola that Hytera must take responsibility for its executives’ and managers’ illegal conduct, and that any other result would send a very negative signal big companies around the world who hurt people.
We asked, what kind of a world would this be if a big company could sidestep responsibility by simply saying, “That was them, not us.” This was a significant message to all other companies considering this type of excuse for bad conduct.
Brandon Brown: One of the biggest themes we saw develop throughout the case and at trial was Hytera’s failure to take responsibility for what it was doing with Motorola’s technology. Through our deposition questions all the way to our trial examinations, this was a core issue that we repeatedly highlighted.
But for me, the pieces fell into place on this theme when Mike crossed Hytera’s executive Jim Luo, who told the jury that he had investigated the allegations and concluded the theft was very minimal. This was completely untrue, though—Mike’s cross revealed that Mr. Luo had not even seen the key evidence in this case, from Hytera’s own files, until the days before he testified.
Mr. Luo admitted during cross that the jury saw these critical Hytera’s emails and documents before Mr. Luo had. So, as Mike adeptly explained through his cross examination, Hytera had even intentionally blinded its own executive to the core facts of its theft in this case. Definitely not the behavior of a company trying to take responsibility.
During trial, you presented extensive evidence that Hytera stole thousands of confidential Motorola documents and millions of lines of source code. Tell us a bit about how you built your case.
Adam Alper: We worked hard on the technical proof, but also maintained a parallel focus on the overarching concepts of right and wrong. Mike elicited critical testimony from Hytera executives that, despite the theft, Hytera is “here to stay,” confirming an important theme for us—that Hytera was not willing to take responsibility for its conduct.
Brandon’s presentation of our technical expert is another example: they communicated the vast evidence of theft and copying to the jury in an understandable and compelling way, while addressing the wrongful nature of Hytera’s acts. Brandon and Akshay’s cross-examinations of Hytera’s technical experts confirmed the theft and Hytera’s inability to make the technologies at issue on their own.
Mike De Vries: One key to successfully trying this case was taking a massive amount of evidence and technical complexity, and distilling it down to clear explanations of why Motorola is right and Hytera is wrong. So many people on the team contributed to that. For example, Adam’s closing argument did a masterful job at cogently going through and summarizing three months’ worth of testimony—an extremely challenging and crucial task that directly led to the favorable verdict just a few hours later.
Brandon Brown: The scale and scope of theft is truly without precedent—Hytera had tens of thousands of Motorola’s confidential documents and millions of lines of source code in its possession while trying to develop a competing product. They used a lot of the code literally line for line, but also engaged in a systematic effort to obscure its theft by changing its code to “look different” than Motorola, so Motorola would never figure it out when it tested Hytera’s radios.
To make matters worse, we proved at trial that Hytera engaged in efforts to delete its own source code (it is literally “missing” code that runs on its products to this day), as well as documents and emails. It took literally years of incredible investigative work by our team members and expert witnesses to unravel what Hytera had done.
Hytera promised five times in a row during opening statements that it would bring its CEO Qingzhou Chen to testify and “explain it all.” But he never actually appeared. How did you frame this to the jury?
Brandon Brown: Once we realized that Hytera wasn’t going to bring its CEO, despite its promises, we knew this was something we had to make clear to the jury because of his critical role in Hytera’s theft.
We set the stage first through expert testimony, and then re-emphasized this point repeatedly through cross examination of Hytera’s witnesses. The critical moment, though, was during Adam’s closing argument—he brilliantly tied it all together, explaining that Chen’s refusal to face the jury was just another example of Hytera refusing to take responsibility for its actions.
This is where the jury really mattered, Adam explained, because Hytera and Chen would have to listen to this jury’s verdict if it was meaningful enough. I still get chills just thinking about how powerful and true that message really was.
This has been a multi-front battle. How has litigation unfolded in other forums?
Mike De Vries: This has been a truly global dispute, with litigation in multiple courts in the U.S., the International Trade Commission, Germany, China, and Australia, among other countries. Thus far, Motorola has been successful in all instances, including the exclusion order we won for Motorola in the ITC against all of Hytera’s products.
Hytera still sells the products based on Motorola’s confidential information, despite the admissions by its executives at trial. What’s next?
Brandon Brown: Once the verdict came in, demonstrating the jury’s resounding and undeniable condemnation of Hytera’s actions, Mike explained to Judge [Charles] Norgle how critical a permanent injunction is, given Hytera’s refusal to stop selling products laden with Motorola’s trade secrets. The judge set a hearing immediately for the following week, giving the parties time to brief the issue, and is expected to rule this week on our request for a permanent injunction enjoining Hytera from selling products contaminated with Motorola’s trade secrets.
This is one of several wins in competitor v. competitor cases for your team. What’s the secret to the team’s success?
Mike De Vries: Over the years, Adam and I have focused our practice on multi-venue, often global competitor v. competitor trials, where we are playing both offense and defense, on many different types of claims, both intellectual property-related, antitrust, and others. We have been fortunate to develop this expertise, which allows us to deliver results to our clients. For example, on three such cases in the past 18 months, we have brought in over $1.3B in verdicts and settlements.