Case of the Day: Motorola v. Hytera
Posted on April 2, 2019
The case of the day is Motorola Solutions, Inc. v. Hytera Communications Corp. (N.D. Ill. 2019). Motorola sought a forensic examination of several Hytera computers in China. The court denied the motion for reasons mostly having to with the timeliness of the request, which we need not consider here. But in an extended dictum, the court went on to explain that Motorola had failed to show that ordering the examination would be consistent with Chinese domestic law and that the Aerospatiale factors weighed against allowing the discovery under the FRCP rather than requiring a request under the Hague Evidence Convention.
The relevant Chinese law is Article 277 of the Civil Procedure Law, which provides:
The request for and provision of judicial assistance shall be conducted through the channels stipulated in the international treaties concluded or acceded to by the People’s Republic of China. Where no treaty relations exist, the request for and provision of judicial assistance shall be conducted through diplomatic channels.
The embassy or a consulate in the People’s Republic of China of a foreign state may serve documents on, investigate, and take evidence from its citizens, provided that the law of the People’s Republic of China is not violated and that no compulsory measures are adopted.
Except for the circumstances set forth in the preceding paragraph, no foreign agency or individual may, without the consent of the competent authorities of the People’s Republic of China, serve documents, carry out an investigation or collect evidence within the territory of the People’s Republic of China.
The judge rejected Motorola’s view of the law, noting that the examination Motorola sought was not voluntary—if it were voluntary Hydera would simply have agreed to the inspection. He also rejected Motorola’s view that Article 277 only applies when the discovery is to be conducted by a third party Chinese national rather than a foreigner: even if that were a correct view of the law, here the discovery was to be overseen by the US court.
The judge’s discussion of the Aerospatiale analysis is also interesting. We haven’t done one of these in a while, so it is worth reminding ourselves of the factors: (1) the importance of the evidence to the litigation; (2) the specificity of the request; (3) whether the information originated in the United States; (4) the availability of alternate means to obtain the information; and (5) whether noncompliance with a discovery request would undermine important interests of the United States, or compliance would undermine important interests of China.
The first factor favored the Convention. Motorola already had a lot of discovery, and it had contended that the discovery it already had went a long way towards proving what it wanted to prove.
The second factor also favored the Convention. On the one hand, Motorola had proposed a “fairly specific keyword search protocol.” But on the other hand, few things are more intrusive than a forensic examination of a computer. The factor was close, but the court held that it weighed against Motorola.
The third factor weighed against Motorola, not because the source code that was at issue in the case originated in China, but because it originated in Malaysia, a third country. The logic of this isn’t really clear to me. It’s one thing if the information originates in the country where the discovery is to be taken, but if it originates in a third country, why does that weigh against FRCP discovery? The decision does not delve into this.
The fourth factor is the one factor that clearly favored Motorola. Motorola had demonstrated that there is no other source for the information it sought. It is, though, a bit hard to square this conclusion with the discussion of the first factor—there the court noted the volume of discovery Motorola already had.
The relative interests of the states were a toss-up. Yes, the US has an interest in enforcing its IP laws. Yes, China has an interest in enforcing its own rules about discovery in Chinese territory. Perhaps the tie-breaker was the fact that the source code at issue was not developed in the US but in Malaysia, though I am not sure why that deserves much weight.