Counsel for Hytera Communications Corp. urged an Illinois federal judge Monday to reject prosecutors' request that it pay more than $290 million in restitution to Motorola Solutions Inc. for conspiring to steal its trade secrets, arguing during the first day of a two-day sentencing hearing that Motorola will be made whole by the more than $600 million Hytera must fork over in a parallel civil case.

U.S. District Judge John Tharp heard nearly seven hours of argument Monday as to what fines and restitution he should impose after Hytera pled guilty in January to one criminal count of conspiracy to steal trade secrets from Motorola relating to its digital mobile radios.

But he warned the parties he wasn't likely to rule after the proceedings continued on Tuesday.

"I'm disappointed to say that, but there's an abundance of material here I want to give due consideration to," the judge said. "I've done that with respect to the briefs that have been filed, but this has been very useful and informative, and I want to go back to my notes and that's going to take a bit of time."

Attorneys for Hytera told Judge Tharp that he should order the Chinese company to continue paying off a steep civil judgment, levy no more than $5 million in fines, and decline to order any additional restitution on top of that.

"If you look at the civil case, there is no question that Motorola will receive hundreds of millions of dollars more than it lost," said Chris Niewoehner of Steptoe LLP.

In the 2021 indictment, prosecutors accused Hytera of hiring engineers from Chicago-based Motorola from 2007 to 2020 and then directing them to swipe confidential information from Motorola before leaving. Hytera used those trade secrets to develop, manufacture and sell a two-way radio similar to one Motorola already had on the market, the indictment alleged.

Motorola had sued Hytera four years earlier over the same alleged theft, and a jury in 2020 awarded Motorola $764 million. A post-trial ruling and a Seventh Circuit review has since chipped away at the total award.

Rachel Cannon, also of Steptoe, said Monday that Hytera has already paid more than $180 million to Motorola and will end up paying a total of more than $600 million in the civil case, including damages, interest, attorney fees and costs, and product royalties, far more than the $173 million in profits Motorola has lost.

She also argued that Motorola is not entitled to all the restitution prosecutors are seeking, saying the government is improperly relying on figures and statements out of the civil trial to back their motions at criminal sentencing. They also don't have the evidence to back their argument that the court should order more than the statutory maximum fine of $5 million under the federal law governing theft of trade secrets, Cannon said.

"Hytera today has a world-class compliance program that neither probation nor the government seek to adjust," she said. "Bottom line, Hytera today is a vastly different company than it was in 2008, when the events in question occurred."

Prosecutors, however, pointed to contentious proceedings in the civil case, which at one point last year included $1 million daily sanctions against Hytera, arguing the company has only paid a fraction of what it owes and has a history of failing to pay civil judgments.

Assistant U.S. Attorney Thomas Peabody said Hytera is still talking about not paying Motorola in full until five years from now, on a civil judgment entered years ago, with a final ruling from the Seventh Circuit on the matter more than a year ago.

"It's just not right, judge," he said.

Prosecutors also insisted the judge shouldn't agree with Hytera and the probation officer that a complexity exception in the federal sentencing guidelines should apply, which provides that if a calculation of pecuniary gain or loss would "unduly complicate or prolong the sentencing process," it shouldn't be used to determine the base fine.

There is no such complexity to this "corporate smash and grab," said Assistant U.S. Attorney Melody Wells.

"There is nothing complicated about this crime, Your Honor. Hytera did what people and organizations have done forever," Wells said. "It lied, it cheated, and it stole in order to get ahead. That's as straightforward as it gets."

Hytera's chairman and founder, Chen Qingzhou, wanted the digital mobile radios developed on his timeline and had a "let them sue us" mentality, she went on. At bare minimum, he tolerated the theft or was willfully ignorant, but there's evidence he was aware of it, Wells said.

"By and large that strategy has worked," she said, adding that Motorola still hasn't received what it's due for Hytera taking a "deliberate shortcut."

"Hytera made tons of money. It is a profitable company. It is a successful company. And it has yet to build a radio that isn't based on the ingenuity of Motorola's," Wells said.

A fine of $60 million is warranted, Wells said, and not imposing a fine of at least that amount would send the wrong message not just to Hytera but to other would-be corporate defendants.

Motorola's general counsel, James Niewiara, also made a brief statement to the court, asking it to hold Hytera accountable for "cheating twice over," first in stealing from an American company and then competing against it based on that theft.

Motorola invested $3.5 billion in a short period to develop the relevant technology, but "Hytera simply stole its way into the market," he said, a "direct affront" to hundreds of engineers, many based in Chicago, who spent tens of thousands of hours developing it.

The civil case is not enough to hold Hytera accountable, Niewiara added, citing the drain of his company resources in dealing with Hytera's litigation and tactics, including "unceasing efforts to postpone payment."

"This has never been a routine commercial dispute," he said.

Prosecutors' recommendation of nearly $290.8 million in restitution includes an estimated $174.4 million in profits that Motorola lost between 2010 and 2019, a period starting with Hytera's launch of its first mobile radio product, according to testimony in the civil case. The restitution amount also includes about $114.2 million in prejudgment interest and almost $2.2 million in attorney fees for Motorola's participation in the criminal case.

Only one of seven individual defendants, Gee Siong Kok, made an appearance in the criminal matter. The remaining defendants are listed as fugitives in the court's docket. Kok pled guilty in December 2022 to conspiracy to steal trade secrets.

Last month, attorneys for Motorola in the civil case asked a Chicago federal judge to order Hytera to pay the $371.7 million it still owes from that judgment, accusing Hytera of delaying its financial obligations.

The government is represented by Melody Wells, Sean K. Driscoll, Steven J. Dollear, Thomas P. Peabody, Wesley A. Morrissette and Vikas Kumar Didwania of the U.S. Attorney's Office for the Northern District of Illinois.

Hytera is represented by Rachel M. Cannon, Christopher S. Niewoehner, Boyd T. Cloern, Scott M. Richey and James L. Brochin of Steptoe LLP.

The case is U.S. v. Hytera Communications Corp. Ltd., case number 1:20-cr-00688, in the U.S. District Court for the Northern District of Illinois.