Shenzhen's top seller was fined $1 million by the United States for infringement and all products have been removed from shelves

As the global e-commerce regulatory system continues to upgrade, cross-border sellers have reached the point where they are "terrified at the mention of infringement."

Recently, Hytera, a Shenzhen-based company that is a leader in overseas exports of walkie-talkies and is known as "Little Huawei," was banned from global sales by the United States , sparking widespread discussion in China.

Products banned worldwide

Recently, Hytera issued an announcement on its official website: "According to the decree of the US court, Hytera is not allowed to sell any products containing walkie-talkie technology anywhere in the world until further notice."

The announcement pointed out that due to the company's disadvantage in an overseas infringement case, the company was issued an order by a US court prohibiting it from providing sales, importing, exporting or distributing any two-way radio technology products worldwide. At the same time, the company must pay a fine of US$1 million to the US court every day until it fully complies with the court's injunction.

As of now, Hytera's related products can no longer be searched on relevant e-commerce platforms at home and abroad.

Tracing the origin of this case, behind this sales ban is a seven-year-long patent infringement dispute.

As early as 2017, Motorola accused Hytera of infringing its trade secrets. After several years of litigation, the US court ruled that Hytera must pay up to US$765 million in compensation . Faced with an unfavorable verdict, Hytera did not give up and chose to file a counterclaim in many domestic courts. However, this move failed to reverse the situation, but instead attracted more severe sanctions from the US court.

In April 2024, a U.S. court imposed additional sanctions on Hytera, including a global sales ban, for violating an anti-litigation injunction. Hytera had no choice but to withdraw the lawsuit in the Shenzhen case and removed the relevant products from all platforms.

Be cautious about infringement risks

The implementation of the global ban has undoubtedly dealt a heavy blow to Hytera. As a Shenzhen Stock Exchange-listed company and a leader in the professional wireless communications industry, its revenue in 2022 was as high as 5.653 billion yuan, with overseas market revenue accounting for more than half .

The core products affected by the sales ban - two-way radio technology products - contributed more than 80% of the main business revenue.

This means that if the ban continues, Hytera may face severe challenges such as a significant reduction in profits and even a shaken market position.

An industry lawyer analyzed that the US court's requirement that Hytera ban the global sale of products with two-way radio technology and impose a fine is a normal but relatively severe behavior in global intellectual property cases, and its purpose is to force Hytera to comply with the previous ruling of the US court.

Moreover, Hytera did not notify Motorola until a year after filing the lawsuit in Shenzhen Court. The US court considered this to be malicious behavior. Therefore, the US court imposed a more severe punishment on Hytera.

In fact, there are quite a few cross-border sellers who have fallen into the trap of infringement in recent years, and there are also big sellers with a well-known name like Hytera.

At the end of last year, Amazon's auto parts seller Daotong Technology announced that in order to end a trade secret infringement case as soon as possible, Daotong Technology decided to pay more than 230 million yuan to settle with the plaintiff . However, the company's net profit in the first three quarters of 2023 was only 267 million yuan, almost the same as the high settlement amount.

A series of real cases continue to warn us that the consequences of intellectual property infringement are extremely serious, especially in the current era of increasingly fierce global competition. Ignoring laws and regulations and challenging the patent rights of others may result in an unbearable price.

How many big sellers have suffered because of this, let alone the small sellers who have less ability to bear it?

Previously, an Amazon seller reported on a social platform that he received a TRO for a link that had been removed from the shelves but had never sold a single order, and had $2,000 frozen... He didn't know where the infringement occurred.

It can be seen that under the general trend of e-commerce compliance, major e-commerce platforms and brands are also paying increasing attention to intellectual property protection. Once sellers accidentally touch the landmine, a series of heavy blows such as fund freezing and store closures will come as expected.

In the tide of cross-border e-commerce, adhering to the red line of compliance is the key to success. Every seller should learn lessons from the Hytera incident, strictly prevent any form of infringement, and improve the early warning and prevention capabilities of intellectual property risks. Not only should they resolutely put an end to any active infringement, but they should also improve their ability to identify and prevent various infringement risks to ensure that they are always on the right side of e-commerce compliance.