The ITC Flexes Its Trade Secrets Muscles Again
The ITC Flexes Its Trade Secrets Muscles Again
The Government Circuit has once more affirmed the ITC’s broad jurisdiction to research and, if required, remedy extraterritorial misappropriation of trade secrets. According to this along with other recent decisions, it appears as though the ITC will still be a substantial forum for trade secret battles.
Background Concerning the ITC’s Analysis
The Commission implemented an analysis captioned Certain Rubber Resins & Systems for Manufacturing Same, on June 26, 2012, with different complaint filed by SI Group, Corporation. The complaint alleged violations of Section 337 from the Tariff Act of 1930 (19 U.S.C. § 1337) associated with the importation in to the U.S. of rubber resins according to misappropriation of trade secrets. SI Group asserted the presence of 17 trade secrets concerning the synthesizing of certain resins that are utilized to manufacture tires, which the general mixture of the 17 position secrets is itself a protectable trade secret. SI Group’s complaints named many respondents, including several Sino Legend entities.
The ALJ Found Respondents’ Extraterritoriality Arguments “Ludicrous”
At each stage of adjudication, the Respondents contended that SI Group’s trade secret claims couldn’t produce a piece 337 breach because Section 337(a)(1)(A) doesn’t affect extraterritorial activity. Based on Respondents, all the supposedly unfair practices happened overseas aside from under $30,000 price of accused Sino Legend items that were imported in to the U . s . States. Particularly, SI Group alleged that Sino Legend misappropriated its trade secrets in China by getting a former SI Group worker in China which Sino Legend used the trade secrets in China.
On Next Month, 2013, the presiding ALJ issued a preliminary Determination, locating a breach of Section 337. See our previous discussion here. The ALJ rejected Respondents’ argument that Section 337(a)(1)(A) doesn’t apply extraterritorially as “ludicrous” considering the government Circuit’s TianRui decision, that they stated “addressed this unique issue.”
In TianRui, the government Circuit held the ITC has authority to exclude imported products in the U . s . States in which the manufacturer involved in unfair competitive practices, for example trade secret misappropriation, entirely outdoors from the U . s . States. The Government Circuit reasoned that “in this situation the Commission hasn’t applied section 337 to sanction purely extraterritorial conduct the foreign unfair activity at issue within this situation is pertinent simply to the extent it leads to the importation of products into the united states causing domestic injuries. Considering the statute’s concentrate on the act of importation and also the resulting domestic injuries, the Commission’s order doesn’t purport to manage purely foreign conduct.” The ALJ figured the Commission had subject material jurisdiction, because SI Group alleged details “nearly identical” towards the details at issue in TianRui.
The Commission Affirmed the ALJ But Didn’t Address Extraterritoriality
On review, the Commission affirmed the first Determination partly and reversed it partly, locating a breach regarding a subset from the respondents. The Commission issued a extended opinion, but didn’t address the ALJ’s conclusion or findings concerning the Commission’s subject material jurisdiction this part of the ALJ’s Initial Determination thus grew to become a choice from the Commission. The Commission issued a ten-year limited exclusion order prohibiting the unlicensed importation of rubber resins made using clear on complainant’s trade secrets.
Respondents Again Elevated Their Extraterritoriality Arguments on Appeal
On attract the government Circuit, Respondents clearly searched for reconsideration from the court’s TianRui decision. Respondents contended that Kiobel v. Royal Nederlander Oil Co., 133 S. Ct. 1659 (2013) conflicts using the court’s TianRui decision, because “Kiobel provides that the statute applies extraterritorially only if it ‘evinces the requisite obvious symbol of extraterritoriality,” but Congress provided no “‘clear indication’ that Section 337(a)(1)(A) reaches conduct occurring wholly outdoors the U . s . States.’”
The Government Circuit’s Rule 36 one-word affirmance from the ITC’s exclusion order unconditionally rejected Respondents’ arguments, such as the argument in line with the Kiobel decision.
Aftereffect of the government Circuit’s Affirmance
The Government Circuit’s decision, though non-precedential, buttresses the ITC’s jurisdiction to research claims of extraterritorial misappropriation of trade secrets, provided products caused by that misappropriation are imported in to the U . s . States. It’s the domestic act of importing such products in to the U . s . Claims that brings about the ITC’s jurisdiction over otherwise extraterritorial conduct. Section 337 thus supplies a effective weapon for entities with significant industries within the U . s . States to make use of to safeguard themselves from and remedy the misappropriation of the trade secrets outdoors the U . s . States.