U.S. Trade Secret Law Has Global Reach -

U.S. Trade Secret Law Has Global Reach

Nov 24, 2024Jeremy ParkinsonFinance0

The recent Seventh Circuit decision in Motorola Solutions Inc. (MSI) v. Hytera Communications Corp. Ltd. (decided July 2, 2024) sets a strong precedent for the global reach of U.S. trade secret law, underscoring the importance of compliance and vigilance for businesses operating internationally. This post explores the key takeaways and implications for business leaders and legal teams alike.
The Case at a GlanceFacts: Motorola alleged that Chinese competitor Hytera hired former Motorola engineers in Malaysia, who stole trade secrets to develop competing digital mobile radio (DMR) products. While the misappropriation occurred outside the U.S., Hytera marketed and sold the infringing products globally, including in the U.S. This led to significant damages awarded to Motorola. The case resulted in an award of $135.8 million in compensatory damages based on Hytera’s worldwide sales.
Key Legal Holding: The court held that under the Defend Trade Secrets Act (DTSA), U.S. trade secret law applies extraterritorially if “an act in furtherance of the offense” occurs in the U.S. Here, marketing stolen trade-secret-derived products in the U.S. sufficed to trigger this provision.
U.S. Jurisdiction Expands: When It Applies

Act in Furtherance Within U.S.:

Any action that furthers the trade secret misappropriation—like marketing, selling, or even demonstrating stolen products within the U.S.—can bring the case under U.S. jurisdiction.

Global Sales:

Once U.S. jurisdiction is established, damages can include profits from worldwide sales if linked to the misappropriated trade secrets.

Criminal and Civil Cases:

The DTSA’s extraterritorial application, originally limited to criminal cases, extends to civil disputes when the statutory criteria are met.

Business Implications

Global Trade Secret Compliance: Companies must ensure robust trade secret protection and compliance programs across all jurisdictions, akin to those used for anti-bribery or antitrust compliance.

Litigation Strategy: Businesses that suffer trade secret theft—regardless of where it occurs—should consider the U.S. as a potential venue for litigation. The possibility of recovering damages from global sales adds significant leverage.

Employee Training: Employee actions, even abroad, can create U.S. jurisdiction risks. Regular training on U.S. trade secret laws is essential.

Takeaways from the Court’s Decision

The DTSA applies broadly, reflecting Congress’s intent to protect U.S. businesses in a globally interconnected world.

Companies using or competing with U.S.-based technologies should prioritize legal risk assessments in international operations.

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