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Examining the Extraterritoriality of the DTSA
Can a company's trade secrets misused abroad give recourse on the extraterritoriality of the Defend Trade Secrets Act (DTSA)? Yes, said the 7th Circuit in an important new case in which a claim under the DTSA was asserted. This decision provides a roadmap for future cases involving international trade secret theft, finding liability for foreign misappropriation triggered by a domestic act.
In 2016, Congress enacted the DTSA as an amendment to the Economic Espionage Act (EEA) of 1996, providing a federal cause of action for the misappropriation of trade secrets. The DTSA was designed to unify and strengthen protections for trade secrets and provide a clearer framework for enforcement. While the DTSA clearly applies domestically, its extraterritorial application — whether the DTSA applied to conduct by foreign entities occurring outside the United States — remained unclear. That is, until the Seventh Circuit issued its decision in Motorola Solutions, Inc. v. Hytera Communications Corporation Ltd., earlier this year in July 2024.
The Parties
Motorola Solutions, Inc. (Motorola) competes with Hytera Communications Corporation Ltd. (Hytera) in the market for two-way radio systems. Motorola spent many years and millions of dollars developing proprietary information and trade secrets that were embodied in a line of high-end digital mobile radio (DMR) products. Concurrently, Hytera faced issues developing a similar technology, losing part of its market share because it could not develop its own product to compete with Motorola.
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