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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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