Misappropriators Beware: Motorola Court Embraces Extraterritorial Application of the Defend Trade Secrets Act
On March 5, 2020, the U.S. District Court for the Northern District of Illinois entered a final judgment on a jury verdict of approximately $764.6 million in a high profile trade secret misappropriation case — Motorola Solutions, Inc. v. Hytera Communications Corp. Ltd. This judgment was made possible, in large part, by an earlier order from the district court holding that the Defend Trade Secrets Act (“DTSA”) applies to misappropriation that occurs outside the United States if (1) the misappropriator is a U.S. citizen or entity, or (2) “an act in furtherance of” the misappropriation occurred domestically. While Motorola is not the first case to recognize that the DTSA provides a private right of action for foreign misappropriation, it appears to be the first substantive analysis of extraterritorial application of the DTSA to date.
The Motorola case centered on allegations that Hytera, a Chinese rival of Motorola, misappropriated Motorola’s trade secrets to develop and sell a competing digital radio. Motorola claimed that Hytera hired three engineers away from Motorola’s Malaysian office, and that those engineers stole thousands of technical, confidential Motorola documents containing trade secrets and source code. According to Motorola, Hytera used Motorola’s trade secrets to develop a state-of-the-art digital radio that was functionally indistinguishable from Motorola’s digital radios. Hytera proceeded to sell its newly developed radios both internationally and in the United States. While the key actions that enabled Hytera’s acquisition of Motorola’s trade secrets took place overseas, certain actions related to the misappropriation occurred in the United States. In particular, Hytera advertised, promoted, and marketed products embodying the allegedly stolen trade secrets at numerous domestic trade shows.Read More