It’s Not Just For Patents Anymore: Using The ITC To Combat Theft Of Trade Secrets

by Orrick - Trade Secrets Group

Trade secret theft knows no borders in an age of cybertheft and global corporate espionage.  But U.S. district courts are often too slow and procedurally ill-equipped to help in cases of international misappropriation, with several recent cases never getting off the ground because of problems serving foreign defendants.  Increasingly, victims of foreign misappropriation are turning to the U.S. International Trade Commission — a body armed to hit back at trade secret thieves anywhere in the world.

For companies seeking to remedy the theft of trade secrets by overseas perpetrators, the options have been limited, especially if the thief or the products the thief produces are outside of the United States.  Procedural hurdles like obtaining jurisdiction over a foreign company, or the perpetrator’s resident country being inhospitable to claims by an American victim, can thwart an American corporation’s ability to prosecute the foreign theft of its own trade secrets.

An ITC action doesn’t present these obstacles.  First, the ITC is fast — it takes only about half the time to resolve an ITC investigation as it does to get to a final decision in a federal court.  Second, the ITC is often more effective in international situations because, unlike federal courts, the ITC can enforce jurisdiction over foreign companies and has the necessary tools to get discovery from foreigners.  These two necessary steps often can’t be achieved — or achieved effectively — if an American company chooses to bring suit against a foreign competitor in a U.S. district court.

The ITC has in rem jurisdiction over imported products, which means that no questions of personal jurisdiction need to be resolved.  This also makes procedural issues easier in the ITC when suing a foreign defendant.  For example, while American companies trying to effect service abroad can waste time, resources, and perhaps even fail entirely to serve due to complicated Hague Convention requirements, the ITC simply requires that the respondent be served with the complaint by first class airmail.  And service is deemed complete in the ITC upon mailing — a much lower procedural bar to service than in district courts.

And although the ITC can’t grant monetary damages, it can ban companies from importing and selling their goods in the United States.  This can be a crushing blow to competitors given the size of the U.S. market.

In 2011, the Federal Circuit’s ruling in TianRui Group Co. Ltd. v. U.S. International Trade Commission gave some encouragement to corporate victims looking for legal recourse for trade secret theft that occurs overseas.  Even though the trade secrets at issue (1) were stolen in China, and (2) weren’t being used by the trade secret owner in the United States, the Federal Circuit still held that the case could proceed in the ITC.  (As a side note, the Federal Circuit purported to apply a so-called “federal standard” of trade secret law. Whether such a law exists is a discussion for another time.)  The ITC banned TianRui from importing products made with the misappropriated trade secrets for ten years — a huge financial hit to the company.

Since the TianRui ruling, a growing number of companies have started using the ITC as a forum to stop foreign-based misappropriation of trade secrets, whether perpetrated by competitors or by their own (former) employees.

In January 2013, Robotics company Innovation First International filed a complaint alleging that its competitor Zuru Toys, Inc. had paid off one of IFI’s China-based engineers to steal a design for a robotic fish toy, and that CVS was importing and selling the knock-off toy.  The ITC opened an investigation a few weeks later.

And last month, the ITC issued an order banning importation of electric fireplace units made by the Chinese company Shenzhen Reliap.  Twin-Star, a Florida-based company claimed that one of its former employees who had worked on “kinetic sculptures” including “log sets, ember beds, grates and flames” had stolen its trade secrets and taken them to Reliap.  Soon after hiring him, Reliap started making similar fireplace units — something that neither Twin-Star nor the ITC viewed as a mere coincidence.  In effectively blocking Reliap from the lucrative U.S. market, the ITC showed that it can be an extremely effective venue to address the international misappropriation of trade secrets.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Orrick - Trade Secrets Group | Attorney Advertising

Written by:

Orrick - Trade Secrets Group

Orrick - Trade Secrets Group on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.