Overseas manufacturers have long known that their products manufactured abroad can be excluded from importation into the U.S. if they infringe U.S. patents, trademarks or copyrights. But a new decision by the U.S. Court of Appeals for the Federal Circuit has expanded the list of acts that can result in the exclusion of articles from import to the U.S. market. Under this decision, trade secret misappropriation that occurred completely outside the U.S. can lead to the exclusion of those articles, if other statutory requirements are met, including the domestic industry requirement. Moreover, any trade secret misappropriation will be judged under a body of U.S. common law.

The controversial panel decision of the Federal Circuit in TianRui Group Co. et al. v. ITC et al., No. 2010-1395 (Fed. Cir. Oct. 11, 2011) (2-1 decision, Bryson, J., writing for the majority, joined by Schall, J.; Moore, J., dissenting) elicited an extensive dissenting opinion and has prompted broad commentary. All participants in the overseas manufacturing process – U.S. companies that arrange for manufacture of their goods abroad using trade secret processes or methods, their overseas partner manufacturers, and the overseas manufacturers that compete with them – need to understand the impact of this ruling on their business practices.