The Federal Circuit Has Affirmed The ITC's Ability To Address International Trade Secret Theft

A company encountering a theft of its trade secrets by a foreign competitor importing goods into the United States may have enhanced recourse at the US International Trade Commission ("ITC"). Under Section 337 of the Tariff Act, 19 U.S.C. § 1337 ("Section 337"), the ITC is authorized to order a stop to the importation of goods into the United States if it determines that their production is the result of unfair trade practices and the importation substantially injures a domestic industry. In the past, trade secret investigations have not constituted a substantial portion of the ITC's docket, but that may change as a result of a recent Federal Circuit decision. In TianRui Group Co. v. International Trade Commission, the Federal Circuit affirmed the ITC's determination exercising jurisdiction over trade secret misappropriation, even in situations where the misappropriation occurs exclusively outside of the United States. 661 F.3d 1322 (Fed. Cir. 2011) (rehearing/rehearing en banc denied, Feb. 1, 2012). The Federal Circuit opinion suggests that the ITC may provide a valuable venue as an alternative to the traditional law suit for companies to address increasing international trade secret theft.

In Certain Cast Steel Railway Wheels, Processes for Manufacturing or Relating to Same and Certain Products Containing Same, Inv. No. 337-TA-655, Complainant Amsted Industries Inc., a domestic corporation, developed and retained a trade secret called the "ABC Process," which was a method of manufacturing steel railway wheels. Amsted had exploited the ABC Process, but then decided to cease using it, and licensed the process to several companies in China. Respondent TianRui, a Chinese competitor, attempted to license the ABC Process but was ultimately unsuccessful. Instead, TianRui hired nine employees from one of Amstead's licensees in China. Despite having been advised of a duty not to disclose and having signed confidentiality agreements, the employees disclosed the ABC Process to TianRui. TianRui then began to manufacture and import steel railway wheels manufactured according to the ABC Process, into the United States. Consequently, Amsted filed a complaint with the ITC against TianRui, alleging a violation of Section 337 based on TianRui's trade secret misappropriation.

The ITC determined that TianRui had misappropriated the trade secret-protected ABC Process from Amsted and blocked importation of the resulting products into the United States...