The Commission on the Theft of American Intellectual Property issued a report earlier this year that detailed the massive scope and cost of IP theft to U.S. companies, including that relating to misappropriation of U.S. trade secrets by foreign entities (the “IP Commission Report”). See http://ipcommission.org/report/IP_Commission_Report_Update_2017.pdf. This article discusses ways in which such trade secret misappropriation can be addressed. 

Following the issuance of the IP Commission Report, in August 2017, the Office of the U.S. Trade Representative (“USTR”) initiated a Section 301 investigation concerning China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation (the “Section 301 Investigation”). In response to the notice of initiation relating to the Section 301 investigation, a number of entities submitted comments to the USTR, including the American Bar Association’s Section of Intellectual Property Law (“ABA-IPL”). In its comments, which were prepared by a Task Force led by Geoffrey Goodale (a Partner at FisherBroyles and Vice-Chair of the ABA-IPL’s IP Practices Division), the ABA-IPL expressed deep concerns regarding ways in which U.S. companies have been forced to transfer technology and/or had their trade secrets misappropriated by Chinese entities with little recourse available to them in China. The ABA-IPL’s comments can be accessed at https://www.regulations.gov/document?D=USTR-2017-0016-0012.

It likely will take several months before the USTR announces what actions, if any, the U.S. Government may take to address the deficiencies that exist with respect to Chinese enforcement of IP rights. Fortunately, though, there are actions that U.S. companies can take on their own if their trade secrets are being misappropriated by Chinese or other foreign entities.

For example, in instances where products are being sold or offered for sale in the U.S. that are manufactured abroad utilizing trade secrets that have been misappropriated from a U.S. company, that company could bring a Section 337 action before the U.S. International Trade Commission (“ITC”). Key aspects of Section 337 actions, including potential remedies and required elements that must be satisfied, are discussed in a separate article in this newsletter. Significantly, the ITC has ruled in favor of complainants in the vast majority of trade secret-related cases, and U.S. courts have routinely affirmed such ITC decisions.

Companies also can bring actions relating to trade secret misappropriation taking place outside of the U.S. in federal court under the Defend Trade Secrets Act (DTSA). The ways in which companies can do so under the DTSA are discussed in detail in an article written by a Partner at this Firm, that appeared in a recent issue of the ABA Section of Antitrust Law’s Competition Torts News that can be accessed at https://www.fisherbroyles.com/wp-content/uploads/2017/09/Halligan-CompetitionTorts-News.pdf

Many of our IP partners have considerable experience in cases before the ITC and before federal and state courts and are always happy to assist clients on trade secret and other IP matters.