In Certain Electric Fireplaces, Inv. Nos. 337-TA-791/826, the Commission reviewed the question of whether breach of contract constitutes a violation of Section 337 and issued another exclusion order for trade secret misappropriation that occurred entirely overseas. Complainants, Twin-Star International and TS Investment Holding Corp. (“Twin-Star”), alleged that the Respondents, purported Twin-Star investors, breached Twin-Star’s Subscription and Stockholders Agreement (“SSA”), misappropriated Twin-Star’s trade secrets, and infringed a Twin-Star copyright. Respondents moved for summary determination on whether breach of contract could constitute an unfair act under Section 337, but later defaulted in the investigation. The ALJ denied Respondents’ summary determination motion and found a violation of Section 337 based on Respondents’ default. The Commission avoided making any categorical decisions on the question of whether breach of contract could constitute an unfair act under Section 337 because the alleged breach of contract claims either could not be remedied by a prospective exclusion order or were unproven. The Commission also affirmed the ALJ’s finding of a violation of Section 337 based on trade secret misappropriation that occurred entirely overseas, as well as copyright infringement. The Commission’s decision on trade secret misappropriation follows the Federal Circuit’s decision in TianRui v. United States Int’l Trade Comm’n, which authorized the use of Section 337 to exclude articles made with stolen trade secrets even when such theft occurred entirely overseas.
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Commission avoids deciding whether breach of contract is an unfair act under Section 337; issues another exclusion order for overseas trade secret misappropriation
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