BMW Uses Forum-Selection Clause to Shut Down ITC Trade Secret Investigation

An administrative law judge at the U.S. International Trade Commission (ITC) terminated a trade secret investigation brought by Zync against Finnegan client BMW after determining that the parties’ 2021 confidentiality agreement required disputes arising from their collaboration to be litigated in Munich, Germany. The decision rejected Zync’s argument that Section 337 of the Tariff Act constituted a mandatory legal regime that would override the forum-selection clause and cited the ITC’s interest in resolving investigations without lengthy delays. The ruling follows prior decisions by California courts enforcing the same contractual provision and leaves ongoing proceedings in the Ninth Circuit and Munich related to the underlying trade secret and confidentiality claims.

Finnegan partner and lead BMW counsel Lionel Lavenue told IAM that the ruling is important because of its treatment of both the mandatory-law and public-policy arguments advanced by Zync.

“To our knowledge, this is the first instance in which an ITC administrative law judge has terminated a contested Section 337 investigation—trade-secret or otherwise—based on a forum-selection clause,” said Lionel. "The significance lies in the clear reaffirmation that sophisticated parties cannot avoid the forum-selection agreements they freely negotiate simply because they later prefer a different venue.”

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