U.S. Judge Rules Forum-Selection Clause Bars Zync from Pursuing ITC Trade Secret Case

A U.S. federal judge issued a temporary restraining order preventing automotive software company Zync from continuing a trade secret case against Finnegan client BMW at the U.S. International Trade Commission (ITC). The court found that agreements between the parties likely require the dispute to be resolved in Munich, Germany, rather than in the U.S.

Finnegan partner and BMW’s lead counsel Lionel Lavenue told MLex that the ruling strongly supports the carmaker’s position that the trade secret dispute belongs in Germany, not before the ITC.

"The judge rules in our favor on all the factors for the temporary restraining order, and the factors for the permanent restraining order are the same, so things look good. If the injunction becomes permanent, then Zync will have to dismiss or agree to stay the case in the ITC pending the outcome of the German proceeding."

The order will remain in effect for 14 days while the court considers whether to grant a preliminary injunction. A hearing on that request is scheduled for June 22.

Zync’s ITC complaint seeks to block imports of certain BMW vehicles, alleging BMW used confidential information related to in-car video-streaming technology that Zync shared during a prior business relationship.

The court’s ruling did not address the substance of those allegations and focused only on the appropriate forum for the dispute. The judge noted that a similar case filed by Zync in California state court had previously been dismissed based on the same contractual provision requiring litigation in Germany.

BMW disputes Zync’s claims and states that the technology was already known in the industry and developed independently.

The outcome of the upcoming injunction decision may determine whether the ITC case proceeds or is paused while the dispute is handled in Germany.

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