Protecting Trade Secrets at the ITC

The first article of this series examined how the federal district courts have recently enhanced the relief afforded U.S. trade secret holders under the Defend Trade Secrets Act (DTSA) for the overseas misappropriation of trade secrets. This article explains how the U.S. International Trade Commission has allowed IP rights holders to address unfair methods of competition caused by the overseas misappropriation of trade secrets. It also includes practice tips for pursuing a claim at the International Trade Commission.

Trade Secret Law at the ITC

The Commission investigates unfair trade practices under section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1337. It has the authority “to provide an adequate remedy for domestic industries against unfair methods of competition and unfair acts instigated by foreign concerns operating beyond the in personam jurisdiction of domestic courts.” Sealed Air Corp. v. Int'l Trade Comm'n, 645 F.2d 976, 985-86 (C.C.P.A. 1981). The Commission has nationwide, in rem jurisdiction over imported goods. Section 337 investigations are fast-paced and frequently involve foreign discovery.

Section 337 reflects the Congressional intent to allow wide discretion in defining unfair trade practices. Indeed, when section 316, the predecessor of section 337, was added to the Tariff Act, the Senate Finance Committee reported that “[t]he provision relating to unfair methods of competition in the importation of goods is broad enough to prevent every type and form of unfair practice.” In re Orion, 71 F.2d 458, 467 (C.C.P.A. 1934). The Commission has long found the misappropriation of trade secrets to fall within the scope of section 337. See, e.g., Certain Processes for the Manufacture of Skinless Sausage Casings & Resulting Product, Inv. No. 337-TA-148/169, USITC Pub. 1624 (Dec. 1984); Certain Apparatus for the Continuous Production of Copper Rod, Inv. No. 337-TA-52, USITC Pub. 1017 (Nov. 1979).

To find a violation of section 337 in connection with trade secret misappropriation, the Commission must find, among other things, an unfair act or unfair method of competition in the importation, sale for importation, or sale after importation of an article embodying or reflecting the trade secret. 19 U.S.C. § 1337(a)(1)(A). For substantive trade secret law, the ITC looks to federal common law. TianRui Grp. Co. Ltd. v. Int'l Trade Comm'n, 661 F.3d 1322, 1327 (Fed. Cir. 2011). Thus, the ITC will apply state trade secret law, such as codifications of the Uniform Trade Secrets Act, for federal cases sitting in diversity or otherwise taking place in the federal courts, as well as, more recently, decisions from DTSA matters.

Read the full article here.