The U.S. International Trade Commission (ITC) has a strong jurisdiction that empowers it to block the importation of goods identified to have breached Intellectual Property (IP) rights or misappropriated trade secrets. The reach is so extensive that it can prohibit products developed through trade secret misappropriation, even in cases where the misappropriation was an extraterritorial act, or in simple terms, occurred entirely outside of the United States. This aspect is noteworthy for global corporations and legal practitioners, as it presents the ITC with a broad power which they should be aware of and take into consideration, for it can potentially affect their operations, lawsuits, and litigation strategies.
This authority is rooted in the Tariff Act of 1930, Section 337, which allows the ITC to ban importation of goods that are determined to have infringed on U.S patents, copyrights, and registered trademarks. However, it’s interesting to note that the ‘in rem jurisdiction’ also grants ITC the right to block products where the development involved misappropriation of trade secrets outside the United States.
This point was underscored in the case of TianRui v. ITC in 2011, where the U.S. Court of Appeals for the Federal Circuit (CAFC) supported the ITC’s decision of barring the importation of railway wheels consisting of trade secrets misappropriated in China. The CAFC posited that the ITC jurisdiction under Section 337 is ‘in rem’ (pertains to property) and not ‘in personam’ (pertains to a particular person), thus the above-stated nature of its authority.
With the increasing globalization and complexity of supply chains, it’s expected that the ITC’s robust, broad, and essentially extraterritorial jurisdiction in trade secret disputes will continue to play a significant role and should be a key matter for corporate counsel and law firm partners. Moreover, understanding this dynamic can essentially inform an effective legal strategy in disputes involving trade secrets where the development involved foreign activities.
Please refer to the full article at JD Supra by Axinn, Veltrop & Harkrider LLP for a deeper dive into this subject.