THE EXTRATERRITORIAL REACH OF THE DEFEND TRADE SECRETS ACT
In the US, trade secrets are protectable intellectual property. Trade secrets can be any form and type of financial, business, scientific, technical, economic or engineering information so long as the trade secret owner takes reasonable efforts to protect the information and the information derives independent economic value from not being generally known and not readily ascertainable through proper means. Trade secrets can be things like patterns, plans, compilations, programme devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programmes or codes.
For years, trade secret cases in the US were mostly litigated under state law. But in 2016, the Defend Trade Secrets Act (DTSA) was enacted and added to the Economic Espionage Act of 1996. The enactment of the DTSA gave trade secret owners a federal, standardised claim for trade secret misappropriation that may be brought in federal court.
The DTSA’s application to conduct outside the US
Until recently, it was an open question whether the DTSA applied to conduct occurring outside the US. In general, there is a presumption against US statutes applying outside the US, and the US Court of Appeals for the Seventh Circuit recently addressed whether that presumption applied to the DTSA in Motorola Solutions, Inc. v. Hytera Communications Corp. Ltd.
To answer the question, the Seventh Circuit followed well-established Supreme Court precedent that starts by looking at the language of the statute. And while neither the private right of action in the DTSA nor the definition of misappropriation includes an express reference to extraterritorial conduct, other parts of the chapter do.
Apr-Jun 2026 issue
Faegre Drinker Biddle & Reath LLP