Sometimes, the misappropriation of trade secrets may occur outside of the United States (U.S.). This raises an important question: What should employers do if their trade secrets have been misappropriated outside of the U.S., where the DTSA (Defend Trade Secret Act) is not applicable? In such a case, employers are permitted to utilize the DTSA when addressing such misappropriation or theft under the terms of the Economic Espionage Act (EEA), which were modified by the DTSA. Pursuant to 18 U.S.C. § 1837, one of the EEA’s provisions indicates that the law applies to conduct taking place outside the borders of the U.S. if:
- An act in the offense’s furtherance was committed within the territory of the U.S.;
- The offender is a permanent resident or citizen of the U.S.; and/or-
- The offender is a corporation of the U.S.
The continued proliferation of overseas trade secret theft underscores the substantial significance of employers having the option of addressing conduct that takes place outside of the U.S. through the DTSA. Ideally, the lack of strong IP rights protection in many foreign countries is attributable to the growing threat of trade secret theft outside the territory of the U.S.
For example, China is well known to be a central hub of corporate and/or economic espionage. In fact, the Office of the National Counterintelligence Executive, Foreign Spies Stealing US Economic Secrets in Cyberspace, Oct. 2011 has branded Chinese actors as the most persistent and active economic espionage perpetrators globally. Employers would find the provisions of the EEA & the application of the DTSA extremely useful when addressing such conduct originating from China. Including a lack of judicial independence, unavailability and inaccessibility of local protectionism, insufficiency of resources for enforcement, and a lack of coordination among government agencies, the effective IPR (intellectual property rights) enforcement in China is being undermined by the significant institutional and structural impediments, which continuously compound this threat to the U.S.
In a nutshell, it is crucial to understand that whether the theft/misappropriation takes place in China or another territory without reliable and robust IP (intellectual property) protections, the DTSA provides employers, particularly those within the U.S., a valuable option when addressing the theft or misappropriation of trade secrets taking place overseas.
In Part VII of this series, we will move the discussion forward by providing you with an overview of “The International Trade Commission (ITC), Section 337, & the DTSA.”
As usual, while you should strive to be #UnusuallyMotivated, stay tuned for more education, training, and legal guidance. In the interim, reach out to us with questions and/or comments on our website at the Contact Us page!
Always rising above the bar,
Isaac T.,
Legal Writer, Author, & Publisher.
