For the first time, a United States federal court has held that a civil action for private damages under the Defend Trade Secrets Act (“DTSA”) can arise from acts of misappropriation that occur completely outside the United States – as long as they have a nexus with some activities within the U.S. In Motorola Sols., Inc. v. Hytera Commc’ns Corp., Ltd., No. 1:17-cv-1973 (N.D. Ill. Mar. 6, 2020) (an earlier decision in this case was previously discussed on this blog here), Motorola alleged that Hytera Communications, a Chinese company, hired away three engineers who then took with them Motorola trade secrets, including thousands of Motorola’s confidential technical documents containing millions of lines of source code and other highly confidential information.

In February, the jury deliberated for less than three hours before awarding Motorola more than $760 million in damages on its DTSA claim. The jury found that Hytera used the confidential documents to develop digital radios that are indistinguishable from radios produced by Motorola, and that it sold the radios worldwide – including in the US. This use of the trade secrets in the United States was, the Court ruled, an “act of furtherance” of trade secret misappropriation, thus allowing the DTSA to apply even though the misappropriation itself took place entirely in China.

This outcome is a critical development in efforts – by both government and private actors – to stop intellectual property theft by Chinese entities. Hytera continues to fight; a company statement promises an appeal, which it anticipates “may take multiple years.” At the same time, however, Hytera also acknowledged that it has “enhanced corporate governance” and “added new policies and procedures related to intellectual property” in the wake of the lawsuit. As that appeal winds its way through the courts, U.S. businesses may have an additional tool to use in trade secrets litigation affecting information, production, and sales around the globe.