In January of this year, Chinese wind turbine manufacturer Sinovel Wind Group Co. Ltd. was convicted of stealing trade secrets from U.S. company AMSC Inc. The theft caused AMSC, more than $800 million in losses and forced the company to lay off more than half its global work force. Sinovel’s sentencing—which could include fines exceeding $1 billion and a multiyear probationary period—is scheduled for June 2018. READ MORE
As we previously reported, on August 14, 2017, President Trump signed an executive memo asking U.S. Trade Representative Robert Lighthizer to determine whether to launch an investigation into China’s alleged theft of intellectual property under Section 301 of the Trade Act of 1974. Later that week, after a review of Chinese laws, policies, and practices relating to IP, Lighthizer recommended and launched an investigation “to determine whether acts, policies, and practices of the Government of China related to technology transfer, intellectual property, and innovation are unreasonable or discriminatory and burden or restrict U.S. commerce.” READ MORE
Article 123 of the General Provisions of the Civil Law of the People’s Republic of China (effective Oct. 1, 2017) confirmed that trade secrets are intellectual property, signifying China’s recognition of the importance of trade secret protection. Nevertheless, trade secret misappropriation remains rampant in the country. READ MORE
For trade secret owners, international IP theft is of particular concern because of the difficulty in catching and enforcing remedies against the thieves. For many U.S. companies with a global reach, an overriding concern has been how to combat economic espionage from Chinese state-owned companies or individuals. During his campaign, President Trump certainly had China on his mind. READ MORE
Just as the U.S. Patent and Trademark Office has shown a keen interest in better understanding policy concerns and the needs of business stakeholders in the area of trade secrets (see our coverage of both USPTO symposia here and here) against the backdrop of a new federal law, the EU’s IP office is also stepping up its focus on trade secrets following the EU Trade Secrets Directive in 2016 (our coverage here). READ MORE
On Monday, January 9, the Supreme Court denied a petition for certiorari from Sino Legend Chemical Co., Ltd., concluding litigation that began with a Section 337 complaint filed more than four‑and‑a‑half years ago by SI Group, Inc. In January 2014, the International Trade Commission found that Sino Legend, a Chinese company, misappropriated SI Group’s rubber resin trade secrets and issued an exclusion order, barring the importation of Sino Legend products made using these trade secrets for 10 years.
The TSW has extensively covered this case with posts on the ITC Administrative Law Judge’s Initial Determination, the Commission’s decision, the Federal Circuit’s Rule 36 affirmance, and Sino Legend’s cert petition.
The case attracted the attention of the Chinese government, which filed an amicus brief in support of Sino Legend’s cert petition—the first amicus brief ever filed by the Chinese government in the U.S. Supreme Court, according to Sino Legend. The Chinese Trade Remedy and Investigation Bureau (“TRB”), a branch of the Ministry of Commerce, forcefully argued that the Supreme Court should grant Sino Legend’s petition and reverse the ITC’s decision:
The TRB is disappointed by recent actions of the ITC. In wrongly interpreting Section 337 of the Tariff Act to allow the ITC to bar imports into the United States based on alleged actions conducted, and adjudicated, wholly within the borders of China, the ITC has impugned the sovereignty of China and refused to accord the comity expected of a trade partner.
TRB Brief at 2.
The TRB criticized the ITC’s “expansion” of the Federal Circuit’s TianRui decision “to bar products from entering the United States for conduct that not only occurred completely within China’s borders by Chinese citizens working at Chinese companies, but also conduct that was adjudicated in China to have been lawful.” (Id. at 1.) Citing Judge Moore’s dissent, Sino Legend’s petition also criticized TianRui as incompatible with the presumption against extraterritorial application of federal statutes.
The Supreme Court’s denial of Sino Legend’s petition for certiorari is significant because it appears to cement the extraterritorial reach of Section 337 inasmuch as the offending conduct relates to products that are imported into the United States. Thus, the ITC remains a powerful forum for companies with significant operations in the United States to seek redress for misappropriation of trade secrets. Read more broadly, TianRui and its progeny may provide the ITC with the authority to investigate other types of “unfair acts” that occur outside the United States, provided—again—that those acts pertain to products that are imported into the United States.
The ITC Investigation was captioned Certain Rubber Resins and Processes for Manufacturing Same, Inv. No. 337-TA-849.
The Supreme Court docket was captioned Sino Legend (Zhangjiagang) Chem. Co. Ltd. et al. v. Int’l Trade Comm’n et al., No. 16-428.
To the surprise of many and the dismay of more than sixteen million United Kingdom voters, the previously unthinkable has occurred, the UK has voted to leave the European Union. In a tightly contested referendum, voters have chosen to end UK’s time as an EU member. Though the referendum is not technically legally binding, most expect the government to heed the voice of the people. READ MORE
How can trade secret misappropriation disputes be litigated in Chinese courts, despite the system’s lack of US-style discovery tools? Many companies, especially foreign companies, might be hesitant to even think about bringing trade secret misappropriation actions in China for many reasons, but perhaps most importantly, based on concerns over how to collect evidence. READ MORE
Germany is not only known as one of the best countries for enjoying beer and bratwurst, but it is also known as a country with some of the strictest data privacy laws on the planet. Within this environment, should companies doing business in Germany even consider using cloud services for trade secrets? They should! READ MORE
The Federal Circuit has once again affirmed the ITC’s broad jurisdiction to investigate and, if necessary, remedy extraterritorial misappropriation of trade secrets. Based on this and other recent decisions, it looks like the ITC will continue to be a significant forum for trade secret battles. READ MORE