Tianrui Group Company Ltd. v. ITC

Under the Tariff Act, when the divulgement of a trade secret occurs extraterritorially U.S. Trade Secret law can still be applied.

Tianrui Group Company Ltd. (“Tianrui”), a Chinese manufacturer of case steel railway wheels for later import to some markets in America, sought to license a secret process, called the “ABC process,” from Amsted Industries Inc. (“Amsted”), an American corporation and owner of the “ABC process.” After failed negotiations, Tianrui hired nine employees from one of Amsted’s Chinese licensees, Datong ABC Casting Company Ltd. Some of those employees had been trained in the “ABC process” at Amsted’s Alabama plant, and others had received training in that process in China. Amsted alleged that the former Datong employees disclosed their trade secrets to Tianrui, and filed a complaint with the International Trade Commission (“ITC”) under the Tariff Act of 1930, 19 U.S.C. § 1337 (“§ 337”). The ITC found for Amsted. Tianrui appealed, arguing that § 337 does not apply to trade secrets divulged outside of the United States. The Federal Court found that the Commission could consider extraterritorial activity in regards to § 337, because Congress intended the act to deter “unfair acts in the importation of articles into the United States.” Since divulging trade secrets is one such unfair activity, and Tianrui imported those wheels into the United States, the Federal Court AFFIRMED the ITC’s decision to apply American trade secret law to actions occurring outside the United States.