Courts Expand the DTSA’s Reach to Foreign Trade Secret Misappropriation Following Motorola v. Hytera

Congress enacted the Defend Trade Secrets Act (DTSA) in 2016 to provide a federal civil cause of action for trade secret misappropriation. One of the biggest related developments since then came through the Seventh Circuit’s 2024 decision in Motorola Solutions, Inc. v. Hytera Communications Corp. Ltd.¹ Deciding the issue as a question of first impression for any circuit, the Court held that the DTSA reaches certain conduct outside the United States and permits recovery of damages based on worldwide sales. 

The Seventh Circuit’s Ruling in Motorola v. Hytera

Motorola and Hytera are global competitors in the two-way-radio market. Hytera, a Chinese company, hired away several Motorola engineers, based in Malaysia, who downloaded thousands of Motorola technical documents and source code before leaving the company. Hytera used that information to develop competing radios and sold them worldwide, including in the US. A jury found Hytera liable under the DTSA and the Copyright Act. The district court ultimately awarded Motorola $543.7 million, with much of the award attributable to Hytera’s foreign sales.

On appeal, Hytera challenged whether the DTSA permits recovery for conduct and sales outside the US. The Seventh Circuit held that it does.

• The DTSA applies to conduct outside the US. The DTSA was added in 2016 to the broader Economic Espionage Act of 1996 (EEA). Originally, the EEA criminalized trade secret theft but did not provide a general private civil remedy. The Seventh Circuit held that the EEA’s extraterritoriality provision, 18 U.S.C. § 1837, applies to civil claims under the DTSA. Because Section 1837 expressly reaches certain “conduct occurring outside the United States,” the Court concluded that the DTSA overcomes the presumption that federal statutes apply only domestically.
• The DTSA applies to foreign conduct as long as it has a sufficient US connection. Section 1837 requires, in relevant circumstances, that “an act in furtherance of the offense” be committed in the US. The Seventh Circuit interpreted that requirement broadly. The domestic act need not itself constitute misappropriation; it need only show that the scheme “is at work” in the US, rather than merely contemplated or already complete. The Court found that Hytera’s advertising, promotion, and sale of products incorporating Motorola’s trade secrets at US trade shows was sufficient to satisfy that requirement.

Having concluded that the DTSA reached Hytera’s foreign conduct, the Court further held that Motorola’s recovery could extend beyond Hytera’s US sales. Motorola could recover Hytera’s profits from worldwide sales resulting from the misappropriation. Hytera petitioned the Supreme Court for review, but the Court denied certiorari. 

Lower Courts Are Following Motorola

District courts have since begun applying Motorola and its interpretation of Section 1837’s “act in furtherance” requirement. For example:

• GTY Technology Holdings Inc. v. Wonderware, Inc. (N.D. Ill.):² A former employee based in Canada argued that the DTSA did not apply, because he was in Canada when he allegedly downloaded trade secret information. The court rejected that argument. It held that the employee’s visit to Chicago and discussions there with a codefendant concerning confidential business information constituted acts in furtherance of the alleged misappropriation, even though the alleged downloading occurred abroad.
• Beijing Meishe Network Technology Co., Ltd. v. TikTok Inc. (N.D. Cal.):³ A Chinese software company alleged that its source code was misappropriated in China and then incorporated into TikTok’s video editing functionality by TikTok’s own US-based employees and distributed to US users. Relying on Motorola, the court held that Section 1837 does not require the domestic act itself to constitute misappropriation or directly cause the foreign harm. 

No other federal court of appeals has yet addressed the recoverability of extraterritorial damages under the DTSA. Motorola therefore remains the only appellate authority on that question, and district courts outside the Seventh Circuit, as above, have begun looking to its reasoning.

Takeaways

Motorola has significant implications for cross-border trade secret disputes.

• Foreign conduct can result in worldwide DTSA damages. Misappropriation need not occur in the US. Where Section 1837 is satisfied, a plaintiff may seek damages based on foreign sales resulting from the misappropriation.
• Potentially minimal connection to the US is required, though courts have not tested how far that reaches. Under Motorola, the domestic act need not itself constitute trade secret misappropriation. US marketing, sales, meetings, or other conduct advancing the alleged scheme may be sufficient. Motorola and subsequent district court decisions favor a broad reading of this “act in furtherance” requirement, but none has defined how attenuated a US connection may be before Section 1837 is no longer satisfied.
• The appellate landscape remains open. No other circuit has adopted or rejected Motorola’s holding that extraterritorial DTSA damages are recoverable. Until another court of appeals addresses the issue, Motorola will remain a key persuasive authority in cross-border DTSA cases outside the Seventh Circuit.