New Decision on Asserting the Defend Trade Secrets Act Against Foreign Entities

A recent federal court decision concluding that a Defend Trade Secrets Act (“DTSA”) claim could go forward against a UK-based defendant should be read both by foreign entities doing business in the United States and by U.S.-based entities that work with foreign affiliates. The case highlights the DTSA’s strong reach over both activity and actors residing outside the United States. In vPersonalize Inc. v. Magnetize Consultants Ltd., Civ. No. 18-CV-01836-BJR, 2020 U.S. Dist. LEXIS 18491 (W.D. Wash. Feb. 3, 2020), a UK-based defendant moved to dismiss a DTSA claim arguing that the Economic Espionage Act’s extraterritorial provision should not apply to private civil actions under the DTSA, should not apply to a foreign entity, and should not apply unless a foreign defendant is alleged to have committed “an act in furtherance” of the violation. The court rejected these arguments and declined to dismiss the DTSA claim. The dispute centers on the relationship between 18 U.S.C. § 1837 entitled, “Applicability to conduct outside the United States” and 18 U.S.C. § 1836, which provides a private right of action under the DTSA. Section 1837 states that “this chapter” (which includes sections 1831-1839 of Title 18) applies to conduct outside the U.S. if...