Yesterday, the Supreme Court denied Sino Legend’s petition for certiorari of the Federal Circuit’s summary affirmance of the Commission’s decision in Certain Rubber Resins & Processes for Mfg. Same, ITC Inv. No. 337-TA-849 (Feb. 26, 2014).  See Sino Legend (Zhangjiagang) Chem. Co., v. ITC, No. 16-428, 2017 WL 69209 (U.S. Jan. 9, 2017) (denying certiorari); Sino Legend (Zhangjiagang) Chem. Co. v. ITC, 623 F. App’x 1016 (Fed. Cir. 2015) (affirming without opinion).  Thus, after almost three years of appeals, and without any substantive analysis by either the Federal Circuit or the Supreme Court, the Commission Opinion has been upheld.

In the underlying investigation, the Commission held that Sino Legend violated Section 337 by importing goods that were manufactured in China using misappropriated trade secrets—even though a Chinese court had earlier found that Sino Legend had not violated Chinese trade secret law.  Sino Legend argued that 19 U.S.C. § 1337(a)(1)(A) should not be applied to extraterritorial acts as it would allow the ITC to police misappropriation of trade secrets worldwide, even when the acts are legal in the country where they occurred.  Sino Legend further argued that the doctrine of comity dictated that the ITC accept China’s previous ruling that there was no misappropriation of trade secrets.

The ITC rejected Sino Legends arguments as contradicting precedent established by the Federal Circuit’s 2-1 TianRui[1] decision that a violation of Section 337 can be based on extraterritorial misappropriation of trade secrets.  Sino Legend’s unsuccessful petition for certiorari to the Supreme Court sought reversal of the TianRui line of cases.  See Petition for Certiorari, Sino Legend, No. 16-428 (U.S. Sept. 30, 2016) (relying heavily on Judge Moore’s dissent in TianRui).

Takeaway

Over the past ten years, Section 337 investigations based on allegations of trade secret misappropriation have, with few exceptions, resulted in the Commission issuing remedial orders. With the Supreme Court’s denial of Sino Legend’s petition for certiorari, the ITC remains a powerful weapon for companies with a U.S. domestic industry to combat foreign trade secret misappropriation for goods imported into the U.S.

[1] TianRui Group Co. Ltd. v. ITC, 661 F.3d 1322 (Fed. Cir. 2011).

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