Trade Secrets & Employee Mobility

Last summer, in a case of first impression, the U.S. Court of Appeals for the Seventh Circuit in Motorola Solutions, Inc. v. Hytera Communications Corporation Ltd held that the Defend Trade Secrets Act (the “DTSA”) rebuts the presumption against extraterritoriality—i.e., the principle that federal statutes should not be applied to conduct occurring outside of the United States, unless Congress explicitly states otherwise. 108 F.4th 458, 483 (7th Cir. 2024).

The Motorola court held that the DTSA applies to individuals and entities who are not located in the United States insofar as an “act in furtherance” of the misappropriation “was committed in the United States.” 18 U.S.C. § 1837(2). In construing what constitutes an “act in furtherance” of misappropriation, the Motorola court determined that the defendant, a Chinese company, had committed an “act in furtherance” of the misappropriation by marketing products embodying defendant’s stolen trade secrets via road shows and advertising activities it conducted in the United States. Id. 480-88.

A recent decision from the Northern District of Illinois continues to develop the DTSA’s “act in furtherance” element. In GTY Technology Holdings Inc. v. Euna Solutions, the court considered whether the DTSA applied to a Canadian citizen defendant, who had worked remotely for a Chicago-based company before he and his codefendant allegedly misappropriated plaintiffs’ trade secret information. No. 24-CV-9069, *8 (N.D. Ill. May 21, 2025). Plaintiffs alleged that defendant had engaged in conduct in the United States when, prior to his downloading the documents, he visited Chicago and discussed the documents with his codefendant. Id. Defendant moved to dismiss the DTSA claims, arguing that the statute did not apply to him because he was in Canada when he allegedly downloaded the plaintiffs’ documents, thereby allegedly committing the act of misappropriation outside of the U.S. Id.

Prema Engineering S.r.l. (“Prema Engineering”) has accused automaker Automobili Lamborghini S.p.A. and Automobili Lamborghini America, LLC (collectively, “Lamborghini”) of stealing Prema Engineering’s intellectual property and trade secrets it supplies to Hypercars used in endurance racing. In Prema Engineering S.r.l. v. Automobili Lamborghini S.p.A., filed in the United States District Court for the Western District of Texas, Austin Division, Prema Engineering alleges that in 2024,  Lamborghini, while in a racing partnership with Prema Engineering and Iron Lynx racing team, stole Prema Engineering’s high-tech trade secret-protected steering wheel software in order to use it in Lamborghini’s new racing partnership with Riley Motorsports, a competitor of Prema Engineering and Iron Lynx.

Prema Engineering alleges that Lamborghini entered into a partnership with the Iron Lynx racing team, pursuant to which Lamborghini sold two Lamborghini-manufactured Hypercars to the Iron Lynx team and agreed to provide spare parts and other supply-related assistance for the Hypercars. Under the partnership, Prema Engineering was the exclusive provider of all servicing, maintenance, engineering and technical support to the Iron Lynx racing team.

As we all await rulings on the lawsuits challenging the FTC’s Noncompete Rule (one of which may be decided later today), we provide an update on the Knicks/Raptors trade secret case that we previously discussed on EBG’s Spilling Secrets Podcast Series and blogged about here.  Although the Knicks had a successful year on the court, they suffered an in court loss last week to the Toronto Raptors.    

In the March 2024 edition, Bracket-Busting Trade Secret and Non-Compete Disputes in Sports, we discussed the Knicks’ federal court action against the Toronto Raptors for theft of trade secrets.  We noted that the Knicks sought neither a Temporary Restraining Order nor a Preliminary Injunction and that the defendants filed a motion to dismiss or, alternatively, to stay the case pending arbitration before the Commissioner of the NBA.      

In a lawsuit filed in the United States District Court for the Southern District of New York, the Knicks alleged that their former employee and now current Raptors employee, Ikechukwu Azotam, misappropriated the Knicks’ confidential and proprietary information at the behest of the Raptors, in violation of the Defend Trade Secrets Act (“DTSA”), Computer Fraud and Abuse Act (the “CFAA”), as well as various common law claims.  The defendants moved to dismiss or, alternatively, to compel arbitration pursuant to the NBA’s Constitution and By-Laws, which provide that the NBA Commissioner shall have complete and final jurisdiction over any dispute involving two or more members of the NBA. 

Effective as of October 1, 2018, Massachusetts will become the 49^th state to adopt a version of the Uniform Trade Secrets Act (leaving New York as the only holdout). Massachusetts did so as part of a large budget bill recently signed into law, which also resulted in the adoption of the Massachusetts Noncompetition Agreement Act. (The text of the Massachusetts version of the Uniform Trade Secrets Act is set out on pages 47-52 of the bill, H. 4868, while the effective date is set out on page 117. Here is a link to the entire budget bill.)

While there are differences from existing Massachusetts ...

As the law’s first anniversary approaches, federal courts continue to adjudicate claims arising under the Defend Trade Secrets Act (“DTSA”).  Enacted on May 11, 2016, DTSA provides the first private federal cause of action for trade secret misappropriation, allowing parties to sue in federal court for trade secret misappropriation.  Although the law is in its infancy, employers and legal practitioners filing complaints that assert DTSA claims must nevertheless adhere to longstanding rules of pleading set forth by the Supreme Court and the Federal Rules of Civil Procedure ...

David Clark, contributor to this blog and Senior Counsel at Epstein Becker Green, is featured on Employment Law This Week, discussing the Defend Trade Secrets Act of 2016 (DTSA).

Under the DTSA, employers can now sue in federal court for trade secret misappropriation. Though there is some overlap with the Uniform Trade Secrets Act—adopted in some version by 48 states—the DTSA marks a notable change in how these cases are litigated, creating a federal civil cause of action. The new law contains broad whistleblower protections and new requirements for employers to give notice ...

On May 11, 2016, President Obama signed into law the Defend Trade Secrets Act (“DTSA”), which became effective immediately. The DTSA provides the first private federal cause of action for trade secret misappropriation, and it allows parties to sue in federal court for trade secret misappropriation—regardless of the dollar value of the trade secrets at issue.

Although the DTSA’s remedies largely overlap with those in the 48 states that have adopted some version of the Uniform Trade Secrets Act, the DTSA will nevertheless significantly alter how trade secret ...

After years of stops and starts in Congressional efforts to pass a law creating a federal claim for misappropriation of trade secrets that can be pursued by private citizens and companies (as opposed to federal prosecutors), the last few weeks have produced an astonishing acceleration of those efforts.  This month, the Defend Trade Secrets Act has been approved by both houses of Congress in resounding fashion.  It is on the brink of being enacted into law.

On April 27, 2016, the House of Representatives voted 410-2 to pass the Defend Trade Secrets Act.  That vote came quickly on the heels of ...