# Trade Shows as a Toehold: Motorola v. Hytera and the DTSA's Reach Across Borders

> The Seventh Circuit upheld a $407 million DTSA award based on worldwide sales, holding the trade-secret statute reaches foreign misappropriation when an act in furtherance occurs in the United States.

Topic: Trade Secrets  |  Author: Lidiia Levitska  |  Source: Intellectual Property Law (outsideipcounsel.com)
Canonical: https://outsideipcounsel.com/blog/motorola-v-hytera-dtsa-extraterritorial-damages/


A jury in Chicago found that a Chinese radio maker had built its product line on trade secrets stolen by three engineers it poached from Motorola — and then awarded three-quarters of a billion dollars. The hard legal question on appeal was not whether Hytera stole anything, but whether a United States statute could reach misappropriation and sales that happened largely overseas. In *Motorola Solutions, Inc. v. Hytera Communications Corp.*, 108 F.4th 458 (7th Cir. 2024), the Seventh Circuit answered yes, holding that the Defend Trade Secrets Act (DTSA) applies extraterritorially when an "act in furtherance" of the misappropriation occurs on American soil. The toehold here was as ordinary as a trade-show booth.

## At a glance

- **Case:** *Motorola Solutions, Inc. v. Hytera Communications Corp.*, Nos. 22-2370 & 22-2413 (7th Cir. July 2, 2024), 108 F.4th 458.
- **Court:** U.S. Court of Appeals for the Seventh Circuit; opinion by Judge David F. Hamilton, joined by Judges Brennan and St. Eve. On appeal from the U.S. District Court for the Northern District of Illinois.
- **Posture:** Cross-appeals from a jury verdict finding violations of the DTSA and the Copyright Act and a multi-hundred-million-dollar damages award.
- **Holding:** The DTSA can apply to foreign misappropriation where a domestic act in furtherance of the offense occurs; the court affirmed roughly $407 million in DTSA damages based partly on worldwide sales, but reversed the copyright award and remanded for recalculation limited to domestic sales.
- **Significance:** A leading appellate decision on the DTSA's extraterritorial reach, holding that even limited U.S. conduct can support global trade-secret damages.

## The theft and the verdict

Hytera Communications, a Chinese competitor in the two-way radio market, recruited three engineers away from Motorola. Before leaving, the engineers downloaded thousands of documents and files containing Motorola's trade secrets and copyrighted source code. Using that material, Hytera launched a line of digital mobile radios that the evidence showed were functionally indistinguishable from Motorola's products. Motorola sued in the Northern District of Illinois, and a jury found that Hytera had violated both the DTSA and the Copyright Act, awarding compensatory damages under the Copyright Act and both compensatory and punitive damages under the DTSA — a total in the neighborhood of $765 million before post-trial adjustments.

The central appellate fight was reach. Much of the misappropriation and most of Hytera's sales occurred outside the United States. Hytera argued that the DTSA, like most federal statutes, is presumed not to apply extraterritorially and could not support damages measured by foreign sales. The court had to decide whether the statute overcame that presumption and, if so, how far.

## The two-step extraterritoriality analysis

Applying the familiar *RJR Nabisco* framework, the Seventh Circuit asked first whether Congress gave a clear, affirmative indication that the DTSA applies extraterritorially. It found one — not in the DTSA's own operative text alone, but in its statutory home. Congress enacted the DTSA as an amendment to the Economic Espionage Act, and the EEA contains an express extraterritoriality provision, 18 U.S.C. § 1837, reaching conduct outside the United States when "an act in furtherance of the offense was committed" in the United States. Because the DTSA was grafted onto that framework, the court reasoned, it carries the same extraterritorial authorization.

The second step asked whether this case fell within that authorization — whether a domestic act in furtherance had occurred. It had. Hytera advertised, marketed, and promoted the infringing radios to prospective customers at trade shows inside the United States. That domestic promotional activity, the court held, was an "act in furtherance" of the misappropriation sufficient to bring Hytera's foreign conduct, and the worldwide sales that flowed from it, within the statute's reach. The striking feature of the holding is how little domestic activity it required: not the theft, not the manufacture, not even most of the sales, but the marketing of the stolen-technology products at U.S. trade shows.

## Damages, punitive multiples, and the copyright remand

Having upheld extraterritorial application, the court affirmed the DTSA award of roughly $407 million — about $135.8 million in compensatory damages and $271.6 million in punitive damages — calculated in part on Hytera's worldwide profits. It rejected Hytera's challenges to the punitive component, which approached the statutory ceiling of twice the compensatory award under 18 U.S.C. § 1836(b)(3)(C), given the jury's findings of willful and malicious misappropriation.

The copyright claim fared differently, and the contrast is instructive. The Copyright Act, the court held, contains no comparable extraterritorial authorization, and Motorola had not established a qualifying domestic act of infringement to anchor a worldwide award. The court therefore reversed the roughly $136 million copyright award and remanded with instructions to limit any copyright recovery to Hytera's domestic sales of infringing products. The juxtaposition makes the point: two intellectual-property regimes, litigated on the same facts, produced opposite extraterritorial results because only one was tied to a statute authorizing foreign reach. Hytera petitioned the Supreme Court for certiorari to challenge the DTSA ruling.

## Open questions

- **How thin can the domestic act be?** Trade-show marketing sufficed here; future cases will test whether still slighter U.S. contacts can anchor worldwide damages.
- **Will other circuits agree?** The decision deepens uncertainty about the DTSA's reach, and a circuit split — or Supreme Court review — could reshape the analysis.
- **How are worldwide damages apportioned?** The opinion approves global sales as a damages base but leaves room to argue about causation and the share of foreign profits fairly attributable to the misappropriation.

## Implications

- **Limited U.S. conduct, global exposure.** A foreign defendant that markets stolen-technology products at U.S. trade shows may face DTSA damages measured by worldwide sales.
- **The EEA link is the key.** The DTSA's extraterritorial reach derives from the Economic Espionage Act's act-in-furtherance provision, not from the DTSA's stand-alone text.
- **Copyright is not coextensive.** The same facts yielded a domestic-only copyright recovery, underscoring that extraterritorial reach is statute-specific.
- **Punitive exposure is real.** Willful and malicious misappropriation can support punitive damages up to twice the compensatory award.
- **Plan cross-border defense early.** Foreign companies competing in the U.S. should assume that any domestic marketing footprint can become the hook for sweeping trade-secret liability.

## Frequently asked questions

**Does the Defend Trade Secrets Act apply to misappropriation that happens overseas?**
Yes, within limits. The Seventh Circuit held the DTSA can reach foreign misappropriation when an act in furtherance of the offense occurs in the United States, drawing on the Economic Espionage Act provision the DTSA amended. Advertising stolen-technology products at U.S. trade shows qualified.

**How large was the award and what happened to it on appeal?**
The court affirmed roughly $407 million under the DTSA, comprising about $135.8 million in compensatory damages and $271.6 million in punitive damages, based partly on Hytera's worldwide sales. It separately reversed the copyright award and remanded for recalculation limited to domestic sales.

**What is the practical takeaway for foreign companies?**
Even limited U.S. activity, such as marketing or attending trade shows with products built on stolen secrets, can trigger DTSA liability measured by global sales. Foreign firms cannot assume that keeping the actual theft abroad shields them from U.S. trade-secret damages.

## Authorities and sources

- Opinion (Justia), *Motorola Solutions, Inc. v. Hytera Communications Corp.*, No. 22-2413: https://law.justia.com/cases/federal/appellate-courts/ca7/22-2413/22-2413-2024-07-02.html
- Slip opinion (GovInfo PDF): https://www.govinfo.gov/content/pkg/USCOURTS-ca7-22-02413/pdf/USCOURTS-ca7-22-02413-0.pdf
- Opinion (FindLaw): https://caselaw.findlaw.com/court/us-7th-circuit/116339567.html
- Defend Trade Secrets Act remedies, 18 U.S.C. § 1836 (Cornell LII): https://www.law.cornell.edu/uscode/text/18/1836
- Economic Espionage Act extraterritoriality, 18 U.S.C. § 1837 (Cornell LII): https://www.law.cornell.edu/uscode/text/18/1837