Win for Extraterritorial Reach Under the DTSA

On May 2, 2019, the US District Court for the Northern District of California issued an opinion in Micron Technology, Inc. v. United Microelectronics Corp. and Fujian Jinhua Integrated Circuit Co., Ltd. (2019 WL 1959487).

According to the allegations, two Taiwanese companies conspired to recruit key personnel from Micron’s Taiwanese affiliate (MMT), inducing them to misappropriate electronic and paper files containing trade secrets prior to resigning from MMT. One such employee downloaded at least 174 files allegedly knowing “his misappropriation efforts directly targeted US servers.” UMC then “incorporated Micron’s trade secrets into technologies that it transferred and/or plans to transfer to Jinhua to enable Jinhua to mass produce advanced DRAM products.” In October 2016, the defendants participated in a job fair in Northern California, making presentations to vendors and soliciting “highly-skilled DRAM engineers” for Jinhua’s manufacturing plants. The defendants also included the misappropriated trade secrets in at least seven patents and four pending patent applications jointly filed with the USPTO, with each application identifying at least one former Micron or MMT employee as the inventor. Micron asserted claims under the DTSA, Civil RICO, and the California UTSA.

The Court held UMC’s actions in soliciting Micron employees and inducing them to steal trade secrets they knew were held solely on US servers were sufficient to find UMC “purposefully directed its activities at a resident of the United States” and additional misappropriation claims wherein trade secrets were acquired from other locations arose out of a common nucleus of operative facts. Likewise, the Court found the allegations concerning patent applications were “sufficient to support a finding that UMC [and Jinhua] purposefully directed its activities at a resident of the United States,” rendering both UMC and Jinhua subject to personal jurisdiction.

For the DTSA to apply to conduct occurring outside the US, an act in furtherance of the offense must have been committed inside the US. Micron argued the defendants’ presentations and solicitations in Northern California were conducted in furtherance of the misappropriation, specifically “the development and manufacture of products containing its trade secrets,” that occurred outside the US. The Court agreed, without further discussion as to what constitutes “an act in furtherance,” and it denied UMC’s motion to dismiss.