U.S. law has long centered its authority on the idea that its reach is not boundless.¹

This idea is known as the presumption against extraterritoriality, and it reconciles the U.S.' right to have sovereignty over its lands while allowing the same for other countries, thus permitting harmonious discord.²

Intellectual property law is not exempt from this presumption.³ However, a July decision from the U.S. Court of Appeals for the Seventh Circuit in Motorola Solutions Inc. v. Hytera Communications Corp., involving the Defend Trade Secrets Act, has allowed for broader international application of trade secret law.⁴

Though this is counter to what has been seen in other areas of IP law, including copyright, trademark and patent law, it does not mean that there can never be extraterritorial application of such laws. This article will present an overview of extraterritoriality in each area of IP.

The Seventh Circuit's decision involving the DTSA presented an issue of first impression.⁵ As is true for other areas of law, even beyond IP, there is a presumption against applying the DTSA extraterritorially.⁶

To rebut this presumption, the court applied a two-step framework that asks two questions: (1) "whether the presumption against extraterritoriality has been rebutted—that is, whether the statute gives a clear, affirmative indication that it applies extraterritorially,"⁷ and (2) "whether 'the conduct relevant to the statute's focus occurred in the United States' or 'in a foreign country.'"⁸

The first step asks the courts to consider the plain language of the statute and Congress' specific intent regarding its extraterritorial application.⁹

The court in Motorola found that the DTSA's plain language expressly rebuts the presumption against extraterritoriality and meets the threshold question of the two-step framework.¹⁰

This means the DTSA may apply extraterritorially and does not need to be further analyzed under the second step of the framework. The Seventh Circuit's conclusion is unprecedented and counter to what has been seen in other areas of IP law.

The Motorola court found that extraterritoriality does not usually apply to copyright law. Specifically, the Copyright Act does not meet the threshold question of explicitly rebutting the presumption against extraterritoriality.¹¹

Subsequently, the court looked to the second step of the framework to determine the extraterritorial application of the Copyright Act.¹²

To analyze the second step as it pertains to the Copyright Act, courts have developed a doctrine known as the predicate act doctrine,¹³ which holds that a copyright owner may recover damages for foreign infringement if "(1) an initial act of copyright infringement occurred in the United States, and (2) the domestic infringement enabled or was otherwise 'directly linked to' the foreign infringement for which recovery is sought."¹⁴

Fundamentally, it is much harder to apply the Copyright Act extraterritorially, and a domestic infringement connected to an international action is vital for such application. This narrow focus differs from the broad application seen with the DTSA.

Courts have also discussed the extraterritoriality of trademark law. Specifically, in Abitron Austria GmbH v. Hetronic International Inc. in 2023, the U.S. Supreme Court expressed that the Lanham Act does not meet the threshold question to allow for extraterritorial application.¹⁵

Consequently, the court considered the infringement alleged under the second step of the framework to establish if it could apply the Lanham Act extraterritorially.¹⁶

Similar to the analyses applied in copyright law, the court sought to establish if the kind of conduct involved in the alleged infringement was relevant to the focus of the Lanham Act, whether such conduct occurred domestically and whether the domestic conduct aided the international conduct.¹⁷

There, the court found that the conduct relevant to the focus of the Lanham Act were of actions where there was "unauthorize[d] 'use' in commerce."¹⁸ As such, the Supreme Court would apply the Lanham Act to international infringement if there was a domestic "unauthorize[d] 'use' in commerce" attached to it.

This is a much narrower application of the Lanham Act than that seen in the DTSA, and it mirrors the analysis the court considered with the Copyright Act.

Patent law is arguably the most narrowly applied IP law as it pertains to extraterritoriality. That is because the plain language of the Patent Act states that "whoever without authority makes, uses, offers to sell or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent."¹⁹

As such, "[i]t is the general rule under United States patent law that no infringement occurs when a patented product is made and sold in another country," according to the Supreme Court in Microsoft Corp. v. AT&T Corp. in 2007.²⁰

An exception to this rule is seen in Section 271(f) of the Patent Act, which states that infringement occurs "when one 'supplies ... from the United States,' for 'combination' abroad, a patented invention's 'components.'"²¹

In Microsoft, the Supreme Court explained that for patent law to apply extraterritorially, there must be some component of the patent made in the U.S. and combined abroad.²²

Specifically, the plaintiff in Microsoft developed a computer software and patented it.²³ The defendant developed the same patented software, placed it on a master disk and supplied it to computer manufacturers abroad.²⁴ The manufacturers abroad copied the components of the master disk onto other disks and installed the copied software in those other disks onto computers abroad.²⁵

The Supreme Court found those actions did not meet the requirements implemented by Section 271(f) because the component supplied from the U.S. was not combined with items abroad.²⁶

Rather, since they were originally from a master disk and then copied onto other disks and those other disks were installed onto the computers, the link to a U.S. component was broken.²⁷

This is a very narrow extraterritorial application of the Patent Act that requires specific action and thus leaves patent holders in the U.S. vulnerable to extraterritorial infringement.

The presumption against extraterritoriality is an important component, and at times a barrier, in IP law.

The overarching commonalities in all areas of IP law discussed are that first, specific congressional intent is a threshold question of extraterritorial application of such law.

Second, domestic conduct relating to international conduct is paramount to extraterritorial application of IP law.

The DTSA is the only area of IP law discussed that has met the threshold question of Congress' intent. This displays the U.S. concern for national security as it pertains to the theft of trade secrets.

Importantly, all areas of IP law could be applied extraterritorially, if Congress so directed. However, it is clear that patent, trademark and copyright law do not raise the same concerns as trade secrets and, therefore, no immediate change in U.S. law is expected in the near future.

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The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

[1] Michael Brody et al., Extraterritorial Application of U.S. Patent Laws, 18 Sedona Conf. J. 187, 188 (2017).

[2] William S. Dodge, The New (Old) Presumption Against Extraterritoriality, TLB (Sep. 6, 2023).

[3] Timothy R. Holbrook, Is There a New Extraterritoriality in Intellectual Property?, 44 Colum. J. L. & Arts 457, 459 (2021).

[4] Motorola Sols., Inc. v. Hytera Commc'ns Corp. Ltd. , Nos. 22-2370 & 22-2413, 2024 U.S. App. LEXIS 16120 (7th Cir. Jul. 2, 2024).

[5] Id.

[6] Id.

[7] Id. at *31.

[8] Id. at *15.

[9] Id.

[10] Motorola, 2024 U.S. App. LEXIS 16120.

[11] Id. at *14.

[12] Id.

[13] Id.

[14] Id.

[15] Abitron Austria GmbH v. Hetronic Int'l, Inc. , 600 U.S. 412 (2023).

[16] Id. at 413.

[17] Id. at 414.

[18] Id.

[19] 35 U.S.C. § 271(a).

[20] Microsoft Corp. v. AT&T Corp. , 550 U.S. 437, 441 (2007).

[21] See Microsoft Corp., 550 U.S. at 441 (quoting 35 U.S.C. § 271(f)(1)).

[22] Id. at 447.

[23] Id.

[24] Id.

[25] Id.

[26] Id.

[27] Microsoft, 550 U.S. 437.