argument next and number two thousand and ten thirteen ninety five and really group company against the international trade commission involved in the process and structure of the plant correct that is correct so there was exposure they were exposed to the trade secrets they want to know those of the trade secrets with there is no finding in this case that any trade secrets were to take it  from the united states the the taking the movement of a carrot as in carrying a piece of paper or taking in your head mean if these people are in alabama and they went to china they knew the trade secrets and trade secrets were taken in that in the literal sense of the term right your honor i have i don't want to go beyond what is in the record or in this appeal but there was a charge of misappropriation of i believe two hundred sixty trade secrets that was ultimately a finding of one hundred twenty eight misappropriated trade secrets and i don't think there is any suggestion in the record that any individual or group of individuals took two hundred sixty or one hundred twenty eight trade secrets from a two or three week training program in the united states ten years befor plant was being built in the united in china and the is your argument the misappropriation occurs only in china because that's where the relevant secrets were transferred from the people who had a duty to keep them intends to misappropriate a secret give it to your competitor in china and you know he comes to your company he learns the secret he gets the secret and he says how can a plane with me let's go over the pa and once he gets over the past you know into london or somewhere else he then conveys the secret that helps on the plane comes back into the united states would that act of misappropriation first of all i have to say that that is not this case second of all i would say that that act of misappropriation occurred in the united states and the commission could well have already over that act of misappropriation which did occur in the united states even though the carrying of the information  insistency in trade secret law among the states is because there would have been a duty to maintain secrecy an obligation of confidentiality and the acquisition of confidential information by the perpetrator occurred in the united states who then carried the information abroad what the employee needs learned the information in the u s in this case didn't the employees learn the information while they were at the plant in alabama no your honor that that is not what this record shows that is not with the commission's opinion says the commission's opinion is premised on documents that were found  in china on the on people's computer but there is no suggestion that anything moved from the united states to tribe but that there is a finding i take it that all of the chinese factories correct that is to say the and states licensee chinese factories the a c c and tom the answer is yes your honor but that written undertaking came very late in the process and is subject to trying these law well but if there is an undertaking then why isn't it when you say late in the process late in the process after they had disclosed the secrets  i think that is the underlying question your honor whether what they transmitted constitutes trade secrets under chinese law in contravention of whatever confidentiality agreement they ha entered then it would seem to me that the default of the common law of the state or the statutory law of the state or country that you are where you are present might have some significance but where you you engage in name a pledge of confidentiality which you breach then it would seem to me that puts this case in a rather different posture i believe your honor the facts that you are describing are facts that would have to be determined in the first in the state where these acts occurred even illinois under its conflict of laws statues or holdings would apply in chinese law chinese law was not applied here but more importantly there was no authority on the part of the commission to reach into china to determine what the facts were  with respect to the events that occurred in china and i think the part of the proof of that if you will is that in this in the briefing before this  court the parties on the other side are actually trying to distance themselves from this very notion of extraterritorial application suggesting that the misappropriation actually occurred in this country not because of the event that your honor was asking about but because of subsequent use of the railway wheels in an effort to to import them to sell them to have authorization was open and that use under the illinois statute cannot be looked at in isolation because use is is either acquisition by improper means again means and secondly duty to maintain secrecy these are both matters of conduct that a foreign jurisdiction must adjudicate locally or require extra territorial a surety which no one that correct in thinking that we should accept for purposes of the various issues in this appeal the facts that are set forth in there to the extent they're not challenged on i think  answer to that is yes your honor because we are appealing to issues as a matter of law we say that the commission does not have the authority under section three thirty seven to reach into acts that took place and we say entirely in china and the second argument is as a matter of law there is no domestic industry because of the way that concept has been defined by the committee i asked i asked that question as i wasn't clear and as a result of colloquy what i heard your discussion with judge bryson as to whether there was some factual question or not i believe to the extent that there is a question about the word training i believe  is that is used in the id but you know determination which was adopted by the commission but the judge never suggested that the training of these people constituted the act of obtaining the trade secrets which to to follow up on judge moore's question was subsequently transferred in this case it was something like ten years later it's supposed that the illinois trade secret law on misappropriation was quite clear and it said it constitutes an act of abuse an act of misappropriation to bring into the jurisdiction any product that has been made by someone else's trade secret so the act of misappropriation isn't the seth and all of that it's misappropriation is extended to include simply bringing the result into product into the jurisdiction even if the misappropriation occurred in china entirely in china i suppose that that was illinois law i don't tell me that some constitutional or overreaching because i'm not going to decide that part right now but suppose that that's there a law what would wouldn't it then be an act of unfair competition which could fairly be reached under three three seven a because then it would be an actual act of unfair competition in the united states because it would meet illinois express definition of border and if it can be established at the border as it is in patent copyright trademark or common law trademark cases that the object that is being imported has something unfair about it then section three three seventy five if you cannot make that determination order i don't know how many state laws would have to be written i would still argue that section three thirty seven would not be implicated because it is a  enforcement statute that derives its authority from congress which at least according to am tort is limited to acts that occur in the united states as supplemented by microsoft by more recently in the morrison supreme court decision suppose he is what gives me pause about your position particularly in light of your response to judge moore's original hypothetical the trip to london it sounds as if what you're saying is that it would be one thing and perhaps reachable under three thirty seven if there's a trade secret in a factory employing the trade secret here somebody takes a trip to london disclose s over there and then the products are and shipped back but that three thirty seven cannot apply if the owner of the trade secret licenses or even builds a plant in england and obtains promises what does everything possible to ensure the protection of the trade secret but the trade secret is disclosed nonetheless and the products are imported back three thirty seven is simply their hands are tied and you just  you just going to have to ask the director of public prosecution in london to take care of that and that's exactly what the courts have said your honor that's what the court said that the court there aren't any court decisions with respect to three thirty seven on this issue you're correct about that your honor but with respect to a loophole gap whatever you want to call it in the statute which was apparently in the microsoft situation the supreme court's the remedy lies abroad if you ship your in that case hard disk to london and you find somebody copying it you're going to have to go to london to to get your remedy you cannot use laws in the united states but here or there products are coming back i mean it seems to me the difference between this case and the and the great bulk of the extraterritoriality cases is that sure you don't have a cause of action under illinois law i'm to assume again somebody who discloses a trade secret in china which is used to make railroad wheels or get shipped to germany that's extra that would be extraterritorial application of the  of these are products that are coming back into the united states that renders the the conduct it's being regulated i e the implication not extraterritorial that name mean that some of the activities are extra territorial but it doesn't the ultimate cause of action is predicated on something that happens at our border your honor your decisions in the amgen cases are very close to what you're describing there were inputs that were not covered by the statute the products came into the united states and even the patent was not found to be in french because it was not covered by a process pat or the input was not considered to be an infringing input there is nothing unusual about activities occurring abroad resulting ultimately in an importation and our courts say we can't reach that and section three thirty seven with all due respect does not give in the words i believe the supreme court in either morrison or microsoft does not give the i t c or section three thirty seven authority to rule the world and simply roam all over and say that's unfair that's unfair that's an infringement it has to be in the statute i see that of it in the act of misappropriation had occurred in the united states and you agree this would be different if the place in the united states and that misappropriation resultant directly in a product being manufactured abroad back into the united states our forum our illinois courts our georg courts would be in a position to determine whether something untoward occurred as that misappropriation was occurring and then you have the border enforcement statute that says oh now we see it coming into the border we're going to cross the border to lower the burden if you will on statutory ip by giving them an extra task to or to establish domestic industry and eliminating the need to to prove injury so the rationale of the commission opinion commission as providing protection only for articles which come within the claims of the asserted ip in that case it was a happen nothing has changed with respect to that loans and in practice and  course brief that since one nine hundred eighty three the commission's decision in markers in two thousand and five being the latest example of this system approach in non statutory cases the final point to like to make is that basically took itself out of the ambit of section three thirty seven when it voluntarily closed its plan in the united states that had been using the a b c technology ten years ago it concern counsel my concern is suppose that somebody at the border gets a bug in their ear about minimum wage and they decide it's an act of unfair competition in china if they pay people ten cents an hour to build this because then they can bring the product in a lot cheaper and that hurts our domestic industry well wouldn't be the kind of unfair competition that could then allow the border to stop those imports correct correct ok so the unfair competition has to have a nucleus in the united states meaning something unfair had to have been identified or kurd here in the u s not unfair competition that stems from different treatment happened what tell me exactly what constituted the breach of the duty that was imposed on people who breached the duty there were celebrations of duty are one of them was going to be one of them was when t n or when when the were in china never in the united states which i guess is either seven or six depending on how you count it sounds like they were two or three and alabama and six or seven in china ok the with respect to the chinese employees don't see the use in the united states yet as far as the coldness case goes i would think that there are distinction to you which i think they actually many but i don't remember for sure where is that this is a case about the formula this is like coca cola this is a case about the product the trade secret is the formula right and the thing up in the case it's right but here are the trade secrets across so under illinois trade secret logs not surprising for them to say use in illinois the sale in illinois of the product of the product itself is the trade secret amounts to use but that's very different than saying use of a process is created simply when someone has the misappropriation actually occurs in the united states namely to employees in the united states convey a secret it's then communicated abroad where it's manufactured so the conveyance the stealing with theft of the secret misappropriation o urs entirely in the u s and then it's conveyed abroad for purposes of manufacture because it's cheaper to manufacture blood then when those goods are imported you have an act of misappropriation the kurds in the u s i think my fundamental problem with your position is i don't see an act of misappropriation in the united states and if that's the case i don't see how this is any different than minimum wage and everything else in china you are i think going to look at all my trade secret law it's very very clear that you that it's not just acquisition or disclosure can also be use of a product even under not so use of a product but i don't agree with you i don't see we're illinois law so it's use of a product even amounts to misappropriation of a process you don't even under briefing i think that you're either i'm misunderstanding what you're saying where you're granted misrepresenting there are i would invite you to read the entirety of their reply memorandum and the much of terminate which they put a flood of pages into the appendix but i invite you to read the entire memorandum if i think jurisdiction trade secret cause of action where obviously you applied the state law because that's the law you apply but it seems to me that given the nature of the statute which is  unfair practices that it me make more sense to look to what the commission had previously said in copper and sausage which is this is a sort of federal common law question would you agree with that as opposed to looking just as a matter of of the way we should approach this it seems to me peculiar to be talking so much about illinois and that of talking about what congress did which was to say to the commission unfair practices and then referring to generically to a number of anti competitive practices that sound like they invoke a kind of federal common law and that in the commission certainly when the court instructed us that with a question certainly know i think it is it your position is huge in general is your position that there doesn't have to be a misappropriation of a trade secret within the physical boundaries of the united states misappropriation enough that there have been those do you have to have an improper conveyance of information in the united states in your view and but i would point out though that and the product was and so imported in the united states would fall under three three seven eight unfair competition and courts our courts went back and forth a little bit we have the m tor case and then we have congress and the  federal circuit well the c c p are precedents predecessor which were bound up that held three three seven day in this regard did not protect when the process was used abroad that couldn't fall under three three seven and congress stepped back and said well that's a perverse result we don't like that result and so they enacted a special statutory section three three seven b to well it was originally different you know the morning may please the court being pelletier on behalf of amstetten intervenor allow me to dispel one myth misappropriation occurred in the united states on j one thirty one through one thirty two of the end of the initial determination the but the wonders to breach of and misappropriation acquires a breach of get right with all he can all of that with all due respect your honor not to be alarmed trade secrets act if you look into the illinois trade secrets act and previously what's been cited if you is common law that predated the illinois trade secrets act in some cases there must be a duty but reach of a duty comes in only when improper means as an element of the misappropriation cause of action improper means is not an element of every misappropriation  action under illinois law what's misappropriation that doesn't involve the breach of the dood it could be that you knew or had a reason to know that your acquisition of those trade secrets at that time were derived from a person who right but there's no no no in effect the duty is extending to you because by virtue of your knowledge that you don't have knowledge you don't have a duty and i think if you don't have knowledge or reason to know the trade secret it wasn't intended to be waved but it showed up on your doorstep one day quite by mistake you have no duty and therefore if you make use of the trade secret you haven't violated the illinois trade secret lot right well i remember circumstances required but it is right there has to be a duty but there is no express requirement in the statute for you knew or should have known of a breach of their duty by and that i don't understand that well i don't under under seven sixty five i also yes and sixty five slash two which is the only trade secrets act which defines misappropriation there are multiple forms of misappropriation acquisition disclosure or use it's a disjunctive task acquisition of the trade secret yeah itself is not misappropriation if i'm working at the plant and they give me the trade secret i they they want to give it to me the intend for me to use it that's not misappropriation that's simply possession of the trade secret at some point i have to do something long or somebody else knowing that i have to trade secret in a duty asked do something which is a breach of duty right if you do not have the consent in the definition of improper means and the owner legislature has specifically called out when you are relying on a portion of the statute that requires improper means breach is one way to show in iraq ok where is the breach in this case where is the improper instances of that breach because there are multiple instances in which the appellant knew or had reason to know that they had derived the information from people who had a duty those people we talked earlier to panel that earlier up training and  j ninety nine to one hundred yes i'm right there does the administrative judge make a finding that they obtained the secrets at that point as mr schomberg said no that's not that's a stretch because the ministry of judge according to mr schomberg never really found that they obtained and carried with them in effect where they were in their head or otherwise trade secrets what's your take on that they actually were exposed to the trade secrets because the trade secrets are embodied in the a b c process if they were instructed  really well the factual question of what the trade secrets are starting to spew out and those were taken those were originally implemented if you will or implemented it the clear alabama facility and then when the calera out the technology was transferred through an agreement to  c the same technology in alabama that these folks specifically came over to get up to speed on so when this technology was provided to these people they were intimately familiar with it from the days of calera it was used in the a c c that same technology they were then made aware of that confidentiality agreement the other eight yes what what's the situation with with him not only was he the only one of the nine left it didn't sign he was the only one that didn't sign and it was conspicuous because three months later he decided to leave to go to work for tea and read yes but what where does his duty come from employing code of conduct i said which he was expressly made aware and that's in the director's initial determination hence the commission's determination that the employee code of conduct specifically called out obligations with respect to confidential information including the trade secrets and as to the other seven who are all entirely based in china and you're never going to alabama or anywhere else you say their duty arises from what they're signing the confidentiality pledges plus the employee code of conduct yes at least that as well as well as being reminded of their obligations at various points section three three seven there's a train statute section three three seven regulates in addresses importation would you agree with and if i can interrupt you again i'm sorry we won't hold your strictly to your time would you would you agree with miscast in that this should be looked at more as a federal common law of trade secrets as opposed to illinois law or ma law or georgia law or do you think a state law referent is correct state law is correct as the unfair methods of competition one of which is has been regarded as being something in the nature of trade secret violation but that doesn't lock us in to applying state law it seems to me why shouldn't  apply what the commission has traditionally done which is to say this you look to the general law of unfair competition including trade secret i think because for the same reason that you would look to state law in any under any other circumstance there are police developed secret violation is is one thing under to be considered a third there are three thirty seven but is it the case that we're not limited to that with the sausage case in mind i do not believe that you would i do not see how you would be unfair because it's unfair competition yes and on the any unfair kind of the federal common law would develop what unfair competition is and if there is such unfair competition at the end of which there is an importation three theories on the possible if there was if there was such a a sufficient body of lard to proceed under i think it's just a situation where to me it doesn't appear to be that much of a difference to go from state law to state trade secret law which is fully developed in many instances indeed this is all emerges it seems to me as an historical matter from the first such that it which was a federal trade commission act right that was the first one of these statutes that there was an act and it talked about unfair methods of competition supreme court construe that statute on several occasions to mean you look to the general law not you don't look to the law  and so forth so it's strikes me as kind of peculiar to say but when we get to three thirty seven we have a terribly different take on because it's the same language exactly i don't see if there would be as i don't see there would be a difference in this case it would not be determin the outcome in this case you know ok but i do not just so you know what about a party at any point did either party at any point argue federal common law or has it been accepted by both parties that illinois state law applies nobody here would it be covered under the patent act but an import was about whether three three seven a three three seven then would cover as a form of unfair competition someone's use of a process protected in the us but fully used abroad to be able to block imports coming in that have resulted from that process mean it seems almost identical if i don't believe that misappropriation occurred in the perfectly but you do agree that it's not an act of misappropriation suppose they never tried to import this product into the united states those chinese companies who brought the employees over the employees revealed the secret to them only then sold the product in china never brought them to the united states that's not an act of misappropriation correct that violating any underlying us that would not be a violation of section three seven and or any or unfair under three three seven even though it wasn't separately protected because at that point the getting trying to get it to have a corporate i think it makes perfect sense is that the patent act didn't say use of a product made by a patent process sale of that product made patent process is an act of infringement under bill an oil law uses a broad concept use of a product made by a process comprising three secrets is use of the trade secrets so here use of the cheating re wields is use of amstutz trade secrets and it amounts to misappropriation i understand your argument perfectly it's illinois law however step which i know it doesn't but if it said expressly it's not misappropriation to use the result product only the use of the process is an act of misappropriation ok suppose that's what illinois a trade secret law said then would you agree three three seven it would not be allowed to bar the importation of these  of i haven't fully digested your hypothetical but as i stand here i think that might be a difficult case to make if everything took place abroad and illinois law was one hundred eighty degrees from where it is  today then you would agree though that three three seven a wouldn't allow you as a form of unfair competition to block that import under those circumstances so none of the other facts of record  statutory dichotomy where the domestic industry requirement to that analysis in the is in the legislative history senate report number one hundred seventy one dated june twenty one thousand nine hundred eighty seven at pages one twenty eight and three forty seven congress expressly considered grouping trade secrets in with federally protected intellectual property rights for purposes of the domestic industry requirement congress rejected that approach plain and he was laying to the statute bears that out there are two separate domestic industry requirements under section three three seven a want to say the domestic industry requirement does not require a technical wrong the domestic industry requirement under section three three seven a one way is satisfied as it was here by showing the existence of domestic operations that are the target of the unfair acts and practices taking the marketplace realities the commission's determination of violation and its meal orders should be affirmed thank you the interesting thing about sausage casings and ties it actually to the morse and case as i believe judge moore has indicated is that the morrison case was brought at a time where the statute only talked about unfair methods of competition and unfair acts as was the sausage casings case because that was not a statutory i p x in both of those cases the court said in morrison we cannot exclude these products we cannot find a violation of section three three seven because there is nothing in the statute that would allow us to do that in sausage casings no one raised the issue of extraterritorial application of of the statute and the court in am to or had earlier said if something has not been argued to us as it had not been in the cases that i am toward in effect overruled we reserve the right to reconsider that and in fact then overrule those earlier cases so whether you done here i think there is a point beyond which it reviewing court cannot go in order to sustain what the agency has done and finally as a purely factual issue if your honor is focused on it you have mentioned the name she renny a couple of times if your honor is interested first of all his employment contract is referenced at see x thirty three c which is a confidential exhibit which is the employment agreement that was offered to mr rennie and it contains as well his reasons for rejecting it should the court