Trade Secrets

vPersonalize v. Magnetize: How a U.S. Court Reached a U.K. Defendant Under the DTSA

A Washington federal court holds that the Defend Trade Secrets Act reaches a foreign defendant whenever an act in furtherance occurs in the United States — even an act the defendant did not commit.

February 1, 2026
Shipping containers and a world map suggesting cross-border movement of proprietary data
The decision tests how far a U.S. trade-secret statute can reach conduct that mostly happened abroad. Shutterstock
Educational content, not legal advice. This article explains general legal concepts. It does not create an attorney–client relationship. For your specific situation, consult a licensed attorney.

In vPersonalize, Inc. v. Magnetize Consultants Ltd., 437 F. Supp. 3d 860, No. 2:18-cv-01836-BJR (W.D. Wash. Feb. 3, 2020), Judge Barbara Jacobs Rothstein confronted a question that the Defend Trade Secrets Act’s drafters left for the courts to work out: when can a private plaintiff use the federal trade-secret statute to sue a foreign company for conduct that mostly happened overseas? The defendant, a United Kingdom company doing business as “Kit Builder,” argued that the DTSA’s civil remedy simply does not reach a foreign entity. The court disagreed. Ruling on a Rule 12(b)(6) motion to dismiss the first amended complaint, it held that the statute’s extraterritoriality provision, 18 U.S.C. § 1837, requires only that “an act in furtherance of the offense was committed in the United States” — and, in a reading that has drawn attention well beyond the case, that the act in question need not be one the defendant itself committed.

The underlying dispute is ordinary software competition. vPersonalize, the plaintiff, develops technology for automating the design and manufacture of custom-printed apparel; it held U.S. Patent Nos. 9,345,280 and 9,661,886 on methods for that process. Magnetize Consultants Ltd. markets a competing product called Kit Builder. vPersonalize’s amended complaint pleaded patent infringement (Counts I and III), a DTSA misappropriation claim (Count IV), and a Washington Consumer Protection Act claim (Count V). The trade-secret theory was that Magnetize obtained access to vPersonalize’s proprietary product, source code, patterns, and technical documents through at least one U.S.-based third party, Inksewn USA Corp. The court let the core patent claim and the DTSA claim proceed while dismissing the indirect-infringement and state-law counts.

At a glance

  • Case: vPersonalize, Inc. v. Magnetize Consultants Ltd., 437 F. Supp. 3d 860, No. 2:18-cv-01836-BJR (W.D. Wash. Feb. 3, 2020) (Rothstein, J.).
  • Posture: Order on a Rule 12(b)(6) motion to dismiss the first amended complaint; granted in part, denied in part. The DTSA claim (Count IV) survived; Counts III and V were dismissed.
  • Statute: Defend Trade Secrets Act of 2016, 18 U.S.C. § 1836 et seq.; the extraterritoriality provision at 18 U.S.C. § 1837, carried over from the Economic Espionage Act.
  • Core holding: The DTSA’s civil cause of action applies extraterritorially through § 1837, and § 1837(2) is satisfied whenever “an act in furtherance” is committed in the United States — including an act committed by someone other than the defendant.
  • Why it matters: The opinion is one of the earliest civil decisions to read § 1837 broadly enough to pull a foreign software competitor into a U.S. courtroom on the strength of a domestic intermediary’s conduct.

The extraterritorial reach of the DTSA under 18 U.S.C. § 1837

The DTSA gave trade-secret owners a federal civil cause of action in 2016, but it did not write its own extraterritoriality rule. Instead, Congress slotted the new private remedy into Chapter 90 of Title 18 — the Economic Espionage Act — which already contained § 1837. That provision states that “this chapter also applies to conduct occurring outside the United States” if either (1) the offender is a U.S. citizen, permanent resident, or an entity organized under U.S. law, or (2) “an act in furtherance of the offense was committed in the United States.”

Magnetize’s lead argument invoked the presumption against extraterritoriality the Supreme Court restated in RJR Nabisco, Inc. v. European Community and Morrison v. National Australia Bank: federal statutes are presumed not to reach foreign conduct unless Congress clearly says otherwise. The defendant’s position was that the presumption barred a private DTSA plaintiff from suing a foreign entity at all. Judge Rothstein rejected the premise. Section 1837 is exactly the kind of clear statement the presumption requires; because the DTSA’s civil action lives inside the same chapter, the extraterritorial hook applies to private suits as much as to criminal prosecutions. The court read nothing in the statute limiting § 1837 to the government’s enforcement actions.

That conclusion matters because the alternative — a federal trade-secret statute that goes silent the moment a defendant is foreign — would have left U.S. companies to chase cross-border theft almost entirely through state law and foreign courts. The court’s reading instead treats § 1837 as the operative gatekeeper for every international DTSA case: the question is never simply whether the defendant is abroad, but whether one of the two § 1837 conditions is met.

The “act in furtherance in the United States” requirement

Having located the source of extraterritorial reach, the court turned to the prong that mattered on these facts. Magnetize is a U.K. company, so § 1837(1)‘s nationality test was unavailable; the case rose or fell on § 1837(2)‘s “act in furtherance” requirement. Magnetize argued that even if the provision applied, the relevant domestic act had to be one the foreign defendant itself committed.

The court refused to add that limitation. As it read the text, “the extraterritoriality provision of § 1837(2) requires only that ‘an act in furtherance of the offense was committed in the United States’” — and “pointedly (and the Court must assume intentionally) does not require the defendant to have committed such act.” The grammar does the work: § 1837(2) is written in the passive voice and identifies no actor, in deliberate contrast to § 1837(1), which expressly turns on who “the offender” is. Where Congress wanted to tie the inquiry to the defendant’s own status, it said so; where it did not, the court declined to supply the missing words.

On the pleadings, that reading was enough. vPersonalize alleged that Kit Builder “improperly obtained access to vPersonalize’s proprietary product, patterns, software code and technical documents through at least one third-party, Inksewn USA Corp.” Because Inksewn’s domestic conduct was an act in furtherance of the alleged misappropriation, § 1837(2) was satisfied even though much of Magnetize’s own activity occurred in the United Kingdom. The DTSA claim therefore stated a viable theory and survived dismissal.

Cross-border theft and the role of the U.S. intermediary

The practical center of gravity in vPersonalize is the third party. Modern trade-secret theft rarely travels in a straight line from victim to foreign competitor; it moves through vendors, contractors, distributors, departing employees, and resellers, some of whom sit on U.S. soil. By reading § 1837(2) to count those intermediaries’ domestic acts, the court made the statute track the way cross-border misappropriation actually works. A foreign competitor that never sets foot in the United States can still be answerable here if its alleged scheme ran through a domestic conduit.

That alignment is a feature, but it also widens the aperture considerably. A U.S.-based access point, server, or distribution partner becomes a jurisdictional anchor for a foreign defendant, which raises the stakes of how courts will eventually cabin the “in furtherance” concept. vPersonalize did not have to define the outer edge — it was a motion to dismiss, and the alleged domestic acquisition was concrete. But its logic invites plaintiffs to plead a U.S. nexus wherever one plausibly exists.

Open questions

The opinion answers the threshold question and leaves the harder ones open. How attenuated can the domestic act be before it stops being “in furtherance” of the offense? vPersonalize involved an alleged U.S. acquisition of the secrets themselves; later courts, including in the Motorola Solutions v. Hytera litigation, have grappled with whether more incidental domestic contacts qualify. Must the domestic act be wrongful in itself, or merely advance the scheme? Does reading § 1837(2) to encompass non-defendant conduct risk pulling in foreign parties whose only connection to the United States is an intermediary they neither controlled nor knew about? And because this was a pleading-stage ruling, none of the extraterritoriality findings were tested against a developed record — a defendant might still defeat the theory at summary judgment by disproving the alleged domestic act. The decision also did not resolve how a worldwide DTSA judgment would be enforced against a foreign entity, a problem that surfaces only after liability is established.

Implications

  • Foreign status is not a shield. A U.K. or other foreign defendant cannot defeat a DTSA claim merely by being foreign; the inquiry runs through § 1837, not the defendant’s nationality alone.
  • Plead the U.S. act. Plaintiffs targeting overseas competitors should identify a concrete act in furtherance committed in the United States — access to a domestic server, a U.S. intermediary’s involvement, or a stateside acquisition of the information.
  • Intermediaries create exposure. Under vPersonalize, a third party’s domestic conduct can satisfy § 1837(2), so foreign companies should diligence U.S. vendors and partners who touch competitors’ confidential material.
  • The reach is statutory, not boundless. Section 1837 is a clear-statement hook, but the “in furtherance” requirement is a real limit that defendants can attack factually as the record develops.
  • Mind the companion claims. The state-law CPA count was dismissed while the DTSA claim survived, a reminder that the federal statute’s extraterritorial reach can outrun parallel state theories.

Frequently asked questions

Does the Defend Trade Secrets Act apply to foreign companies? Yes, in appropriate cases. vPersonalize holds that the DTSA’s civil remedy reaches conduct outside the United States through 18 U.S.C. § 1837, so a foreign defendant can be sued when one of that section’s conditions — a U.S.-tied offender or a domestic act in furtherance — is met.

Must the foreign defendant itself commit the U.S. act? No, according to this court. Judge Rothstein read § 1837(2) to require only that “an act in furtherance of the offense was committed in the United States,” and held that the statute “does not require the defendant to have committed such act.” A U.S.-based third party’s conduct can supply the necessary domestic act.

Is vPersonalize binding on other courts? No. It is a district-court decision from the Western District of Washington and is persuasive rather than binding elsewhere. It is, however, an influential early civil reading of § 1837 and is frequently cited alongside other cross-border DTSA rulings.

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