IP Law Daily, TRADE SECRETS—5th Cir.: Israeli tech company’s trade secrets lawsuit against former employees and rival properly dismissed, (Oct 14, 2025)

By Ravindra Kumar Singh, B.L.

District court correctly found that Israel provides an adequate and more convenient forum for resolving the dispute.

The U.S. Court of Appeals for the Fifth Circuit affirmed a Texas district court’s dismissal of a trade secret lawsuit between Swiss-Israeli automotive technology company OSR Enterprises and Israeli electric vehicle manufacturer REE Automotive, ruling that Israel was the more appropriate forum for the dispute. The panel found that OSR failed to show that Israeli law was inadequate or that the district court had abused its discretion in weighing the private and public interest factors that govern forum non conveniens determinations (OSR Enterprises AG v. Ree Automotive, Ltd., No. 24-50779 (5th Cir. Oct. 10, 2025)).

Background. The plaintiffs/appellants, OSR Enterprises AG, a Swiss company, and its Israeli subsidiary, OSR R&D Israel Ltd., design artificial intelligence (AI) and autonomous vehicle systems. The defendant/appellee, REE Automotive Ltd., is an Israeli electric vehicle manufacturer. Initially a producer of mechanical suspension systems for wheelchairs, REE shifted focus to electric and autonomous vehicles after hiring several senior OSR engineers, including OSR's head of research and development, Ohad Stauber.

OSR claimed that REE’s central AI processor unlawfully incorporated its proprietary “EVOLVER” technology- an AI-driven central computer that integrates vehicle control and safety functions. The company alleged that its source code, algorithms, and design architecture were unique and took years of research to develop. OSR maintained it was “inconceivable” that REE—lacking prior experience in AI automotive systems—could have produced its processor without misusing OSR’s trade secrets.

In 2019, OSR’s R&D head, Stauber, allegedly copied EVOLVER’s source code to an external drive before resigning and joining REE. Several OSR employees followed him. Within a year, REE unveiled an “advanced, central AI computer processor” similar to EVOLVER and later introduced autonomous vehicle platforms such as the “REE Leopard.”

In 2022, OSR sued REE in the Western District of Texas. The amended complaint, filed in 2023, asserts claims under the Defend Trade Secrets Act (DTSA) and the Texas Uniform Trade Secrets Act (TUTSA), alleging misappropriation and unfair competition. OSR argued that REE’s new U.S. presence—through a Texas-based subsidiary and partnership with EAVX—made Texas an appropriate venue.

REE moved to dismiss for forum non conveniens, contending that Israel was the natural forum since the key witnesses, employees, and evidence were located there. The district court agreed, adopting a magistrate judge’s report and recommendation concluding that Israel was both available and adequate, and that all relevant factors favored dismissal. OSR appealed.

Adequacy of the forum. The Fifth Circuit began by reaffirming the presumption that foreign legal systems are adequate unless the plaintiff shows otherwise, citing Quintero v. Klaveness Ship Lines, 914 F.2d 717, 728 (5th Cir. 1990). It noted that a foreign forum is inadequate only if it offers “no remedy at all.”

OSR argued that Israeli law could not issue injunctions against misappropriation occurring outside Israel. Competing expert declarations reached opposite conclusions—OSR’s expert called it “very likely” Israel would not grant such injunctions, while REE’s expert said it could. The court held that speculation about Israeli law was insufficient to rebut the presumption of adequacy.

OSR also argued that Israel did not recognize its unfair competition claim because it was not based on breach of fiduciary duty by former employees. The Fifth Circuit rejected this argument, noting that Israeli law provides similar remedies under its Commercial Tort Law. Citing Kempe v. Ocean Drill & Exploration Co., 876 F.2d 1138, 1142 (5th Cir. 1989), the court reiterated that a forum remains adequate if it offers some form of meaningful relief.

Finally, OSR contended that Israeli witnesses might refuse to testify under the privilege against self-incrimination. The appellate court dismissed this as irrelevant to the adequacy inquiry, noting that U.S. courts could not compel Israeli citizens' testimony under Rule 45 of the Federal Rules of Civil Procedure.

Private interest. Applying Saqui v. Pride Central America, LLC, 595 F.3d 206, 213 (5th Cir. 2010), the court reviewed the private interest factors—access to evidence, availability of witnesses, costs, and trial practicality.

On access to evidence, OSR argued that much documentation was in the U.S., but REE showed that all relevant records and communications were stored and managed in Israel. The appellate court reaffirmed that evidence location remains relevant despite digital accessibility. Regarding witness availability, most witnesses were Israeli citizens outside the subpoena power of U.S. courts. The court emphasized that litigating in a venue where essential witnesses cannot be compelled is undesirable, quoting DTEX, LLC v. BBVA Bancomer, S.A., 508 F.3d 785, 799 (5th Cir. 2007). Further, the court found that trial costs would be higher in Texas, as securing the attendance of Israeli witnesses would be prohibitively expensive. The view of premises factor was irrelevant since the claims involved source code, not physical property.

OSR also claimed that the Israel-Hamas war and language barriers would hinder proceedings, but the court rejected these points, noting they were not raised in the district court and lacked evidence of significant prejudice.

Public interest. Turning to public considerations, the court cited DTEX again, noting the factors: administrative congestion, local interest, familiarity with applicable law, and jury burden. The Fifth Circuit agreed that Israel had a stronger local interest, as the alleged misappropriation occurred there and involved Israeli parties.

The court rejected OSR's contention that U.S. interests predominated because REE operated subsidiaries in Texas. REE had no employees in the United States, and its Pflugerville "integration center" was non-operational. Therefore, the Western District of Texas correctly found that it had little connection to the dispute.

Finally, the jury burden factor weighed heavily toward dismissal. The court reasoned that imposing jury duty on Texas citizens in a case “almost entirely unrelated to this forum” would be unfair.

Thus, the appellate court held that Israel was the natural and adequate forum for the dispute.

The Case is No. 24-50779.

Judge: Per Curiam.

Attorneys: Paul J. Burgo (Kasowitz, L.L.P.) for OSR Enterprises AG and OSR R&D Israel, Ltd. Lawrence Bradley Hancock (Holland & Knight, L.L.P.) for Ree Automotive, Ltd., Ree Automotive Holding, Inc. and Ree Automotive USA, Inc.

Companies: OSR Enterprises AG; OSR R&D Israel, Ltd.; Ree Automotive, Ltd.; Ree Automotive Holding, Inc.; Ree Automotive USA, Inc.

Cases: TradeSecrets TechnologyInternet LouisianaNews MississippiNews TexasNews