TikTok Must Turn Over Code, Financial Data in Trade Secrets Suit

A special master ordered TikTok Inc. to hand over source code, financial data, and usage data for the foreign distribution of its applications to a Chinese tech company accusing it of copyright infringement and misappropriation of trade secrets.

Beijing Meishe Network Technology Co. demonstrated that information about TikTok, and the CapCut and BytePlus Video Editor programs, could reveal the apps copied its source code, according to an order issued Monday in the US District Court for the Northern District of California.

TikTok currently faces an impending government ban in the US, which is scheduled to go into effect Jan. 19 unless its parent company ByteDance Ltd. sells off the short-video app. On Monday, TikTok and ByteDance asked the US Supreme Court to block the ban for violating the First Amendment by singling out the company.

Meishe sued TikTok in 2021 in the US District Court for the Western District of Texas, accusing former engineer Jing Xie of trade theft. The complaint alleged Xie took copyrighted and trade secret-protected code covering video- and audio-editing technology in 2015 before becoming an audio and video director at TikTok in 2017.

The case was transferred to California in 2023 after the US Court of Appeals for the Fifth Circuit held Judge Alan D. Albright’s order denying TikTok’s transfer request botched parts of a test to determine whether a suit should be moved to a more convenient venue. Honorable Kendall J. Newman (Ret.) was appointed as special master in April to handle discovery disputes.

TikTok argued discovery into its apps, including Faceu, Lemon8, and 轻颜, is irrelevant because federal trade secrets and copyright law only allow damages for conduct outside of the US if certain factual thresholds are met, which it said Meishe had failed to make.

Newman acknowledged there is a presumption against extraterritorial application of US statutes but said the discovery is relevant because Meishe may recover damages for foreign infringement if it proves TikTok infringed in the US and used that to enable foreign infringement.

Because the court already held Meishe adequately pled trade secrets and copyright claims to apply to the foreign apps, extraterritorial damages may ultimately be available to the company, Newman wrote. The order pointed to Meishe’s allegation that its code was improperly integrated into the TikTok app in the US, and that some of that code is used on other TikTok applications outside of the US.

Meishe “must have an opportunity to seek reasonable discovery to prove up these allegations, including allegations of entitlement to extraterritorial damages,” he added, and none of the cases cited by TikTok “warrant overriding the court’s explicit determination.”

TikTok has 30 calendar days to turn over the discovery, the order said.

In a separate order issued the same day, Newman partly granted TikTok’s motion to compel Meishe to turn over documents about its affiliate XAT that allegedly developed source code at issue in the case.

Cherian LLP represents Meishe. White & Case LLP represents TikTok.

The case is Beijing Meishe Network Tech. Co. Ltd. v. TikTok Inc., N.D. Cal., No. 23-cv-06012, 12/16/24.