The Senate has passed the Defend Trade Secrets Act—a bipartisan bill co-authored by Senators Orrin Hatch (R-UT) and Chris Coons (D-DE) that will save the American economy billions of dollars each year by combatting trade secret theft. This legislation—which passed the Senate by a vote of87-0—advances a key reform to intellectual property law by allowing companies to defend their trade secrets in federal court. Under current law, trade secrets—which include customer lists, algorithms, software codes, unique designs, industrial techniques, and food recipes—are the only form of intellectual property that U.S. businesses cannot protect from misuse or theft through federal civil action.
“Passage of this legislation is not only a critical victory for the intellectual property and business communities, but also an example of what Congress can accomplish when we put party politics aside and focus on areas of agreement,”Senator Hatch said. “Throughout my Senate service, I have always sought to to advance public policy priorities that will benefit everyday Americans and strengthen the national economy. Through this bill, we can do both.”
“For too long, businesses in Delaware and across the country that drive our country’s innovation and economic growth have been losing jobs and revenue because their trade secrets are open to theft,”said Senator Coons.“I’m thrilled the Senate came together in a bipartisan way to pass our bill that will finally give trade secrets the same legal protections that other forms of critical intellectual property enjoy. It’s a long overdue update that will empower American companies to protect their jobs in the 21st century. I urge the House to pass this bill now so the President can sign it into law as soon as possible.”
The bill is expected to pass the House of Representatives and be signed into law by President Obama in the coming weeks.
Statements of Support
The Intellectual Property Owners Association– [LINK]
This legislation was developed in the spirit of collaboration and consensus-building. We applaud its authors, Sens. Orrin Hatch, R-Utah, and Chris Coons, D-Del., and Reps. Doug Collins, R-Ga., and Jerrold Nadler, D-N.Y., for taking time to consider and address various industries’ concerns, and we thank the bill’s co-sponsors for their strong leadership, particularly in the current climate of political divisiveness.
The DTSA represents a valuable tool to remedy trade secret theft. The current legal tools available are inefficient and inconsistent with all other areas of intellectual property law, where federal civil remedies exist. Current federal law in this area, covered by the Economic Espionage Act, is limited. Though the FBI and Department of Justice can use this law, they have limited resources and numerous priorities and are not able to pursue all trade secret thefts. Likewise, state trade secret laws are not well-suited to respond to the movement of trade secrets across state and international borders or to act swiftly to preserve evidence and protect trade secrets from being further divulged.
Trade secrets are vital to the competitiveness of companies throughout our economy, and the threat to these innovations is becoming more serious and more complex. By creating a strong, uniform body of trade secrets law nationwide, the DTSA ensures that our laws keep pace.
Congress should move quickly to pass this important legislation because strong trade secrets protection is critical to the American economy and to manufacturers’ competitive advantage in the global economy. The DTSA encourages investment in cutting-edge research and development and will have an immediate, positive impact on our innovative sector, ultimately creating jobs and opportunity in manufacturing in the United States.
American innovation has brought consumers across the globe many of the cutting edge products and technologies that have, quite literally, changed the world. From life-saving medicines to computer software to incredibly efficient ways to generate energy, American companies are at the forefront of the “innovation economy” and the creators of millions of domestic jobs.
In an increasingly competitive global marketplace, it is critical that the right tools are in place to ensure that American ideas and jobs are not stolen and sold overseas. The U.S. Chamber of Commerce urges Congress to move this much needed legislation quickly so that it may become law and our industry and workers can remain at the forefront of the innovation economy.
Our state-by-state system for trade secret protection was simply not built with the digital world in mind where one device containing purloined information can literally destroy a hard-earned competitive edge. In today’s global economy, however, trade secrets are increasingly stored and used across state line and even national borders. A uniform, national standard for protection will greatly benefit innovative enterprises of all sizes.
We commend Senators Orrin Hatch and Christopher Coons and Representatives Doug Collins and Jerrold Nadler for introducing the bipartisan Defend Trade Secrets Act. This thoughtful and carefully considered legislation will adapt America’s trade secret regime to reflect 21st Century realities and will strengthen this critical form of intellectual property. We urge favorable and expeditious consideration by both the Senate and House.
In a world driven by innovation, American businesses large and small are setting the global standard for creativity and innovation. But the next generation of cutting-edge materials, semiconductors, devices, software applications and high-tech services does not come cheap. America’s most innovative companies thrive because they invest in research and development.
We are grateful that the bill’s lead proponent is Utah’s Sen. Orrin Hatch, whose consensus-driven approach has produced legislation that will benefit innovators in all industries, unifying groups that have often been at odds on other intellectual property issues. The bill enjoys broad, bipartisan support with 65 Senate sponsors and is scheduled for a vote in the Senate after its Easter break.
There is nearly universal agreement on the need for a federal remedy for trade secret theft, and Micron is proud to support legislation that reflects a rare consensus among lawmakers. Strong trade secrets protection is essential for America’s global competitiveness because it promotes an environment conducive to cutting-edge research, development, and collaboration. Enacting the bill will have an immediate, positive impact on innovative companies that create jobs in this country. We strongly support the bipartisan efforts of Hatch, and we urge Congress to move quickly to pass this important legislation.
Salt Lake Chamber and the Utah Technology Council–[LINK]
Trade secrets are the lifeblood of Utah’s innovation economy. The state’s businesses and manufacturers rely on trade secrets to protect their technologies, attract new investors, and maintain a competitive edge. But a glaring oversight in intellectual property law puts Utah jobs at risk. Even though trade secrets safeguard trillions of dollars in U.S. assets, companies have few legal options to protect their trade secrets in federal court if they are stolen — leaving this confidential information vulnerable to theft.
Thankfully, no one understands the heavy costs of trade secret theft better than one Utah’s own Sen. Orrin Hatch. As chairman of the Senate Republican High-Tech Task Force, Hatch has established himself as a leading voice for pro-growth, pro-business policies. Now, as he works to implement his Innovation Agenda for the 114th Congress, Hatch is spearheading efforts in Congress to provide greater federal protections to companies threatened by trade secret misappropriation.
Part and parcel to this effort is the Defend Trade Secrets Act — a bipartisan bill Hatch co-authored with Senator Chris Coons, D-Del. With 65 co-sponsors from both parties, the bill is expected to pass with overwhelming support.
This legislation empowers American businesses by creating a private right of action that allows companies to protect their trade secrets in federal court. It also equips business owners with the tools they need to combat trade secret theft, including the ability to seek injunctions and to retrieve stolen assets before they are lost for good.
In today’s electronic age, trade secrets can be stolen with a just a flash drive and a few keystrokes. Increasingly, this critical information is stolen at the direction of a foreign government or for the benefit of a foreign competitor. Trade secret misappropriation puts U.S. jobs at risk and threatens incentives for continued investment in research and development.
Current federal criminal law is insufficient. Although the Economic Espionage Act of 1996 made trade secret theft a crime, the Department of Justice lacks the resources to prosecute many such cases. State-level civil trade secret laws alone have not been sufficient to stop interstate theft. Federal courts are better suited to working across state and national boundaries to facilitate discovery, serve defendants or witnesses, or prevent a party from leaving the country. Laws also vary state-to-state, making it difficult for U.S. companies to craft consistent policies.
The Defend Trade Secrets Act:
Creates a federal civil cause of action for trade secret misappropriation that models the Uniform Trade Secrets Act.
A cause of action requires a showing of:
Acquisition of a trade secret by improper means; and
Disclosure or use of a trade secret by a person who had reason to know the trade secret was acquired by improper means or under circumstances giving rise to a duty of secrecy.
Additionally, in extraordinary circumstances a court may order anex parteseizure, based on the requisite showing that such an order is necessary to prevent destruction of evidence or dissemination of the trade secret. A court-ordered seizure must provide for the narrowest seizure necessary, that is least burdensome to the subject, and that allows the accused to seek damages in case of wrongful or excessive seizure.
The Defend Trade Secrets Act also authorizes the award of damages to trade secret owners consistent with the Uniform Trade Secrets Act, including enhanced damages for willful and malicious misappropriation. The bill establishes economic espionage and trade secret misappropriation as RICO predicate offenses. Furthermore, the bill does not preempt state law. Finally, the bill requires the Attorney General to report biannually on trade secret theft occurring outside of the United States.