United States:
Back From The Dead? Senator Wants To Resuscitate Legislation To Create A Federal Right Of Action For Trade Secret Theft
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There are stirrings in the U.S. Senate of yet another bid to
establish a federal right of civil action for trade secret
misappropriation.
Sen. Chris Coons (D-Del.) has quietly circulated a draft bill to IP lawyers and others with an
interest in the legislation. The draft Protecting American
Trade Secrets and Innovation Act of 2014 ("PATSIA 2014")
is the latest of several recent attempts to bring about this right.
The past attempts include Sen. Coons' own prior iteration of
the bill, PATSIA 2012 (S. 3389), which never made it out of the
Senate Judiciary Committee.
Like the earlier version of the bill, PATSIA 2014 would allow
American trade secrets owners to sue misappropriators in federal
court for what would for the first time constitute a violation of
federal law. The bill tracks the Uniform Trade Secret Act's definitions
of "trade secret" and "misappropriation,"
includes standard remedies of damages and injunctive relief, and
enables courts to seize property involved in the commission of the
misappropriation.
PATSIA 2014 is broader than the prior version of the bill. In
the latest version, plaintiffs no longer would need to include in
their complaint "a sworn representation . . . that the dispute
involves either substantial need for nationwide service of process
or misappropriation of trade secrets from the United States to
another country," which was a significant limitation of the
prior version of the bill. Further, the bill now covers the
misappropriation of a trade secret that is "related to or
included in a product, process, or service used in, or intended for
use in, interstate or foreign commerce" (emphasis ours), as
opposed to only a "product that is produced for or placed in
interstate or foreign commerce." This language
mirrors the amendment Congress made to the Economic
Espionage Act in 2012, when it changed the EEA's definition of
misappropriation in the same way. Congress made the EEA
amendment to close a loophole created by the Second Circuit
decision United States v. Aleynikov. PATSIA
2014's definition of misappropriation is consistent with the amended EEA and keeps the loophole
closed.
We've been tracking the raft of proposed trade secrets laws
for much of the last year. Here, we update our primer to
include Coons' new bill. We've also updated the chart
to include bill numbers and links to status information via www.govtrack.us,
and to reflect what our sources on Capitol Hill tell us about the
prospects for these bills:
Bill |
Sponsor |
What's It About? |
Status |
Protecting American Trade Secrets and Innovation
Act of 2014 (draft)
|
Sen. Chris Coons
(D-Del.) |
- Would create a federal private right of civil action for
victims of economic espionage (18 USC 1831a) and the
misappropriation of trade secrets that involve interstate commerce
(18 USC 1832b).
- Available remedies would include damages, restitution,
injunctive relief, punitive damages, and attorneys' fees.
The act would also permit courts to issue ex parte seizure orders,
allowing seizure of items (such as computers) used in connection
with trade secrets theft, subject to certain procedural
requirements
- Would create an additional, non-exclusive federal remedy for
the victims of trade secret misappropriation.
|
Not
yet introduced. Senator Coons has asked interested parties
for comment on a draft. |
Future of American Innovation and Research
Act
(S. 1770)
|
Sen. Jeffry L. Flake
(R-Ariz.) |
- First introduced on November 22, 2013, the act would allow
trade secret owners to bring a civil action against a person who
misappropriates a trade secret if that person is acting either
outside of the United States or acting on behalf of a foreign
actor.
- The act would bring foreign actors within the jurisdiction of
U.S. federal courts so long as the actors engaged in conduct that
either takes place within the United States, or "causes or is
reasonably anticipated to cause an injury" within the United
States or to an American business or citizen.
- Available remedies include damages, restitution, injunctive
relief, punitive damages, and attorneys' fees. The act
would also permit courts to issue ex parte seizure orders, allowing
seizure of items (such as computers) used in connection with trade
secrets theft, subject to certain procedural requirements.
|
Referred to the Senate Judiciary Committee |
Private Right of Action Against Theft of Trade
Secrets Act of 2013
|
Rep. Zoe Lofgren(D-Cal.) |
- Introduced in the House on June 20, 2013, the bill would add a
provision to 18 U.S.C. § 1832 that creates a private cause of
action for the theft of trade secrets.
- Under this amendment, reverse engineering is explicitly not
actionable.
|
Referred to the House Committee on the
JudiciaryThe bill has no co-sponsors, so action any time soon
is unlikely. |
Aaron's Law Act of 2013
(H.R. 2454)
|
Rep. Zoe Lofgren(D-Cal.)
et al. |
|
Referred to the House Committee on the
JudiciaryLawmakers have not agreed on whether the bill's
approach is the right one, so its prospects are uncertain. |
Cyber Economic Espionage Accountability
Act
(H.R. 2281)
|
Rep. Mike Rogers (R-Mich.)
and Rep. Tim Ryan (D-Ohio) |
- Introduced June 6, 2013, the bill broadly aims to secure the
United States against cyber attacks sponsored by foreign
governments.
- The bill calls for the President to identify foreign government
officials whom the President determines, "based on credible
information," are responsible for cyber theft of United States
intellectual property.
- The bill makes the identified persons ineligible to be admitted
to the United States.
- The bill directs the Secretary of State and Secretary of
Homeland Security to revoke the visa of any such identified
person.
- The bill imposes financial sanctions, enabling the President to
freeze property transactions by the identified individuals.
|
Referred to the Foreign Affairs, Judiciary and
Financial Services CommitteesNot scheduled for any hearings at
this time; prospects uncertain. |
Deter Cyber Theft Act
(S.
884)
|
Sen. Carl Levin
(D-Mich.) et al. |
- Introduced May 7, 2013, the bill would establish a "watch
list" and "priority watch list" of countries that
facilitate or engage in cyber theft of trade secrets from the
United States.
- As we previously reported, the bill would also
require the President to direct U.S. Customs and Border Protection
to bar imports from foreign countries on the watch list.
|
Referred to the Committee on FinanceSenate is
obliged to take action first, and has not. |
Strengthening and Enhancing Cybersecurity by Using
Research, Education, Information, and Technology Act ("SECURE
IT")
(H.R. 1468)
|
Rep. Marsha Blackburn
(R-Tenn.) |
- Introduced April 10, 2013, SECURE IT seeks to, among other
things, facilitate the sharing of cyber threat information and
create new deterrents for cyber criminals.
- For instance, the act creates a limited exemption from
antitrust laws for the sharing of cyber threat information between
private entities. It further provides that an entity may disclose
cyber threat information to any entity to assist with the
investigation of threats to cybersecurity. (This portion of the
bill might face the same opposition as CISPA — see
below.)
- SECURE IT further requires that federal agencies be informed of
significant cyber incidents involving their federal information
systems and that agencies adopt technologies to detect and
remediate cyber intrusions.
- The bill aims to amend certain provisions of the Computer Fraud
and Abuse Act to include new criminal penalties for
"aggravated damage" to certain "critical
infrastructure" computers, such as those that control water
supplies, electrical power delivery, and financial
transactions.
|
Referred to the House Subcommittee on Crime,
Terrorism, Homeland Security, and InvestigationsLawmakers have
not agreed on whether the bill's approach is the right one, so
its prospects are uncertain. |
Cyber Intelligence Sharing and Protection Act
("CISPA")
(H.R. 624)
|
Rep.
Mike Rogers (R-Mich.) et al. |
- First introduced in the House on November 30, 2011, and most
recently re-introduced on February 13, 2013, the act aims to permit
information sharing about possible cybersecurity threats among
government agencies and private companies.
- CISPA has divided the House and Senate and has faced opposition
by privacy and civil liberties organizations.
|
The bill passed the House and was referred to the Senate
but has not shown signs of advancement. We reported earlier that the Senate would not
be taking up the bill and that President Obama threatened to veto
the bill because of privacy concerns. |
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