[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3723 Reported in House (RH)]





                                                 Union Calendar No. 426

104th CONGRESS

  2d Session

                               H. R. 3723

                          [Report No. 104-788]

_______________________________________________________________________

                                 A BILL

To amend title 18, United States Code, to protect proprietary economic 
                  information, and for other purposes.

_______________________________________________________________________

                           September 16, 1996

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed





                                                 Union Calendar No. 426
104th CONGRESS
  2d Session
                                H. R. 3723

                          [Report No. 104-788]

To amend title 18, United States Code, to protect proprietary economic 
                  information, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 26, 1996

  Mr. McCollum (for himself and Mr. Schumer) introduced the following 
       bill; which was referred to the Committee on the Judiciary

                           September 16, 1996

                    Additional sponsor: Mr. Hamilton

                           September 16, 1996

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]
 [For text of introduced bill, see copy of bill as introduced on June 
                               26, 1996]

_______________________________________________________________________

                                 A BILL


 
To amend title 18, United States Code, to protect proprietary economic 
                  information, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Economic Espionage Act of 1996''.

SEC. 2. PROTECTION OF TRADE SECRETS.

    (a) In General.--Chapter 31 of title 18, United States Code, is 
amended by adding at the end the following:
``Sec. 670. Protection of trade secrets
    ``(a) Offense.--Whoever--
            ``(1) with the intent to, or with reason to believe that 
        the offense will, benefit any foreign government, foreign 
        instrumentality, or foreign agent; or
            ``(2) with the intent to divert a trade secret, that is 
        related to or is included in a product that is produced for or 
        placed in interstate or foreign commerce, to the economic 
        benefit of anyone other than the owner thereof, and with the 
        intent to, or with reason to believe that the offense will, 
        disadvantage any owner of that trade secret;
wrongfully copies or otherwise controls a trade secret, or attempts or 
conspires to do so shall be punished as provided in subsection (b).
    ``(b) Punishment.--
            ``(1) Generally.--The punishment for an offense under this 
        section is--
                    ``(A) in the case of an offense under subsection 
                (a)(1), a fine under this title or imprisonment for not 
                more than 25 years, or both; and
                    ``(B) in the case of an offense under subsection 
                (a)(2), a fine under this title or imprisonment for not 
                more than 15 years.
            ``(2) Increased maximum fine for organizations.--If an 
        organization commits an offense--
                    ``(A) under subsection (a)(1), the maximum fine, if 
                not otherwise larger, that may be imposed is 
                $10,000,000; and
                    ``(B) under subsection (a)(2), the maximum fine, if 
                not otherwise larger, that may be imposed is 
                $5,000,000.
    ``(c) Definitions.--As used in this section--
            ``(1) the term `foreign instrumentality' means any agency, 
        bureau, ministry, component, institution, association, or any 
        legal, commercial, or business organization, corporation, firm, 
        or entity that is substantially owned, controlled, sponsored, 
        commanded, managed, or dominated by a foreign government;
            ``(2) the term `foreign agent' means any officer, employee, 
        proxy, servant, delegate, or representative of a foreign 
        government;
            ``(3) the term `trade secret' means all forms and types of 
        financial, business, scientific, technical, economic, or 
        engineering information, including patterns, plans, 
        compilations, program devices, formulas, designs, prototypes, 
methods, techniques, processes, procedures, programs, or codes, whether 
tangible or intangible, and whether or how stored, compiled, or 
memorialized physically, electronically, graphically, photographically, 
or in writing if--
                    ``(A) the owner thereof has taken reasonable 
                measures to keep such information secret; and
                    ``(B) the information derives independent economic 
                value, actual or potential, from not being generally 
                known to, and not being readily ascertainable through 
                proper means by, the public; and
            ``(4) the term `owner', with respect to a trade secret, 
        means the person or entity in whom or in which rightful legal 
        or equitable title to, or license in, the trade secret is 
        reposed.
    ``(d) Criminal Forfeiture.--
            ``(1) Notwithstanding any other provision of State law, any 
        person convicted of a violation under this section shall 
        forfeit to the United States--
                    ``(A) any property constituting, or derived from, 
                any proceeds the person obtained, directly or 
                indirectly, as the result of such violation; and
                    ``(B) any of the person's property used, or 
                intended to be used, in any manner or part, to commit 
                or facilitate the commission of such violation, if the 
                court in its discretion so determines, taking into 
                consideration the nature, scope, and proportionality of 
                the use of the property in the offense.
            ``(2) The court, in imposing sentence on such person, shall 
        order, in addition to any other sentence imposed pursuant to 
        this section, that the person forfeit to the United States all 
        property described in this section.
            ``(3) Property subject to forfeiture under this section, 
        any seizure and disposition thereof, and any administrative or 
        judicial proceeding in relation thereto, shall be governed by 
        the provisions of section 413 of the Comprehensive Drug Abuse 
        Prevention and Control Act of 1970 (21 U.S.C. 853), except for 
        subsections (d) and (j) of such section, which shall not apply 
        to forfeitures under this section.
    ``(e) Orders To Preserve Confidentiality.--In any prosecution or 
other proceeding under this section, the court shall enter such orders 
and take such other action as may be necessary and appropriate to 
preserve the confidentiality of trade secrets, consistent with the 
requirements of the Federal Rules of Criminal and Civil Procedure, the 
Federal Rules of Evidence, and all other applicable laws. An 
interlocutory appeal by the United States shall lie from a decision or 
order of a district court authorizing or directing the disclosure of 
any trade secret.
    ``(f) Civil Proceedings to Enjoin Violations.--
            ``(1) Generally.--The Attorney General may, in a civil 
        action, obtain appropriate injunctive relief against any 
        violation of this section.
            ``(2) Exclusive Jurisdiction.--The district courts of the 
        United States shall have exclusive original jurisdiction of 
        civil actions under this subsection.
    ``(g) Territorial Application.--
            ``(1) This section applies to conduct occurring within the 
        United States.
            ``(2) This section also applies to conduct occurring 
        outside the United States if--
                    ``(A) the offender is--
                            ``(i) a United States citizen or permanent 
                        resident alien; or
                            ``(ii) an organization substantially owned 
                        or controlled by United States citizens or 
                        permanent resident aliens, or incorporated in 
                        the United States; or
                    ``(B) an act in furtherance of the offense was 
                committed in the United States.
    ``(h) Nonpreemption of Other Remedies.--This section shall not be 
construed to preempt or displace any other remedies, whether civil or 
criminal, provided by United States Federal, State, commonwealth, 
possession, or territory law for the misappropriation of a trade 
secret.
    ``(i) Exceptions to Prohibition.--
            ``(1) This section does not prohibit and shall not impair 
        any otherwise lawful activity conducted by an agency or 
        instrumentality of the United States, a State, or a political 
        subdivision of a State.
            ``(2) This section does not prohibit the reporting of any 
        suspected criminal activity to any law enforcement agency or 
        instrumentality of the United States, a State, or a political 
        subdivision of a State, to any intelligence agency of the 
        United States, or to Congress.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
chapter 31, United States Code, is amended by adding at the end the 
following new item:

``670. Protection of trade secrets.''.

SEC. 3. WIRE AND ELECTRONIC COMMUNICATIONS INTERCEPTION AND 
              INTERCEPTION OF ORAL COMMUNICATIONS.

Section 2516(1)(c) of title 18, United States Code, is amended by 
inserting ``section 670 (relating to economic espionage),'' after 
``(bribery in sporting contests),''.