[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 1556 Introduced in Senate (IS)]

  2d Session
                                S. 1556

To prohibit economic espionage, to provide for the protection of United 
   States proprietary economic information in interstate and foreign 
                   commerce, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            February 1, 1996

 Mr. Kohl (for himself and Mr. Specter) introduced the following bill; 
  which was read twice and referred to the Committee on the Judiciary

_______________________________________________________________________

                                 A BILL


 
To prohibit economic espionage, to provide for the protection of United 
   States proprietary economic information in interstate and foreign 
                   commerce, 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 ``Industrial Espionage Act of 1996''.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--Congress finds that--
            (1) sustaining a healthy and competitive national economy 
        is imperative;
            (2) the development and production of proprietary economic 
        information involves every aspect of interstate commerce and 
        business;
            (3) the development, production, protection, and lawful 
        exchange, sale, and transfer of proprietary economic 
        information is essential to maintaining the health and 
        competitiveness of interstate commerce and the national 
        economy;
            (4) much proprietary economic information moves in 
        interstate and foreign commerce and proprietary economic 
        information that does not move in interstate or foreign 
        commerce directly and substantially affects proprietary 
        economic information that does;
            (5) the theft, wrongful destruction or alteration, 
        misappropriation, and wrongful conversion of proprietary 
        economic information substantially affects and harms interstate 
        commerce, costing United States firms, businesses, industries, 
        and consumers millions of dollars each year; and
            (6) enforcement of existing State laws protecting 
        proprietary economic information is frustrated by the ease with 
        which stolen or wrongfully appropriated proprietary economic 
        information is transferred across State and national 
        boundaries.
    (b) Purpose.--The purpose of this Act is to promote the development 
and lawful utilization of United States proprietary economic 
information produced for, or placed in, interstate and foreign commerce 
by protecting it from theft, wrongful destruction or alteration, 
misappropriation, and conversion.

SEC. 3. PREVENTION OF ECONOMIC ESPIONAGE AND PROTECTION OF PROPRIETARY 
              ECONOMIC INFORMATION IN INTERSTATE AND FOREIGN COMMERCE.

    (a) In General.--Title 18, United States Code, is amended by 
inserting after chapter 89 the following new chapter:

      ``CHAPTER 90--PROTECTION OF PROPRIETARY ECONOMIC INFORMATION

``Sec.
``1831. Definitions.
``1832. Criminal activities affecting proprietary economic information.
``1833. Criminal forfeiture.
``1834. Import and export sanctions.
``1835. Extraterritoriality.
``1836. Construction with other laws.
``1837. Preservation of confidentiality.
``1838. Law enforcement and intelligence activities.
``Sec. 1831. Definitions
    ``As used in this chapter:
            ``(1) The term `person' means a natural person, 
        corporation, agency, association, institution, or any other 
        legal, commercial, or business entity.
            ``(2) The term `proprietary economic information' means all 
        forms and types of financial, business, scientific, technical, 
        economic, or engineering information, including, but not 
        limited to, data, plans, tools, mechanisms, compounds, 
        formulas, designs, prototypes, processes, procedures, programs, 
        codes, or commercial strategies, whether tangible or 
        intangible, and however stored, compiled, or memorialized, if--
                    ``(A) the owner has taken reasonable measures to 
                keep such information confidential; and
                    ``(B) the information derives independent economic 
                value, actual or potential, from not being generally 
                known to, and not being readily ascertainable, 
                acquired, or developed by legal means by the public.
            ``(3) The term `owner' means the United States person or 
        persons in whom, or United States Government component, 
        department, or agency in which, rightful legal, beneficial, or 
        equitable title to, or license in, proprietary economic 
        information is reposed.
            ``(4) The term `United States person' means--
                    ``(A) in the case of a natural person, a United 
                States citizen or permanent resident alien; and
                    ``(B) in the case of a nonnatural person, an entity 
                substantially owned or controlled by the United States 
                Government or by United States citizens or permanent 
                resident aliens, or incorporated in the United States.
``Sec. 1832. Criminal activities affecting proprietary economic 
              information
    ``(a) Any person, with intent to, or reason to believe that it 
will, injure any owner of proprietary economic information having a 
value of not less than $100,000 that is produced for, or placed in, 
interstate commerce, and with intent to convert it to his or her own 
direct use or benefit or the direct use or benefit of another, 
knowingly--
            ``(1) steals, wrongfully appropriates, takes, carries away, 
        or conceals, or by fraud, artifice, or deception obtains such 
        information;
            ``(2) wrongfully copies, duplicates, sketches, draws, 
        photographs, downloads, uploads, alters, destroys, photocopies, 
        or replicates such information;
            ``(3) receives, buys, or possesses such information, 
        knowing the same to have been stolen or wrongfully 
        appropriated, obtained, or converted;
            ``(4) attempts to commit any offense described in 
        paragraphs (1) through (3);
            ``(5) wrongfully solicits another to commit any offense 
        described in paragraphs (1) through (3); or
            ``(6) conspires with one or more other persons to commit 
        any offense described in paragraphs (1) through (3), and one or 
        more of such persons do any act to effect the object of the 
        conspiracy,
shall, except as provided in subsection (b), be fined not more than 
$250,000 or imprisoned not more than 15 years, or both.
    ``(b) Any corporation that commits any offense described in 
paragraphs (1) through (6) of subsection (a) shall be fined not more 
than $10,000,000.
``Sec. 1833. Criminal forfeiture
    ``(a) Notwithstanding any provision of State law, any person 
convicted of a violation under this chapter shall forfeit to the United 
States--
            ``(1) any property constituting or derived from, any 
        proceeds the person obtained, directly or indirectly, as the 
        result of such violation; and
            ``(2) 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.
    ``(b) The court, in imposing a sentence on such person, shall 
order, in addition to any other sentence imposed pursuant to this 
chapter, that the person forfeit to the United States all property 
described in this section.
    ``(c) 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 section 413 of the 
Comprehensive Drug Abuse Prevention and Control Act of 1970 (21 U.S.C. 
853), except for subsection 413(d) which shall not apply to forfeitures 
under this section.
    ``(d) Notwithstanding section 524(c) of title 28, there shall be 
deposited in the Crime Victims Fund established under section 1402 of 
the Victims of Crime Act of 1984 (42 U.S.C. 10601) all amounts from the 
forfeiture of property under this section remaining after the payment 
of expenses and sale authorized by law.
``Sec. 1834. Import and export sanctions
    ``(a) The President may prohibit for a period of up to 3 years, the 
importation into, or exportation from, the United States of any product 
produced, made, assembled, or manufactured by a person convicted of any 
offense described in section 1832.
    ``(b) The Attorney General may impose a civil penalty not to exceed 
5 times the value of the exports or imports involved or $100,000, 
whichever is greater, against any person who knowingly violates any 
order of the President issued under the authority of this section. Such 
penalty may be imposed only after notice and opportunity for a hearing 
on the record in accordance with sections 554 through 557 of title 5.
``Sec. 1835. Extraterritoriality
    ``(a) This chapter applies to conduct occurring within the United 
States.
    ``(b) This chapter applies to conduct occurring outside the 
territorial and special maritime jurisdiction of the United States, its 
territories, and possessions if--
            ``(1) the offender is a United States person; or
            ``(2) the victim of the offense is an owner (as defined in 
        section 1831), and the offense was intended to have, or had, an 
        effect in the United States.
``Sec. 1836. Construction with other laws
    ``This chapter shall not be construed to preempt or displace any 
other Federal or State remedies, whether civil or criminal, for the 
misappropriation of proprietary economic information, or to affect the 
otherwise lawful disclosure of information by any government employee 
under section 552 of title 5 (commonly known as the Freedom of 
Information Act).
``Sec. 1837. Preservation of confidentiality
    ``In any prosecution under this chapter, the court may enter such 
orders and take such other action as may be necessary and appropriate 
to preserve the confidentiality of proprietary economic information, 
consistent with rule 16 of the Federal Rules of Criminal Procedure, the 
Federal Rules of Evidence, and other applicable laws. An interlocutory 
appeal by the United States shall lie from a decision or order of a 
district court authorizing the disclosure of proprietary economic 
information.
``Sec. 1838. Law enforcement and intelligence activities
    ``This chapter does not prohibit any lawfully authorized 
investigative, protective, or intelligence activity of a law 
enforcement agency of the United States, a State, or a political 
subdivision of a State, or an intelligence agency of the United 
States.''.
    (b) Technical Amendment.--The table of chapters for title 18, 
United States Code, is amended by inserting after the item relating to 
chapter 89 the following new item:

``90. Protection of Proprietary Economic Information........    1831''.

SEC. 4. WIRE AND ELECTRONIC COMMUNICATIONS INTERCEPTION AND 
              INTERCEPTION OF ORAL COMMUNICATIONS.

    Section 2516(1)(a) of title 18, United States Code, is amended by 
inserting ``chapter 90 (relating to economic espionage and protection 
of proprietary economic information in interstate and foreign 
commerce),'' after ``title:''.
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