II 112th CONGRESS 2d Session S. 3389 IN THE SENATE OF THE UNITED STATES July 17, 2012 Mr. Kohl (for himself, Mr. Coons, and Mr. Whitehouse) introduced the following bill; which was read twice and referred to the Committee on the Judiciary A BILL To modify chapter 90 of title 18, United States Code, to provide Federal jurisdiction for theft of trade secrets.

1.

Short title

This Act may be cited as the Protecting American Trade Secrets and Innovation Act of 2012.

2.

Federal jurisdiction for theft of trade secrets

(a)

In general

Section 1836 of title 18, United States Code, is amended to read as follows:

1836.

Civil proceedings

(a)

Private civil actions

(1)

In general

A person may bring a civil action under this subsection if the person is aggrieved by— (A)a violation of section 1831(a) or 1832(a); or (B)a misappropriation of a trade secret that is related to or included in a product that is produced for or placed in interstate or foreign commerce. (2)

Pleadings

A complaint filed in a civil action brought under this subsection shall— (A)describe with specificity the reasonable measures taken to protect the secrecy of the alleged trade secrets in dispute; and (B)include a sworn representation by the party asserting the claim that the dispute involves either substantial need for nationwide service of process or misappropriation of trade secrets from the United States to another country. (3)

Civil ex parte seizure order

(A)

In general

In a civil action brought under this subsection, the court may, upon ex parte application and if the court finds by clear and convincing evidence that issuing the order is necessary to prevent irreparable harm, issue an order providing for— (i)the seizure of any property (including computers) used or intended to be used, in any manner or part, to commit or facilitate the commission of the violation alleged in the civil action; and (ii)the preservation of evidence in the civil action. (B)

Scope of orders

An order issued under subparagraph (A) shall— (i)authorize the retention of the seized property for a reasonably limited period, not to exceed 72 hours under the initial order, which may be extended by the court after notice to the affected party and an opportunity to be heard; (ii)require that any copies of seized property made by the requesting party be made at the expense of the requesting party; (iii)require the requesting party to return the seized property to the party from which the property were seized at the end of the period authorized under clause (i), including any extension; and (iv)include an appropriate protective order with respect to discovery and use of any property that has been seized, which shall provide for appropriate procedures to ensure that confidential, private, proprietary, or privileged information contained in the seized property is not improperly disclosed or used. (C)

Seizures

A party injured by a seizure under an order under this paragraph— (i)may bring a civil action against the applicant for the order; and (ii)shall be entitled to recover appropriate relief, including— (I)damages for lost profits, cost of materials, and loss of good will; (II)if the seizure was sought in bad faith, punitive damages; and (III)unless the court finds extenuating circumstances, to recover a reasonable attorney’s fee. (4)

Remedies

In a civil action brought under this subsection, a court may— (A)issue— (i)an order for appropriate injunctive relief against any violation described in paragraph (1), including the actual or threatened misappropriation of trade secrets; (ii)if determined appropriate by the court, an order requiring affirmative actions to be taken to protect a trade secret; and (iii)if the court determines that it would be unreasonable to prohibit use of a trade secret, an order requiring payment of a reasonable royalty for any use of the trade secret; (B)award— (i)damages for actual loss caused by the misappropriation of a trade secret; and (ii)damages for any unjust enrichment caused by the misappropriation of the trade secret that is not addressed in computing damages for actual loss; (C)if the trade secret described in paragraph (1)(B) is willfully or maliciously misappropriated, award exemplary damages in an amount not more than the amount of the damages awarded under subparagraph (B); and (D)if a claim of misappropriation is made in bad faith, a motion to terminate an injunction is made or opposed in bad faith, or a trade secret is willfully and maliciously misappropriated, award reasonable attorney's fees to the prevailing party. (b)

Jurisdiction

The district courts of the United States shall have original jurisdiction of civil actions brought under this section. (c)

Period of limitations

A civil action under this section may not be commenced later than 3 years after the date on which the misappropriation is discovered or by the exercise of reasonable diligence should have been discovered. For purposes of this subsection, a continuing misappropriation constitutes a single claim of misappropriation.

. (b)

Definitions

Section 1839 of title 18, United States Code, is amended— (1)in paragraph (3), by striking and at the end; (2)in paragraph (4), by striking the period at the end and inserting a semicolon; and (3)by adding at the end the following: (5)the term misappropriation means— (A)acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means; or (B)disclosure or use of a trade secret of another without express or implied consent by a person who— (i)used improper means to acquire knowledge of the trade secret; (ii)at the time of disclosure or use, knew or had reason to know that the knowledge of the trade secret was— (I)derived from or through a person who had used improper means to acquire the trade secret; (II)acquired under cir­cum­stances giving rise to a duty to maintain the secrecy of the trade secret or limit the use of the trade secret; or (III)derived from or through a person who owed a duty to the person seeking relief to maintain the secrecy of the trade secret or limit the use of the trade secret; or (iii)before a material change of the position of the person, knew or had reason to know that— (I)the trade secret was a trade secret; and (II)knowledge of the trade secret had been acquired by accident or mistake; and (6)the term improper means— (A)includes theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means; and (B)does not include reverse engineering or independent derivation. . (c)

Technical and conforming amendment

The table of sections for chapter 90 of title 18, United States Code, is amended by striking the item relating to section 1836 and inserting the following: 1836. Civil proceedings. . (d)

Rule of construction

Nothing in the amendments made by this section shall be construed to modify the rule of construction under section 1838 of title 18, United States Code, or to preempt any other provision of law.