[Congressional Record Volume 162, Number 50 (Monday, April 4, 2016)]
[Senate]
[Pages S1626-S1631]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
DEFEND TRADE SECRETS BILL
Mr. HATCH. Mr. President, later this evening, the Senate will vote on
the Defend Trade Secrets Act, a bill that will enable U.S. businesses
to protect their trade secrets in Federal court. Senator Chris Coons
and I have been working on this legislation in a bipartisan way for
nearly 2 years, so it is really satisfying to see the Senate poised to
vote on this important bill.
To date, the legislation has 65 bipartisan cosponsors, including the
distinguished Senate Judiciary Committee chairman, Chuck Grassley, and
ranking member, the distinguished Senator Pat Leahy. I appreciate their
support for this bill.
I also commend our House colleagues, Representatives Doug Collins and
Jerrold Nadler, for their tireless efforts--and others over there as
well. They have been invaluable partners in advancing this legislation
in the House of Representatives. Working under the capable leadership
of my dear friend, House Judiciary Committee Chairman
[[Page S1627]]
Bob Goodlatte, we have come together to right an inequity facing U.S.
businesses by creating a civil remedy for trade secret
misappropriation.
Trade secrets--such as customer lists, formulas, algorithms, software
codes, unique designs, industrial techniques, and manufacturing
processes--are an essential form of intellectual property. Other forms
of intellectual property, such as patents, copyrights, and trademarks,
are covered by Federal civil law. Trade secrets, by contrast, are the
only form of U.S. intellectual property where the owner does not have
access to a Federal civil remedy for misuse or misappropriation. As a
result, billions of dollars each year are lost to trade secret theft,
which stifles innovation by deterring companies from investing in
research and development.
Currently, the only Federal vehicle for trade secret protection is
the 1996 Economic Espionage Act, which makes trade secret theft by
foreign nationals a criminal offense. But this remedy criminalizes only
a small subset of trade secret theft and relies on the thinly stretched
resources of the Department of Justice to investigate and prosecute
such offenses.
One experienced trade secret practitioner told me recently that the
Justice Department typically only considers prosecuting cases with more
than $100,000 in damages. This is because trade secret investigations
and prosecutions are more resource intensive and complex than most
other Federal crimes, requiring a deep technological and scientific
background. Given these constraints, the Justice Department and the FBI
are reluctant to commit scarce resources to investigate and prosecute a
single matter, especially when the same effort could result in the
prosecution and conviction of other Federal crimes.
Therefore, it is not surprising that in the 20 years since the
Economic Espionage Act became law, Federal prosecutors have charged
only about 300 defendants for economic espionage or trade secret theft.
And because these cases frequently involve multiple defendants, this
equates to an average of about 10 prosecutions annually. Clearly,
current Federal law is inadequate in resolving the many challenges our
businesses face in today's innovation economy.
State laws have proven inadequate to protect victims of trade secret
theft. Since most businesses today operate across one or more State
lines, having a uniform set of standards that defines legal protections
for trade secrets is crucial. That was the rationale behind creating
the Uniform Trade Secrets Act, which sought to achieve nationwide
uniformity in trade secret law. But over time, most States have adopted
their own trade secret laws. In fact, State laws today are perhaps even
more variable in their treatment of trade secrets than they were at the
time the Uniform Trade Secrets Act was proposed in 1979. This next
mixed bag of differing legal regimes forces victims of trade secret
theft to wade through a quagmire of procedural hurdles in order to
recover their losses.
For example, if an attorney needs testimony from a witness in another
State, she must first apply to her local court, asking that it request
the other State to issue its own subpoena for the document or
deposition. This process can take weeks, which is an eternity in a
trade secret case. Under a uniform Federal standard, the process would
be far more efficient. That is because all Federal courts apply the
Federal Rules of Civil Procedure, allowing attorneys to obtain
documents and testimony from a witness in another State without having
to apply to that State's court system. Essentially, enabling businesses
to protect their trade secrets in Federal court removes an unnecessary
and time-consuming layer of bureaucracy.
Streamlining access to remedies is critical in trade secret cases
where an expedited judicial process may be necessary to deal with
thieves who pose a flight risk. Unfortunately, once a company's
intellectual property is leaked and the information is made public, the
trade secret loses its legal protection.
Put simply, State law is designed for intrastate litigation and
offers limited practical recourse to victims of interstate trade secret
theft--the contrast between intrastate and interstate. Maintaining the
status quo is woefully insufficient to safeguard against
misappropriation. U.S. companies must be able to protect their trade
secrets in Federal court.
The Defend Trade Secrets Act will do precisely that by providing
trade secret owners access to both a uniform national law and the
ability to make their case in Federal courts. Likewise, the bill allows
victims of trade secret theft to obtain a seizure order in
extraordinary circumstances. This type of order would allow
misappropriated property to be seized so that it isn't abused during
the pendency of litigation. To ensure that companies do not use the
seizure authority for anti-competitive purposes, this legislation
requires those seeking redress to make a rigorous showing that they own
the trade secret, that the trade secret was stolen, and that third
parties would not be harmed if an ex parte order were granted. The bill
also allows for employees to move from one job to another without fear
of being wrongfully charged with trade secret theft.
In addition to the overwhelming bipartisan support among my Senate
colleagues, more than 50 companies and associations have endorsed the
Defend Trade Secrets Act. Leaders in the technology, life sciences,
manufacturing, energy, automotive, agricultural, and telecommunications
sectors support this bill, among others.
Many letters and opinion pieces have been written in support of the
bill. Let me briefly share some of the comments from our Nation's
business leaders.
In an op-ed published in The Hill, Aric Newhouse from the National
Association of Manufacturers states, ``The [Defend Trade Secrets Act]
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.''
In a piece published by the Washington Times, David Hirschmann from
the U.S. Chamber of Commerce writes, ``The Defend Trade Secrets Act
creates a federal civil cause of action that currently does not exist.
Creating a new federal civil cause of action will help industry help
itself.''
In an op-ed in the Washington Examiner, Mark Lauroesch from the
Intellectual Property Owners Association writes, ``Every day without
this law, our companies are losing millions of dollars to trade secret
theft.''
Victoria Espinel from the BSA Software Alliance writes in the
Huffington Post, ``The Defend Trade Secrets Act would provide that
important, missing remedy, and help usher in the harmonized system that
will benefit not only software innovation but our entire American
economy.''
Guy Blalock from Utah's IM Flash writes in the Salt Lake Tribune,
``Enacting the bill will have an immediate, positive impact on
innovative companies that create jobs in this country.''
In a joint op-ed published in the Salt Lake Tribune, Rich Nelson from
the Utah Technology Council and Lane Beattie from the Salt Lake Chamber
of Commerce write that the Defend Trade Secrets Act ``equips business
owners with the tools they need to combat trade secret theft.''
Finally, Eli Lilly's Michael Harrington and Microsoft's Erich
Andersen in an op-ed published in Forbes write, ``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.''
Mr. President, I ask unanimous consent to have printed in the Record
the op-eds from which I have quoted following my remarks.
Throughout my 40 years of service, I have been a part of almost every
significant intellectual property initiative that has come before the
Senate--from the Digital Millennium Copyright Act, which sought to
streamline our copyright system for the digital era, to the America
Invents Act, which overhauled our patent system to help ensure American
innovators' property rights are adequately protected in the 21st
century.
Legislating in the area of intellectual property requires patience
and perseverance. The bill on which we are voting tonight has been 2
years in the making. Initially, providing a Federal standard and civil
remedies for trade secrets had little support. It took much effort not
only to identify the precise nature of the problem--a problem that
[[Page S1628]]
amounts to hundreds of billions of dollars in economic loss for U.S.
companies annually--but also to develop a solution that could garner
the support of virtually all stakeholders. This required soliciting
input from a broad range of interests and working closely with dozens
of trade associations, affected businesses, and policymakers on both
sides of the aisle. The final version of the legislation that the
Senate will pass later this evening reflects input and additions from a
broad coalition of interested parties.
It also reflects a number of instances where a careful balance had to
be struck between competing interests. As has been true of several
recent intellectual property efforts, the interests of the technology
sector and the pharmaceutical industry are not always aligned. The same
was true when it came to trade secrets. Yet we worked hard to develop a
solution that could meet the needs of both. This balance is perhaps
best exemplified by the joint op-ed I mentioned a moment ago,
coauthored by the general counsel of one of America's leading
pharmaceutical companies and a senior executive from one of America's
prominent tech companies.
As chairman of the Senate Republican High-Tech Task Force and
coauthor of the Hatch-Waxman Act, I know how critical it is to strike
the right balance such that both high-tech and life science industries
can support a bill. We have struck that balance with the Defend Trade
Secrets Act.
Not only will we succeed in defending the trade secrets of American
businesses, I hope the passage of the bill will serve as a springboard
to spur congressional action in other areas of intellectual property,
including patent litigation reforms. I commend in particular House
Judiciary Committee Chairman Bob Goodlatte for his steadfast work in
this regard, and I stand ready to do everything in my power to help him
in this endeavor.
Tonight's passage of fundamental trade secret law reform would be a
significant achievement at any time, let alone in the challenging
partisan environment we face today. Indeed, today's Senate vote is not
only a watershed moment for the intellectual property and business
communities; it is also an example of what Congress can accomplish when
we put our party politics aside and focus on areas of agreement.
Throughout my Senate service, I have always sought, whenever possible,
to seek common ground in order to advance public policy priorities that
will benefit the American people and the American economy. With this
bill, we have done just that.
I want to thank Senate Majority Leader Mitch McConnell for leading
the Senate in such a way to make constructive bipartisan legislating
possible. I appreciate his support for this legislation and his
willingness to devote valuable floor time to help ensure its passage.
Tonight we will add the Defend Trade Secrets Act to a long list of
legislation the Senate has passed in the last 15 months since the
senior Senator from Kentucky assumed leadership of the U.S. Senate.
This is yet another example that the Senate is back to work for the
American people.
I also want to take this moment to thank the staff members who have
been instrumental in getting us to this point. Let me start by thanking
my senior judiciary counsel, Matt Sandgren, whose relentless
determination helped make tonight a reality. I also thank my chief of
staff, Rob Porter, for his unmatchable leadership in shepherding this
bill forward. Together, Matt and Rob have been an invincible team,
working hand in glove throughout this process. I personally appreciate
their excellent work.
I also recognize my superb press team for their efforts, J.P. Freire,
Matt Whitlock, and Sam Lyman. I am also appreciative of my dedicated
law clerks, Ryan Karr and Jaclyn D'Esposito.
I also acknowledge the important contributions of Senator Coons'
current and former staff: Ted Schroeder, Andrew Crawford, Erica Songer,
and Jonathan Stahler.
There are also several staff on the Senate Judiciary Committee who
have been instrumental in helping with this key intellectual property
bill: Rita Lari Jochum, Jonathan Nabavi, Alexandra Givens, Danielle
Cutrona, Eric Haren, Lee Holmes, Lartease Tiffith, Gary Barnett, Daniel
Swanson, Ray Starling, Ethan Arenson, Chad Rhoades, and Sam Simon.
I also acknowledge the following House staff for their hard work and
commitment to this bill: Shelley Husband, Branden Ritchie, Jennifer
Choudhry, Sally Larson, Jason Everett, and David Greengrass.
Finally, I thank the many staff members from majority leader Mitch
McConnell and minority leader Harry Reid who helped to make this bill's
passage a reality. I wish to especially thank Laura Dove, Sharon
Soderstrom, Hazen Marshall, John Abegg, Chris Tuck, and Ayesha Khanna.
Enacting meaningful public policy reform in the midst of a
contentious Presidential election is something to celebrate. In very
real ways, this bill will help strengthen our economy and allow
businesses to grow and create additional jobs for hard-working
Americans. I hope my colleagues will join me in safeguarding American
ingenuity by voting for the Defend Trade Secrets Act. They will not be
sorry by doing that.
I understand Senator Coons is here, and I want to recognize him and
all the work he has done with me on this bill. He is a wonderful
partner on the Judiciary Committee, and I personally appreciate him
very much.
With that, I yield the floor.
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From The Hill, Mar. 10, 2016]
US Manufacturers to Congress: Keep Us Competitive, Pass Trade Secrets
Legislation
(By Aric Newhouse)
Trade secrets, an essential form of intellectual property,
are among the most valued business assets for manufacturers.
They can include everything from the special recipe for a
food or beverage to the formula for a chemical or
pharmaceutical. This proprietary information powers the
innovation on a shop floor, which drives job creation at
facilities in communities across our country.
Trade secrets can comprise as much as 80 percent of the
value of a company's knowledge portfolio, and according to
one estimate, theft costs businesses in this country some
$250 billion a year. The current system desperately needs to
be updated to provide the owners of trade secrets the ability
to pursue intellectual property thieves aggressively and
efficiently, in full cooperation with the federal government.
While patent, copyright and trademark owners can protect
their rights in federal court, trade secret owners must
instead rely on an array of state law remedies that were
designed with small-scale, intrastate theft in mind. Although
those laws may be sufficient and appropriate when, for
example, an employee takes a former employer's customer list
to a competitor down the street, they are ill-suited for the
fast-moving, multijurisdictional cases in today's global
economy.
Fortunately, there is important, bipartisan legislation
that would fill this gap and assist manufacturers in pursuing
trade secret thieves and protecting intellectual property.
The Defend Trade Secrets Act of 2016 (DTSA)--a bipartisan,
bicameral bill led by Sens. Orrin Hatch (R-Utah) and Chris
Coons (D-Del.) and Reps. Doug Collins (R-Ga.) and Jerrold
Nadler (D-N.Y.)--creates a federal civil cause of action for
trade secret misappropriation to unify trade secrets law
nationwide. The bill would also offer trade secrets owners
the same legal options as owners of other forms of
intellectual property.
The National Association of Manufacturers has long
supported a federal civil remedy for trade secret theft and
urges passage of DTSA. The consensus-oriented approach of the
legislation has drawn strong support from all industry groups
and manufacturing subsectors, including biotech,
pharmaceutical, medical device, automotive, agriculture and
beyond.
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.
____
[From the Washington Times, Mar. 17, 2016]
Protecting American Intellectual Property
(By David Hirschmann)
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,
[[Page S1629]]
American companies are at the forefront of the ``innovation
economy'' and the creators of millions of domestic jobs.
But our position as a global leader in innovation is under
attack. Individuals, organizations and even some countries,
want to take shortcuts and gain a competitive edge by
stealing our ideas and manufacturing know-how--the ``secret-
sauce'' that separates American industry from those who seek
to duplicate our success. This theft of America's trade
secrets is a growing--and increasingly alarming--threat to
our economic security.
What separates a Coca-Cola from a store-brand counterpart
is its secret formula, and Kentucky Fried Chicken relies on
its unique blend of 11 herbs and spices to distinguish itself
in the market. Both are examples of trade secrets.
But trade secrets are also used to designate propriety
manufacturing processes or highly technical algorithms for
biologic formulas that may one day be eligible for patent
protections. This form of intellectual property (IP)
encompasses a wide range of information and processes across
virtually every industry sector and among companies large and
small.
Trade secrets are often the crown-jewels of a small,
innovative start-up that has neither the expertise nor budget
to seek patent protection because their limited capital is
spent developing the next big idea and putting people to work
building the next must-have product.
The Defend Trade Secrets Act currently under consideration
in Congress would give American companies another tool to
fight trade secrets theft.
This is a rare piece of legislation with broad and diverse
support. Introduced by Sens. Orrin Hatch, Utah Republican and
Chris Coons, Delaware Democrat, and Reps. Chris Collins, New
York Republican and Jerrold Nadler, New York Democrat this is
a truly bipartisan and bicameral bill. Currently, the bill
enjoys the support of 62 senators and 127 representatives,
along with thousands of companies, industry associations, and
think tanks.
As well stated by White House Intellectual Property
Enforcement Coordinator Daniel Marti, ``Trade secret theft is
a serious and pervasive problem that threatens the economic
health and competitiveness of this country. The
Administration is committed to protecting the innovation
which drives the American economy and supports American
jobs.''
Examples include foreign nationals digging new hybrid seeds
out of cornfields in the heartland, embedded employees
walking out the door with proprietary manufacturing
processes, and hackers downloading secret research data. Once
in possession of the trade secret, criminals want to get out
of Dodge fast, and will typically flee the country to peddle
these precious corporate assets to the highest bidder. To
stop such theft, companies must be able to act quickly and
effectively.
Unfortunately, current remedies alone are not enough to
prevent the flight of these thieves. While law enforcement is
a willing partner and often very helpful, too often they lack
the bandwidth or resources to act quickly enough and stop
these criminals before it's too late.
Currently, a patchwork of state laws and federal criminal
penalties are available to companies or individuals
confronted with trade secrets theft. The Defend Trade Secrets
Act creates a federal civil cause of action that currently
does not exist.
Creating a new federal civil cause of action will help
industry help itself. The bill has many provisions to make
sure that this new federal cause of action is not abused and
employees are protected--including whistleblowers.
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.
____
[From Forbes, Apr. 4, 2016]
We Need To Safeguard the Secrets of America's Innovation Economy
(By Michael Harrington and Erich Andersen)
America has long been recognized as a world leader in
innovation. Not only does the unending flow of new inventions
make life better for consumers, it also helps create new jobs
and opportunities for millions of American families. The
``intellectual property'' associated with American innovation
is protected by a network of laws, including patents,
copyrights, trademarks and trade secrets. These legal
protections are essential to reward innovation and encourage
continued investment in American research and development.
Unfortunately, trade secrets are the only form of
intellectual property that do not receive robust federal
protection. This needs to change.
Trade secrets include secret formulas, customer lists and
methods of manufacturing developed at great expense and that
have significant value to companies, which take steps to
ensure their confidentiality. American businesses, regardless
of size, must be able to continue to invest the enormous
resources required to develop the products of the future,
from the latest in cloud computing and artificial
intelligence to the next generation of life-saving medicines.
The Defend Trade Secrets Act, bipartisan legislation pending
before the Senate and House, would provide 21st century
protection for America's trade secrets. It has the strong
support of our companies and scores of others representing a
diverse cross section of industries.
In the digitally networked world, the need for robust trade
secret protection has only increased. Businesses no longer
compete against the company across the street--they sell
products across the country and around the world. Gone are
the days when a business kept its know-how on paper--its
business plans, its manufacturing process, the secret sauce
that gave the business a competitive edge--and locked it in a
desk drawer or a safe. Today, companies store their data and
business-critical information electronically, primarily in
the cloud. Decentralization has allowed companies to rely on
networks of manufacturers and service providers who must all
be able to access, use and store this trade secret
information. The ability to share secrets confidentially with
such providers, with the knowledge they can be protected, is
vital to the continuing growth of the American economy. While
digitalization of information has facilitated the access to
trade secrets essential to the conduct of business, it has
also enabled anyone intent on doing harm to purloin vast
amounts of information with no more than a computer key
stroke to a thumb drive or the cloud.
Trade secrets are also unique among forms of intellectual
property in how they are legally protected. They are governed
under state law rather than by federal statute. That is,
although it is a federal crime to steal a trade secret, a
business that has its trade secrets stolen must rely on state
law to pursue a civil remedy. Owners of copyrights, patents,
and trademarks can go to federal court to protect their
property and seek damages when their property has been
infringed, but trade secret owners do not have access to such
a federal remedy. This can prove unwieldy and ineffective
when the trade secret thief crosses state lines--and all too
often these thieves are ultimately heading overseas so that
the unscrupulous can unfairly exploit and profit from the
fruits of American know how in the global economy. This can
result in significant loss of American prosperity and jobs.
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.
The PRESIDING OFFICER (Mr. Coats). The Senator from Delaware.
Mr. COONS. Mr. President, I begin my remarks by thanking my
colleague, good friend, and the leader in this effort to pass the
Defend Trade Secrets Act in the Senate today, the President pro tem of
the Senate, Senator Orrin Hatch. In his four decades of service in this
body, Senator Hatch has become well known for his ability and
willingness to work across the aisle, to be a genuine leader in
intellectual property matters, and to fight tirelessly for America's
inventors and inventions. I am grateful for the small role I have been
able to play in partnering with Senator Hatch to bring this important
piece of legislation through the Judiciary Committee and to the floor
today.
Our country has long been the unquestioned world leader in the
creation and production of innovative ideas. Simply put, for over two
centuries we understood the critical connection between preserving
intellectual property rights and creating sustained economic growth. As
a result, we are second to none when it comes to innovation. Yet a
critical form of IP, intellectual property, has somehow slipped through
the cracks of Federal protection. Of course, I am talking about trade
secrets, such as the secret formula for Coca-Cola, Kentucky Fried
Chicken, customer lists, pricing strategies, and key stages in a vital
manufacturing process. They are the lifeblood of great companies that
can lead to the creation of products that make a company unique and
uniquely profitable. It should come as no surprise that they are a
major contributor to our economy. By some estimates, trade secrets are
worth $5 trillion to publicly listed American companies alone.
Despite the importance of trade secrets to our economy and our
innovation ecosystem, trade secrets remain
[[Page S1630]]
the only form of intellectual property not protected from theft under
Federal civil law. More specifically, a misuse of trade secrets doesn't
provide the owner with a Federal private right of action to seek
redress. This means companies today have to rely on State courts or on
Federal prosecutors to protect their rights. The multi-State procedural
and jurisdictional issues and the hurdles you have to clear that arise
in such cases are oftentimes intensive, costly, and complicated.
Meanwhile, the Department of Justice, currently empowered to protect
trade secrets on the Federal level, lacks the resources to prosecute
many of the cases that arise. By the time the existing protections
catch up with bad actors who have taken off with a customer list,
formula, or recipe, it is often too late. Unlike physical goods, you
simply can't take back trade secrets once they have been shared with
the public. Once a trade secret is no longer secret, it loses its legal
protection.
This glaring oversight in our Federal legal system has become
increasingly problematic in recent years as technology has made it
easier and easier to steal trade secrets. Today a foreign competitor
can steal a vital trade secret from an American manufacturer with just
a few key strokes through a cyber attack. This hasn't gone unnoticed.
The rate of cyber trade secret theft is at an alltime high, and our
foreign competitors are stealing American innovation with woefully
inadequate repercussions. This uptick and steady rise in trade secret
theft is affecting American businesses large and small across our
country. Today the misappropriation of trade secrets is estimated to
cost American companies between $160 and $480 billion annually. That
money would be so much better spent by investing in new products,
growing businesses, and creating jobs.
For example, my home State of Delaware has felt the impact of trade
secret theft. Many are familiar with DuPont's signature product Kevlar,
an extraordinarily strong and lightweight synthetic fiber that is best
known for its use in lifesaving body armor. It is worn by dedicated
police officers and the brave men and women in our Armed Forces. It has
literally saved thousands of lives, including more than 3,000 law
enforcement officers across this country.
About 10 years ago, DuPont developed a next generation of Kevlar,
which was even lighter and better able to withstand penetrating trauma
from a wide range of rifle rounds or IED-generated shrapnel. This
technology represented a real breakthrough in safety, but it cost
millions upon millions to develop. You see, chemically the spun
polyaromatic fibers that make up Kevlar are not that complicated, but
the fabrication and production method that give the fiber strength and
flexibility is incredibly difficult to develop and then execute.
One day about 6 years ago--just 4 years after DuPont had developed
this next-generation protective technology--a rogue employee took the
trade secrets and the know-how behind manufacturing this new product
and went and gave it to a rival manufacturing company in Korea by using
DuPont's trade secrets. The potential loss to DuPont from this one
instance of trade secret theft cost roughly $1 billion.
Not only does trade secret theft cost American businesses revenue,
which puts American jobs at risk, but it also discourages businesses
from investing in critical research and development, and of all the
sectors in the American economy, trade secrets are most central for
manufacturing and for manufacturing in advanced materials. If you know
an employee can steal your company's trade secret, potentially
resulting in a loss of up to $1 billion, that trade secret that was the
product of years of research and development, as was the case for
DuPont with their next-generation Kevlar, it becomes harder and harder
to justify investing substantial sums in the R&D needed to continue to
produce technological breakthroughs and cutting-edge manufacturing in
the United States.
This trade secret theft can have a devastating, long-term impact on
our country's ability to innovate and compete. It is also of particular
concern in my home State of Delaware, where R&D is critical to our
economy and sustaining our manufacturing sector. These protections in
today's Defend Trade Secrets Act will only grow in importance as our
country continues to cultivate advanced manufacturing.
Delaware has a proud legacy of encouraging cutting-edge science. We
are home to hundreds of basement inventors who have tinkered, designed,
and perfected inventions. Some have become well known internationally,
such as Kevlar, and others are not as well known but are critical to
our economy. That is why I introduced, along with my friend and senior
colleague Senator Hatch, the Defend Trade Secrets Act. This bill
creates a new Federal private right of action for the misappropriation
of trade secrets. It uses an existing Federal criminal law, the
Economic Espionage Act, to define trade secrets, and it draws heavily
from the existing Uniform Trade Secrets Act which has been enacted by
many States to define misappropriation.
Simply put, our bill will harmonize U.S. law. Each State has a
slightly different trade secret law, and they vary in many different
ways. Not all of these differences are major, but they affect the
definition of what a trade secret is or what an owner must do to keep a
secret or what constitutes misappropriation or what damages and
remedies are available.
Our Defend Trade Secrets Act creates a single national baseline, or a
minimal level of protection, and gives trade secret owners access to
both a uniform national law and to the reach of Federal courts, which
provide nationwide service of process and execution of judgments.
However, it is important to know this bill does not preempt State law
because States are, of course, free to continue to add further
protections.
In my view, this bill is a commonsense solution to a very serious
problem. Senator Hatch and I first introduced this bill in April of
2014, and we reintroduced it last July with just four original
cosponsors. The bill before us today now has 65 bipartisan cosponsors
in the Senate. An identical version in the House, introduced by Doug
Collins of Georgia and Jerry Nadler of New York, now has 128
cosponsors. Congressmen Collins and Nadler have been great partners in
this effort. Congressman John Conyers has also provided invaluable
support.
In addition to the broad bipartisan support we have collected on this
bill from our colleagues, we have gained endorsements from dozens and
dozens of companies as diverse as Boeing, Corning, Microsoft, and
DuPont. I believe it is also a testament to the hard work and esteem in
which Senator Hatch is held by his colleagues. Senator Hatch has long
been a leader in intellectual property and has been able to lead a
successful, open, and collaborative process that has allowed us to move
the bill to this point today.
Many of our colleagues, Republicans and Democrats, had suggestions
for ways to improve the original draft. I am proud many of the Senators
who originally raised concerns or questions have now become cosponsors
of the bill as a result of Senator Hatch's leadership and our
collaboration.
In today's political climate, it is easy to forget that to get things
done, we don't have to agree on everything, we just have to agree on
one thing. In this case, we have all agreed that losing hundreds of
billions of dollars annually to trade secret theft and misappropriation
has been hurting American businesses and our economy.
This bill is truly bipartisan. Frankly, it has united industry,
practitioners, and Members of this body in a way we don't see often
enough today. I rarely have an opportunity to work closely with the
Heritage Foundation, the National Association of Manufacturers, and
intellectual property owners on the same bill, but good policy can make
for unique partnerships. With the bill before us today, the good policy
is a commonsense proposal that creates a clear national standard and
facilitates businesses' protection of their trade secrets in Federal
court.
I thank all of my colleagues who have cosponsored and supported this
bill. It has been a pleasure to work with them as we worked to ensure
that this final bill is bipartisan and achieves our goal of protecting
American trade secrets.
The formula for how we, together, got to this point is simple.
Senator Hatch and I saw a problem, we found a
[[Page S1631]]
coalition that wanted to fix it, and we came together to find a
solution.
I thank former Senator Kohl, with whom I first discussed this issue
when I came to the Senate. I thank him for his early interest and
involvement in trade secret protections. Of course, I am particularly
grateful to Senator Hatch for his championship of this bill and
leadership in finding consensus. I wish to join him in thanking
Chairman Grassley and Ranking Member Leahy for their critical support
and commend my colleagues for their focus on this issue. I wish to
specifically thank Senators Whitehouse, Feinstein, Graham, and Flake
for their contributions to this bill that has strengthened it.
I would be remiss if I didn't recognize and thank the tremendous
efforts our staff contributed together to get this bill to where it is
today. Senator Hatch has thanked many of the floor staff, leadership
staff, and staff in the House, and I would like to add to my thanks to
Matt Sandgren in Senator Hatch's office and to my tireless, dedicated,
and recently departed from my office chief counsel, Ted Schroeder, as
well as Jonathan Stahler, Andrew Crawford, and Erica Songer on my
staff.
This major achievement is the product of many contributions, and that
is how the Senate is supposed to work. Given the wide support this bill
enjoys today in the Senate and the fact that there is already an
identical House version with bipartisan support, I am hopeful the House
will act and pass this bill without delay.
I was pleased to learn earlier today that the administration has
issued a Statement of Administration Policy urging the passage of this
bill and its rapid enactment into law. The sooner this bill becomes
law, the sooner American businesses and companies can get back to
creating jobs and producing new, life-changing products and services.
Our country's legacy of innovation depends on it.
With that, I yield the floor and thank my colleague Senator Hatch.
The PRESIDING OFFICER. The Senator from Tennessee.
Remembering Justin and Stephanie Shults
Mr. CORKER. Mr. President, I rise to honor the lives of Tennessean
Justin Shults and his wife Stephanie, who were killed in the attacks in
Brussels, Belgium, on the morning of March 22.
I thank our senior Senator Lamar Alexander for joining me this
afternoon.
We are heartbroken by this tragedy, which once again hit too close to
home. Not long ago, Senator Alexander and I came to this body to mourn
the loss of five American heroes we lost in a terror attack in my
hometown of Chattanooga. We are here again today, heartbroken that two
more outstanding individuals were taken by evil, and we are reminded
that terrorism knows no borders or boundaries.
Justin Shults was a native of Gatlinburg, TN. He attended Gatlinburg-
Pittman High School, where he was valedictorian of his class. A bright
young man, Justin received an undergraduate degree from Vanderbilt
University before attending Vanderbilt's Owen Graduate School of
Management where he met Stephanie, a native of Lexington, KY.
Justin and Stephanie's journey is inspiring. Two young people from
small towns, they set out on a journey to explore the world and to
broaden their horizons.
They moved to Brussels in 2014. Justin worked for Clarcor, a
Franklin, TN, manufacturing company, and Stephanie worked for Mars.
They had a bright future ahead of them--a future that was stolen by
terror.
To their family members and to all who loved them, we offer our
prayers and deepest sympathies as we mourn their passing. We also
extend condolences to all of the families who lost loved ones and to
the people of Belgium.
I also thank the many individuals and organizations that were
instrumental in helping Justin's and Stephanie's families in the
aftermath of the attack. They include the State Department, the FBI,
the consulate in Brussels, Delta Airlines, Justin's and Stephanie's
companies, Clarcor and Mars, and members of my staff, especially Bess
McWherter.
From Chattanooga to Paris, San Bernardino, Brussels, and beyond, we
have seen unimaginable events unfold before our eyes. It is clear the
fight against evil will be a long-term struggle. To protect our
citizens, we must deepen our partnership with Europe and other allies
to defeat ISIS and other terrorists so no more families will have to
deal with the heartbreak Justin's and Stephanie's families face today.
We mourn their passing, we honor their lives, and we renew our
commitment to fight against this evil.
With that, I yield the floor to our distinguished senior Senator
Lamar Alexander.
The PRESIDING OFFICER. The Senator from Tennessee.
Mr. ALEXANDER. Mr. President, I join Senator Corker in expressing to
the families of Justin and Stephanie our deepest sympathy and our
horror at what happened to them in Brussels.
I wish to thank Senator Corker as well. Because of his position as
chairman of the Senate Foreign Relations Committee, he was able to do
some things all of us would have liked to have been able to do. He was
able to help the family by being a liaison with the families and the
State Department. These are things he wouldn't say about himself, but I
would like to say. He and his staff worked to help the family get
expedited passports, and they have stayed in touch with the families. I
hope the families of Justin and Stephanie will know that when Senator
Corker and his staff are in touch with them, that they are in touch
with them for all of us in the U.S. Senate and all of us as citizens of
the State of Tennessee.
There is so much on television today that is horrible and violent and
terroristic that we have become immune to it. It is almost an
unreality. We don't want to believe any of it is true, until it hits
home in Gatlinburg, TN, and happens to a bright young man whom everyone
in the community seems to have known, one of those young men whom
everybody looks at and says he is going to amount to something, we are
going to watch him one day, and to a young woman from Lexington, KY,
who met this young man at Vanderbilt's graduate school of management,
not just in Sevier County, TN, and not just in Lexington, where so many
people knew these two promising young Americans, but also in Nashville
and the Vanderbilt community.
This is actually the third promising young life taken from the
Vanderbilt school family. Taylor Force, a student there, was killed on
a class visit to Israel a few weeks ago. At any time that is a
horrifying, terrible thought, but this is a generation of young
Americans who have grown up with the idea of living in the whole world,
of making a contribution to the entire world. That is what Justin and
Stephanie were doing when they went to Brussels with their companies,
and now their lives are cut short by an evil act.
Our hearts go out to their families and to the communities from which
they come in Gatlinburg, in Lexington, and in the Nashville Vanderbilt
Owen school community. My personal thanks to Senator Corker for doing
what all of us want to do as well as we can, which is to be helpful to
the families and express to them our appreciation for the lives of
their children and our sorrow at what has happened to them.
Thank you, Mr. President.
I yield the floor.
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