[Congressional Record Volume 162, Number 50 (Monday, April 4, 2016)]
[Senate]
[Page S1626]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       DEFEND TRADE SECRETS BILL

  Ms. KLOBUCHAR. Mr. President, I rise today to speak in support of the 
Defend Trade Secrets Act, which is before us today. I thank Senators 
Hatch and Coons for their important work on this bill and Chairman 
Grassley and Ranking Member Leahy for their leadership as well.
  Stolen trade secrets cost American companies--and thus their 
workers--billions of dollars each year and threaten their ability to 
innovate and compete globally. This bill will help protect vital 
intellectual property, and I am pleased to be a cosponsor.
  Trade secrets are the lifeblood of so many businesses in American. 
Stealing those ideas can wipe out years of research by employees and 
development and cost millions of dollars in losses because 
competitors--those that steal the secrets--reap the benefits of 
innovation without putting in any of the work. Although measuring the 
total cost of trade secret theft is difficult, one study using multiple 
approaches estimates the yearly cost at 1 to 3 percent of the U.S. 
gross domestic product.
  Today, as much as 80 percent of companies' assets are intangible, the 
majority of them in the form of trade secrets. This includes everything 
from financial, business, scientific, technical, economic, and 
engineering information to formulas, designs, prototypes, processes, 
procedures, and computer code. Trade secret theft poses a particular 
risk for my home State of Minnesota, which has a strong tradition of 
innovation and bringing technological advances to the marketplace. Our 
companies have brought the world everything from the pacemaker to the 
Post-it Notes. Protecting their intellectual property is critical to 
their economic success, critical to our businesses, and, most 
importantly, critical to the workers and employees who make their 
living in American businesses.
  Here are some examples of what we are talking about and the costs 
when trade secret thefts occur.
  In 2011 a former employee of the Minnesota agricultural company 
Cargill stole trade secrets of Cargill and Dow Chemical regarding a 
product and gave them to a Chinese university. The two companies 
suffered combined losses of over $7 million. Fortunately, the former 
employee was caught, convicted, and received 87 months in prison--the 
strongest sentence possible. But look at the loss that occurred--$7 
million.
  That same year, an employee of a Minnesota paint company, Valspar, 
tried to steal $20 million worth of chemical formulas to give to a 
Chinese company in exchange for a high-ranking job. That really 
happened. The authorities caught him before he completed his theft, and 
he received a sentence of 15 months in jail.
  But too many thefts go unprosecuted, and the costs go beyond simply 
dollars and cents. Medical device makers Medtronic and Boston 
Scientific hope to bring advanced care to patients in China. These 
companies would like to do even more but fear they won't be able to 
protect sensitive proprietary technology, and that holds them back. 
Stronger protection of trade secrets will benefit consumers across the 
world as well as trade secret owners.
  In 1996 Congress enacted the Economic Espionage Act, which made 
economic espionage and trade secret theft a Federal crime. Nearly 20 
years later, the threat of trade secret theft has grown. Thumb drives 
and the cloud have replaced file cabinets for storage information, 
making stealing a trade secret as easy as clicking a button or touching 
a screen. Trade secret theft threatens not just businesses but jobs 
and, certainly, innovation.
  Protecting the intellectual property of American businesses needs 
21st century solutions. The Defend Trade Secrets Act demonstrates our 
commitment at the Federal level to protect all forms of a business's 
intellectual property. This balanced bill gives companies two more 
tools to effectively protect their trade secrets.
  First, a party can seek an ex parte court order to seize stolen trade 
secrets to prevent their destruction or dissemination. To prevent 
abuse, the requirements to obtain an order are rigorous, access to the 
seized material is limited, and it is only available in what are 
considered ``extraordinary circumstances.''
  Second, the bill creates a Federal private right of action for trade 
secret theft. Companies will be able to rely on a national standard to 
efficiently protect their intellectual property.
  Securing the trade secrets of American businesses and their employees 
is a serious issue and needs to be addressed, and I urge my colleagues 
to support the Defend Trade Secrets Act.
  I yield the floor.
  I suggest the absence of a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. HATCH. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.

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