[Congressional Record (Bound Edition), Volume 162 (2016), Part 3]
[Senate]
[Pages 3646-3651]
[From the U.S. 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.
  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 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

[[Page 3647]]

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 
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

[[Page 3648]]

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, 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.

[[Page 3649]]

       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 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

[[Page 3650]]

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.

[[Page 3651]]

  The formula for how we, together, got to this point is simple. 
Senator Hatch and I saw a problem, we found a 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.

                          ____________________