[Congressional Record (Bound Edition), Volume 162 (2016), Part 3]
[Senate]
[Pages 3651-3656]
[From the U.S. Government Publishing Office, www.gpo.gov]




                    DEFEND TRADE SECRETS ACT OF 2015

  The PRESIDING OFFICER. Under the previous order, the Senate will 
proceed to the consideration of S. 1890, which the clerk will report.
  The bill clerk read as follows:


[[Page 3652]]

       A bill (S. 1890) to amend chapter 90 of title 18, United 
     States Code, to provide Federal jurisdiction for the theft of 
     trade secrets, and for other purposes.

  The Senate proceeded to consider the bill, which had been reported 
from the Committee on the Judiciary, with an amendment to strike all 
after the enacting clause and insert in lieu thereof the following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Defend Trade Secrets Act of 
     2016''.
  


     SEC. 2. FEDERAL JURISDICTION FOR THEFT OF TRADE SECRETS.

       (a) In General.--Section 1836 of title 18, United States 
     Code, is amended by striking subsection (b) and inserting the 
     following:
       ``(b) Private Civil Actions.--
       ``(1) In general.--An owner of a trade secret that is 
     misappropriated may bring a civil action under this 
     subsection if the trade secret is related to a product or 
     service used in, or intended for use in, interstate or 
     foreign commerce.
       ``(2) Civil seizure.--
       ``(A) In general.--
       ``(i) Application.--Based on an affidavit or verified 
     complaint satisfying the requirements of this paragraph, the 
     court may, upon ex parte application but only in 
     extraordinary circumstances, issue an order providing for the 
     seizure of property necessary to prevent the propagation or 
     dissemination of the trade secret that is the subject of the 
     action.
       ``(ii) Requirements for issuing order.--The court may not 
     grant an application under clause (i) unless the court finds 
     that it clearly appears from specific facts that--

       ``(I) an order issued pursuant to Rule 65 of the Federal 
     Rules of Civil Procedure or another form of equitable relief 
     would be inadequate to achieve the purpose of this paragraph 
     because the party to which the order would be issued would 
     evade, avoid, or otherwise not comply with such an order;
       ``(II) an immediate and irreparable injury will occur if 
     such seizure is not ordered;
       ``(III) the harm to the applicant of denying the 
     application outweighs the harm to the legitimate interests of 
     the person against whom seizure would be ordered of granting 
     the application and substantially outweighs the harm to any 
     third parties who may be harmed by such seizure;
       ``(IV) the applicant is likely to succeed in showing that--

       ``(aa) the information is a trade secret; and
       ``(bb) the person against whom seizure would be ordered--
       ``(AA) misappropriated the trade secret of the applicant by 
     improper means; or
       ``(BB) conspired to use improper means to misappropriate 
     the trade secret of the applicant;

       ``(V) the person against whom seizure would be ordered has 
     actual possession of--

       ``(aa) the trade secret; and
       ``(bb) any property to be seized;

       ``(VI) the application describes with reasonable 
     particularity the matter to be seized and, to the extent 
     reasonable under the circumstances, identifies the location 
     where the matter is to be seized;
       ``(VII) the person against whom seizure would be ordered, 
     or persons acting in concert with such person, would destroy, 
     move, hide, or otherwise make such matter inaccessible to the 
     court, if the applicant were to proceed on notice to such 
     person; and
       ``(VIII) the applicant has not publicized the requested 
     seizure.

       ``(B) Elements of order.--If an order is issued under 
     subparagraph (A), it shall--
       ``(i) set forth findings of fact and conclusions of law 
     required for the order;
       ``(ii) provide for the narrowest seizure of property 
     necessary to achieve the purpose of this paragraph and direct 
     that the seizure be conducted in a manner that minimizes any 
     interruption of the business operations of third parties and, 
     to the extent possible, does not interrupt the legitimate 
     business operations of the person accused of misappropriating 
     the trade secret;
       ``(iii)(I) be accompanied by an order protecting the seized 
     property from disclosure by prohibiting access by the 
     applicant or the person against whom the order is directed, 
     and prohibiting any copies, in whole or in part, of the 
     seized property, to prevent undue damage to the party against 
     whom the order has issued or others, until such parties have 
     an opportunity to be heard in court; and
       ``(II) provide that if access is granted by the court to 
     the applicant or the person against whom the order is 
     directed, the access shall be consistent with subparagraph 
     (D);
       ``(iv) provide guidance to the law enforcement officials 
     executing the seizure that clearly delineates the scope of 
     the authority of the officials, including--

       ``(I) the hours during which the seizure may be executed; 
     and
       ``(II) whether force may be used to access locked areas;

       ``(v) set a date for a hearing described in subparagraph 
     (F) at the earliest possible time, and not later than 7 days 
     after the order has issued, unless the party against whom the 
     order is directed and others harmed by the order consent to 
     another date for the hearing, except that a party against 
     whom the order has issued or any person harmed by the order 
     may move the court at any time to dissolve or modify the 
     order after giving notice to the applicant who obtained the 
     order; and
       ``(vi) require the person obtaining the order to provide 
     the security determined adequate by the court for the payment 
     of the damages that any person may be entitled to recover as 
     a result of a wrongful or excessive seizure or wrongful or 
     excessive attempted seizure under this paragraph.
       ``(C) Protection from publicity.--The court shall take 
     appropriate action to protect the person against whom an 
     order under this paragraph is directed from publicity, by or 
     at the behest of the person obtaining the order, about such 
     order and any seizure under such order.
       ``(D) Materials in custody of court.--
       ``(i) In general.--Any materials seized under this 
     paragraph shall be taken into the custody of the court. The 
     court shall secure the seized material from physical and 
     electronic access during the seizure and while in the custody 
     of the court.
       ``(ii) Storage medium.--If the seized material includes a 
     storage medium, or if the seized material is stored on a 
     storage medium, the court shall prohibit the medium from 
     being connected to a network or the Internet without the 
     consent of both parties, until the hearing required under 
     subparagraph (B)(v) and described in subparagraph (F).
       ``(iii) Protection of confidentiality.--The court shall 
     take appropriate measures to protect the confidentiality of 
     seized materials that are unrelated to the trade secret 
     information ordered seized pursuant to this paragraph unless 
     the person against whom the order is entered consents to 
     disclosure of the material.
       ``(iv) Appointment of special master.--The court may 
     appoint a special master to locate and isolate all 
     misappropriated trade secret information and to facilitate 
     the return of unrelated property and data to the person from 
     whom the property was seized. The special master appointed by 
     the court shall agree to be bound by a non-disclosure 
     agreement approved by the court.
       ``(E) Service of order.--The court shall order that service 
     of a copy of the order under this paragraph, and the 
     submissions of the applicant to obtain the order, shall be 
     made by a Federal law enforcement officer who, upon making 
     service, shall carry out the seizure under the order. The 
     court may allow State or local law enforcement officials to 
     participate, but may not permit the applicant or any agent of 
     the applicant to participate in the seizure. At the request 
     of law enforcement officials, the court may allow a technical 
     expert who is unaffiliated with the applicant and who is 
     bound by a court-approved non-disclosure agreement to 
     participate in the seizure if the court determines that the 
     participation of the expert will aid the efficient execution 
     of and minimize the burden of the seizure.
       ``(F) Seizure hearing.--
       ``(i) Date.--A court that issues a seizure order shall hold 
     a hearing on the date set by the court under subparagraph 
     (B)(v).
       ``(ii) Burden of proof.--At a hearing held under this 
     subparagraph, the party who obtained the order under 
     subparagraph (A) shall have the burden to prove the facts 
     supporting the findings of fact and conclusions of law 
     necessary to support the order. If the party fails to meet 
     that burden, the seizure order shall be dissolved or modified 
     appropriately.
       ``(iii) Dissolution or modification of order.--A party 
     against whom the order has been issued or any person harmed 
     by the order may move the court at any time to dissolve or 
     modify the order after giving notice to the party who 
     obtained the order.
       ``(iv) Discovery time limits.--The court may make such 
     orders modifying the time limits for discovery under the 
     Federal Rules of Civil Procedure as may be necessary to 
     prevent the frustration of the purposes of a hearing under 
     this subparagraph.
       ``(G) Action for damage caused by wrongful seizure.--A 
     person who suffers damage by reason of a wrongful or 
     excessive seizure under this paragraph has a cause of action 
     against the applicant for the order under which such seizure 
     was made, and shall be entitled to the same relief as is 
     provided under section 34(d)(11) of the Trademark Act of 1946 
     (15 U.S.C. 1116(d)(11)). The security posted with the court 
     under subparagraph (B)(vi) shall not limit the recovery of 
     third parties for damages.
       ``(H) Motion for encryption.--A party or a person who 
     claims to have an interest in the subject matter seized may 
     make a motion at any time, which may be heard ex parte, to 
     encrypt any material seized or to be seized under this 
     paragraph that is stored on a storage medium. The motion 
     shall include, when possible, the desired encryption method.
       ``(3) Remedies.--In a civil action brought under this 
     subsection with respect to the misappropriation of a trade 
     secret, a court may--
       ``(A) grant an injunction--
       ``(i) to prevent any actual or threatened misappropriation 
     described in paragraph (1) on such terms as the court deems 
     reasonable, provided the order does not--

       ``(I) prevent a person from entering into an employment 
     relationship, and that conditions placed on such employment 
     shall be based on evidence of threatened misappropriation and 
     not merely on the information the person knows; or
       ``(II) otherwise conflict with an applicable State law 
     prohibiting restraints on the practice of a lawful 
     profession, trade, or business;

       ``(ii) if determined appropriate by the court, requiring 
     affirmative actions to be taken to protect the trade secret; 
     and
       ``(iii) in exceptional circumstances that render an 
     injunction inequitable, that conditions future use of the 
     trade secret upon payment of a

[[Page 3653]]

     reasonable royalty for no longer than the period of time for 
     which such use could have been prohibited;
       ``(B) award--
       ``(i)(I) damages for actual loss caused by the 
     misappropriation of the trade secret; and
       ``(II) damages for any unjust enrichment caused by the 
     misappropriation of the trade secret that is not addressed in 
     computing damages for actual loss; or
       ``(ii) in lieu of damages measured by any other methods, 
     the damages caused by the misappropriation measured by 
     imposition of liability for a reasonable royalty for the 
     misappropriator's unauthorized disclosure or use of the trade 
     secret;
       ``(C) if the trade secret is willfully and maliciously 
     misappropriated, award exemplary damages in an amount not 
     more than 2 times the amount of the damages awarded under 
     subparagraph (B); and
       ``(D) if a claim of the misappropriation is made in bad 
     faith, which may be established by circumstantial evidence, a 
     motion to terminate an injunction is made or opposed in bad 
     faith, or the trade secret was willfully and maliciously 
     misappropriated, award reasonable attorney's fees to the 
     prevailing party.
       ``(c) Jurisdiction.--The district courts of the United 
     States shall have original jurisdiction of civil actions 
     brought under this section.
       ``(d) Period of Limitations.--A civil action under 
     subsection (b) may not be commenced later than 3 years after 
     the date on which the misappropriation with respect to which 
     the action would relate is discovered or by the exercise of 
     reasonable diligence should have been discovered. For 
     purposes of this subsection, a continuing misappropriation 
     constitutes a single claim of misappropriation.''.
       (b) Definitions.--Section 1839 of title 18, United States 
     Code, is amended--
       (1) in paragraph (3)--
       (A) in subparagraph (B), by striking ``the public'' and 
     inserting ``another person who can obtain economic value from 
     the disclosure or use of the information''; and
       (B) by striking ``and'' at the end;
       (2) in paragraph (4), by striking the period at the end and 
     inserting a semicolon; and
       (3) by adding at the end the following:
       ``(5) the term `misappropriation' means--
       ``(A) acquisition of a trade secret of another by a person 
     who knows or has reason to know that the trade secret was 
     acquired by improper means; or
       ``(B) disclosure or use of a trade secret of another 
     without express or implied consent by a person who--
       ``(i) used improper means to acquire knowledge of the trade 
     secret;
       ``(ii) at the time of disclosure or use, knew or had reason 
     to know that the knowledge of the trade secret was--

       ``(I) derived from or through a person who had used 
     improper means to acquire the trade secret;
       ``(II) acquired under circumstances giving rise to a duty 
     to maintain the secrecy of the trade secret or limit the use 
     of the trade secret; or
       ``(III) derived from or through a person who owed a duty to 
     the person seeking relief to maintain the secrecy of the 
     trade secret or limit the use of the trade secret; or

       ``(iii) before a material change of the position of the 
     person, knew or had reason to know that--

       ``(I) the trade secret was a trade secret; and
       ``(II) knowledge of the trade secret had been acquired by 
     accident or mistake;

       ``(6) the term `improper means'--
       ``(A) includes theft, bribery, misrepresentation, breach or 
     inducement of a breach of a duty to maintain secrecy, or 
     espionage through electronic or other means; and
       ``(B) does not include reverse engineering, independent 
     derivation, or any other lawful means of acquisition; and
       ``(7) the term `Trademark Act of 1946' means the Act 
     entitled `An Act to provide for the registration and 
     protection of trademarks used in commerce, to carry out the 
     provisions of certain international conventions, and for 
     other purposes, approved July 5, 1946 (15 U.S.C. 1051 et 
     seq.) (commonly referred to as the ``Trademark Act of 1946'' 
     or the ``Lanham Act'')'.''.
       (c) Exceptions to Prohibition.--Section 1833 of title 18, 
     United States Code, is amended, in the matter preceding 
     paragraph (1), by inserting ``or create a private right of 
     action for'' after ``prohibit''.
       (d) Conforming Amendments.--
       (1) The section heading for section 1836 of title 18, 
     United States Code, is amended to read as follows:

     ``Sec. 1836. Civil proceedings''.

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

``1836. Civil proceedings.''.

       (e) Effective Date.--The amendments made by this section 
     shall apply with respect to any misappropriation of a trade 
     secret (as defined in section 1839 of title 18, United States 
     Code, as amended by this section) for which any act occurs on 
     or after the date of the enactment of this Act.
       (f) Rule of Construction.--Nothing in the amendments made 
     by this section shall be construed to modify the rule of 
     construction under section 1838 of title 18, United States 
     Code, or to preempt any other provision of law.
       (g) Applicability to Other Laws.--This section and the 
     amendments made by this section shall not be construed to be 
     a law pertaining to intellectual property for purposes of any 
     other Act of Congress.

     SEC. 3. TRADE SECRET THEFT ENFORCEMENT.

       (a) In General.--Chapter 90 of title 18, United States 
     Code, is amended--
       (1) in section 1832(b), by striking ``$5,000,000'' and 
     inserting ``the greater of $5,000,000 or 3 times the value of 
     the stolen trade secret to the organization, including 
     expenses for research and design and other costs of 
     reproducing the trade secret that the organization has 
     thereby avoided''; and
       (2) in section 1835--
       (A) by striking ``In any prosecution'' and inserting the 
     following:
       ``(a) In General.--In any prosecution''; and
       (B) by adding at the end the following:
       ``(b) Rights of Trade Secret Owners.--The court may not 
     authorize or direct the disclosure of any information the 
     owner asserts to be a trade secret unless the court allows 
     the owner the opportunity to file a submission under seal 
     that describes the interest of the owner in keeping the 
     information confidential. No submission under seal made under 
     this subsection may be used in a prosecution under this 
     chapter for any purpose other than those set forth in this 
     section, or otherwise required by law. The provision of 
     information relating to a trade secret to the United States 
     or the court in connection with a prosecution under this 
     chapter shall not constitute a waiver of trade secret 
     protection, and the disclosure of information relating to a 
     trade secret in connection with a prosecution under this 
     chapter shall not constitute a waiver of trade secret 
     protection unless the trade secret owner expressly consents 
     to such waiver.''.
       (b) RICO Predicate Offenses.--Section 1961(1) of title 18, 
     United States Code, is amended by inserting ``sections 1831 
     and 1832 (relating to economic espionage and theft of trade 
     secrets),'' before ``section 1951''.

     SEC. 4. REPORT ON THEFT OF TRADE SECRETS OCCURRING ABROAD.

       (a) Definitions.--In this section:
       (1) Director.--The term ``Director'' means the Under 
     Secretary of Commerce for Intellectual Property and Director 
     of the United States Patent and Trademark Office.
       (2) Foreign instrumentality, etc.--The terms ``foreign 
     instrumentality'', ``foreign agent'', and ``trade secret'' 
     have the meanings given those terms in section 1839 of title 
     18, United States Code.
       (3) State.--The term ``State'' includes the District of 
     Columbia and any commonwealth, territory, or possession of 
     the United States.
       (4) United states company.--The term ``United States 
     company'' means an organization organized under the laws of 
     the United States or a State or political subdivision 
     thereof.
       (b) Reports.--Not later than 1 year after the date of 
     enactment of this Act, and biannually thereafter, the 
     Attorney General, in consultation with the Intellectual 
     Property Enforcement Coordinator, the Director, and the heads 
     of other appropriate agencies, shall submit to the Committees 
     on the Judiciary of the House of Representatives and the 
     Senate, and make publicly available on the Web site of the 
     Department of Justice and disseminate to the public through 
     such other means as the Attorney General may identify, a 
     report on the following:
       (1) The scope and breadth of the theft of the trade secrets 
     of United States companies occurring outside of the United 
     States.
       (2) The extent to which theft of trade secrets occurring 
     outside of the United States is sponsored by foreign 
     governments, foreign instrumentalities, or foreign agents.
       (3) The threat posed by theft of trade secrets occurring 
     outside of the United States.
       (4) The ability and limitations of trade secret owners to 
     prevent the misappropriation of trade secrets outside of the 
     United States, to enforce any judgment against foreign 
     entities for theft of trade secrets, and to prevent imports 
     based on theft of trade secrets overseas.
       (5) A breakdown of the trade secret protections afforded 
     United States companies by each country that is a trading 
     partner of the United States and enforcement efforts 
     available and undertaken in each such country, including a 
     list identifying specific countries where trade secret theft, 
     laws, or enforcement is a significant problem for United 
     States companies.
       (6) Instances of the Federal Government working with 
     foreign countries to investigate, arrest, and prosecute 
     entities and individuals involved in the theft of trade 
     secrets outside of the United States.
       (7) Specific progress made under trade agreements and 
     treaties, including any new remedies enacted by foreign 
     countries, to protect against theft of trade secrets of 
     United States companies outside of the United States.
       (8) Recommendations of legislative and executive branch 
     actions that may be undertaken to--
       (A) reduce the threat of and economic impact caused by the 
     theft of the trade secrets of United States companies 
     occurring outside of the United States;
       (B) educate United States companies regarding the threats 
     to their trade secrets when taken outside of the United 
     States;
       (C) provide assistance to United States companies to reduce 
     the risk of loss of their trade secrets when taken outside of 
     the United States; and
       (D) provide a mechanism for United States companies to 
     confidentially or anonymously report the theft of trade 
     secrets occurring outside of the United States.

     SEC. 5. SENSE OF CONGRESS.

       It is the sense of Congress that--
       (1) trade secret theft occurs in the United States and 
     around the world;

[[Page 3654]]

       (2) trade secret theft, wherever it occurs, harms the 
     companies that own the trade secrets and the employees of the 
     companies;
       (3) chapter 90 of title 18, United States Code (commonly 
     known as the ``Economic Espionage Act of 1996''), applies 
     broadly to protect trade secrets from theft; and
       (4) it is important when seizing information to balance the 
     need to prevent or remedy misappropriation with the need to 
     avoid interrupting the--
       (A) business of third parties; and
       (B) legitimate interests of the party accused of 
     wrongdoing.

     SEC. 6. BEST PRACTICES.

       (a) In General.--Not later than 2 years after the date of 
     enactment of this Act, the Federal Judicial Center, using 
     existing resources, shall develop recommended best practices 
     for--
       (1) the seizure of information and media storing the 
     information; and
       (2) the securing of the information and media once seized.
       (b) Updates.--The Federal Judicial Center shall update the 
     recommended best practices developed under subsection (a) 
     from time to time.
       (c) Congressional Submissions.--The Federal Judicial Center 
     shall provide a copy of the recommendations developed under 
     subsection (a), and any updates made under subsection (b), to 
     the--
       (1) Committee on the Judiciary of the Senate; and
       (2) Committee on the Judiciary of the House of 
     Representatives.
  


     SEC. 7. IMMUNITY FROM LIABILITY FOR CONFIDENTIAL DISCLOSURE 
                   OF A TRADE SECRET TO THE GOVERNMENT OR IN A 
                   COURT FILING.

       (a) Amendment.--Section 1833 of title 18, United States 
     Code, is amended--
       (1) by striking ``This chapter'' and inserting ``(a) In 
     General.--This chapter'';
       (2) in subsection (a)(2), as designated by paragraph (1), 
     by striking ``the reporting of a suspected violation of law 
     to any governmental entity of the United States, a State, or 
     a political subdivision of a State, if such entity has lawful 
     authority with respect to that violation'' and inserting 
     ``the disclosure of a trade secret in accordance with 
     subsection (b)''; and
       (3) by adding at the end the following:
       ``(b) Immunity From Liability for Confidential Disclosure 
     of a Trade Secret to the Government or in a Court Filing.--
       ``(1) Immunity.--An individual shall not be held criminally 
     or civilly liable under any Federal or State trade secret law 
     for the disclosure of a trade secret that--
       ``(A) is made--
       ``(i) in confidence to a Federal, State, or local 
     government official, either directly or indirectly, or to an 
     attorney; and
       ``(ii) solely for the purpose of reporting or investigating 
     a suspected violation of law; or
       ``(B) is made in a complaint or other document filed in a 
     lawsuit or other proceeding, if such filing is made under 
     seal.
       ``(2) Use of trade secret information in anti-retaliation 
     lawsuit.--An individual who files a lawsuit for retaliation 
     by an employer for reporting a suspected violation of law may 
     disclose the trade secret to the attorney of the individual 
     and use the trade secret information in the court proceeding, 
     if the individual--
       ``(A) files any document containing the trade secret under 
     seal; and
       ``(B) does not disclose the trade secret, except pursuant 
     to court order.
       ``(3) Notice.--
       ``(A) In general.--An employer shall provide notice of the 
     immunity set forth in this subsection in any contract or 
     agreement with an employee that governs the use of a trade 
     secret or other confidential information.
       ``(B) Policy document.--An employer shall be considered to 
     be in compliance with the notice requirement in subparagraph 
     (A) if the employer provides a cross-reference to a policy 
     document provided to the employee that sets forth the 
     employer's reporting policy for a suspected violation of law.
       ``(C) Non-compliance.--If an employer does not comply with 
     the notice requirement in subparagraph (A), the employer may 
     not be awarded exemplary damages or attorney fees under 
     subparagraph (C) or (D) of section 1836(b)(3) in an action 
     against an employee to whom notice was not provided.
       ``(D) Applicability.--This paragraph shall apply to 
     contracts and agreements that are entered into or updated 
     after the date of enactment of this subsection.
       ``(4) Employee defined.--For purposes of this subsection, 
     the term `employee' includes any individual performing work 
     as a contractor or consultant for an employer.
       ``(5) Rule of construction.--Except as expressly provided 
     for under this subsection, nothing in this subsection shall 
     be construed to authorize, or limit liability for, an act 
     that is otherwise prohibited by law, such as the unlawful 
     access of material by unauthorized means.''.
       (b) Technical and Conforming Amendment.--Section 1838 of 
     title 18, United States Code, is amended by striking ``This 
     chapter'' and inserting ``Except as provided in section 
     1833(b), this chapter''.

  The PRESIDING OFFICER. Under the previous order, there will be 30 
minutes of debate equally divided in the usual form.
  Mr. COONS. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. COONS. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. COONS. Mr. President, I made long remarks earlier this afternoon, 
along with my colleague and friend Senator Hatch.
  I want to briefly reiterate my thanks to the many staff who worked 
tirelessly to make it possible for the Defense Trade Secrets Act to 
move forward today. I greatly appreciate the leadership and hard work 
of the chairman and ranking member of the Judiciary Committee, Senators 
Grassley and Leahy, for their hard work and their staffs' work.
  I want to personally thank Ted Schroeder, who was my chief counsel 
for many years, for his terrific work on this bill and the dozens of 
staffs here in the Senate and the House and outside groups who have 
come together to make it possible for this strong bipartisan bill to 
move forward today.
  Thank you, Mr. President.
  With that, I yield the floor.
  The PRESIDING OFFICER. The Senator from Iowa.


                       Ex Parte Seizure Provision

  Mr. GRASSLEY. Mr. President, as the Senate is prepared to vote on the 
Defend Trade Secrets Act, I rise today to enter into a colloquy with my 
longtime friend and colleague from Utah, Senator Orrin Hatch.
  Does the Senator agree that the ex parte seizure provision is a vital 
element of the bill?
  Mr. HATCH. I thank my colleague and longtime friend from Iowa, 
Senator Chuck Grassley, for the question.
  Indeed, the Defend Trade Secrets Act provides a trade secret owner 
with a right of action to go to court ex parte to have the trade secret 
seized and returned before the misappropriator can divulge it and cause 
it to lose its protection or before significant destruction of 
evidence.
  The provision is tailored to prevent abuse--balancing the need to 
recover a stolen trade secret with the rights of defendants and third 
parties.
  We drafted the bill to require the party seeking ex parte review to 
make a rigorous showing that they owned the secret, that it was stolen, 
and that third parties would not be harmed if an order were granted. We 
required a hearing at the earliest possible date. We also included 
damages for wrongful seizure, including attorney's fees.
  Could the Senator discuss the intent behind that language?
  Mr. GRASSLEY. I thank Senator Hatch. The Defend Trade Secrets Act is 
the product of bipartisan consensus, and as he will recall, before the 
bill was approved in the Senate Judiciary Committee, a modification 
added language that ex parte seizures would be granted under 
``extraordinary circumstances.''
  As I understand it, the ``extraordinary circumstances'' language was 
not added to impose an additional requirement for obtaining an ex parte 
seizure, but to acknowledge the Judiciary's general disfavor of ex 
parte procedures and to reinforce that particular circumstances are 
required to utilize the seizure provisions but still provide a much 
needed avenue for ex parte seizures when necessary.
  The legislation specifically lists these requirements for issuing an 
ex parte seizure order. For example, this authority is not available if 
an injunction under existing rules of civil procedure would be 
sufficient. The ex parte seizure provision is expected to be used in 
instances in which a defendant is seeking to flee the country or 
planning to disclose the trade secret to a third party immediately or 
is otherwise not amenable to the enforcement of the court's orders.
  Mr. HATCH. That is correct. We expect the provision will be used in 
instances such as when a trade secret misappropriator is seeking to 
flee the country or planning to disclose a trade secret immediately.
  Mr. GRASSLEY. I thank Senator Hatch for his helpful insights.
  Mr. President, today the Senate is poised to pass the Defend Trade 
Secrets Act of 2016, a bill that offers practical

[[Page 3655]]

and necessary solutions to a growing problem.
  I have recently had the opportunity to speak about a number of 
bipartisan bills that have passed out of the Judiciary Committee and 
that have been taken up here on the Senate floor. That is a testament 
to the fact that the Judiciary Committee is working hard through an 
open process to find thoughtful solutions to the problems facing our 
country. In fact, we have processed 24 bills out of the Judiciary 
Committee, all in a bipartisan fashion. Of these, 16 have passed the 
Senate and 6 have been signed into law by the President. While any 
Member of this body can tell you that it isn't always easy to find 
legislative agreement, the American people deserve hardworking 
representatives in Washington who strive to get things accomplished. 
And the record of the Judiciary Committee shows that we have chosen to 
overcome gridlock and dysfunction to pass legislation that addresses 
problems that American people face.
  Here are a few examples of the Judiciary Committee's legislative 
accomplishments so far. Last month, the Senate overwhelmingly passed 
the bipartisan Comprehensive Addiction and Recovery Act, or CARA, by a 
vote of 94-1. In the face of a growing and deadly epidemic of heroin 
and opioid painkillers, this bill addresses this crisis comprehensively 
supporting prevention, education, treatment, recovery, and law 
enforcement.
  In the past few weeks, the Senate also passed the FOIA Improvement 
Act, a bill authored by Senators Cornyn and Leahy that I worked to move 
through the committee process. It codifies a presumption of openness 
for government agencies to follow when they respond to requests for 
government records via the Freedom of Information Act. In passing the 
FOIA Improvement Act--the Senate is helping change the culture in 
government toward openness and transparency.
  In February, the Judiciary Committee reported out the bipartisan 
Justice Against Sponsors of Terrorism Act by a vote of 19-0. The bill 
holds sponsors of terrorism accountable by preventing them from 
invoking ``sovereign immunity'' in cases involving attacks within the 
United States. It also allows civil suits to be filed against foreign 
entities that have aided or abetted terrorists.
  The committee has worked to protect families and children by passing 
bills such as the Amy and Vicky Child Pornography Victim Restitution 
Improvement Act and the Adoptive Family Relief Act. The Amy and Vicky 
Child Pornography Victim Restitution Improvement Act reverses a Supreme 
Court decision that limited the restitution that victims of child 
pornography can seek from any single perpetrator, ensuring that victims 
can be fully compensated for these heinous crimes, and can focus their 
attention on healing. The Adoptive Family Relief Act was signed into 
law in October of 2015, after passing the Judiciary Committee, and aims 
to help families facing challenges with international adoptions.
  And once again today, we are set to approve another Judiciary 
Committee bill that is supported by folks across the whole of the 
political spectrum. The support behind the Defend Trade Secrets Act 
makes clear that the Senate and Judiciary Committee is working to find 
thoughtful solutions to problems facing our country. This bipartisan 
legislation is authored by Senators Hatch and Coons. It brings needed 
uniformity to trade secret litigation so creators and owners of trade 
secrets can more effectively address the growing problem of trade 
secret theft.
  It is estimated that the American economy loses 2.1 million jobs 
every year because of trade secret theft. Further, according to a 
recent report of the Commission on the Theft of American Intellectual 
Property, annual losses owing to trade secret theft are likely 
comparable to the current annual level of U.S. exports to Asia--over 
$300 billion.
  Back in Iowa we have seen this first-hand as innovative companies 
like Monsanto and DuPont-Pioneer have become targets for trade secret 
theft. In a well-publicized case, a naturalized citizen was indicted 
and convicted for engaging in a scheme with foreign nationals to steal 
proprietary test seeds from Iowa fields to benefit foreign companies.
  Contrasted with other areas of intellectual property, trade secrets 
are mainly protected as a matter of state law. Forty-seven states have 
enacted some variation of the Uniform Trade Secrets Act. Yet as we have 
learned through hearings in the Judiciary Committee and from companies 
who have experienced trade secret theft, the increasing use of 
technology by criminals and their ability to quickly travel across 
state lines, means at times these laws are inadequate. The existing 
patchwork of state laws has become a difficult procedural hurdle for 
victims who must seek immediate relief before their valuable 
intellectual property is lost forever.
  As the pace of trade secret theft has soared, the Federal Bureau of 
Investigation reports that their caseload for economic espionage and 
trade secret theft cases has also increased more than 60% from 2009 to 
2013. The Defend Trade Secrets Act will create a uniform federal civil 
cause of action, without preempting state law, to provide clear rules 
and predictability for trade secret cases. Victims of trade secret 
theft will now have another weapon in their arsenal to combat trade 
secret theft, aside from criminal enforcement. This bill will provide 
certainty of the rules, standards, and practices to stop trade secrets 
from being disseminated and losing their value, and will allow victims 
to move quickly to federal court to stop their trade secrets from being 
disseminated. By improving trade secret protection, this bill will also 
help to incentivize future innovation.
  Importantly, the Defend Trade Secrets Act codifies protections for 
whistleblowers. An amendment that I authored with Ranking Member Leahy, 
which was included in Committee, would create express protections for 
whistleblowers who disclose trade secrets confidentially to the 
government to report a violation of the law. There is a longstanding 
and compelling public interest in safeguarding the ability of 
whistleblowers to lawfully and appropriately disclose waste, fraud, and 
abuse that would otherwise never be brought to light. As chairman, and 
one of the founding members of the Senate Whistleblower Protection 
Caucus, I've seen how whistleblowers help hold wrongdoers accountable 
and allow the government to recoup taxpayer money that might otherwise 
be lost to fraud and other unlawful activities. The inclusion of this 
whistleblower protection in the Defend Trade Secrets Act allows us to 
help make sure that those who are best in a position to report illegal 
conduct can come forward.
  Passing legislation to help Americans deal with a growing problem 
like trade secret theft in a bipartisan fashion is an important 
accomplishment. I am proud of the way the Judiciary Committee continues 
to get things done.
  Mr. President, I yield back the remainder of our time.
  The PRESIDING OFFICER. All time is yielded back.
  Under the previous order, the committee-reported substitute amendment 
is agreed to.
  The bill was ordered to be engrossed for a third reading and was read 
the third time.
  Mr. GRASSLEY. Mr. President, I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The PRESIDING OFFICER. The bill having been read the third time, the 
question is, Shall it pass?
  The yeas and nays have been ordered.
  The clerk will call the roll.
  The legislative clerk called the roll.
  Mr. CORNYN. The following Senators are necessarily absent: the 
Senator from New Hampshire (Ms. Ayotte), the Senator from Texas (Mr. 
Cruz), the Senator from Colorado (Mr. Gardner), the Senator from Utah 
(Mr. Lee), the Senator from Alaska (Ms. Murkowski), the Senator from 
Alaska (Mr. Sullivan), the Senator from Pennsylvania (Mr. Toomey), and 
the Senator from Louisiana (Mr. Vitter).

[[Page 3656]]

  Further, if present and voting, the Senator from New Hampshire (Ms. 
Ayotte) would have voted ``yea'', the Senator from Colorado (Mr. 
Gardner) would have voted ``yea'', and the Senator from Alaska (Mr. 
Sullivan) would have voted ``yea''.
  Mr. DURBIN. I announce that the Senator from Delaware (Mr. Carper), 
the Senator from New York (Mrs. Gillibrand), the Senator from Vermont 
(Mr. Leahy), the Senator from Maryland (Ms. Mikulski), and the Senator 
from Vermont (Mr. Sanders).
  The PRESIDING OFFICER (Mr. Lankford). Are there any other Senators in 
the Chamber desiring to vote?
  The result was announced--yeas 87, nays 0, as follows:

                      [Rollcall Vote No. 39 Leg.]

                                YEAS--87

     Alexander
     Baldwin
     Barrasso
     Bennet
     Blumenthal
     Blunt
     Booker
     Boozman
     Boxer
     Brown
     Burr
     Cantwell
     Capito
     Cardin
     Casey
     Cassidy
     Coats
     Cochran
     Collins
     Coons
     Corker
     Cornyn
     Cotton
     Crapo
     Daines
     Donnelly
     Durbin
     Enzi
     Ernst
     Feinstein
     Fischer
     Flake
     Franken
     Graham
     Grassley
     Hatch
     Heinrich
     Heitkamp
     Heller
     Hirono
     Hoeven
     Inhofe
     Isakson
     Johnson
     Kaine
     King
     Kirk
     Klobuchar
     Lankford
     Manchin
     Markey
     McCain
     McCaskill
     McConnell
     Menendez
     Merkley
     Moran
     Murphy
     Murray
     Nelson
     Paul
     Perdue
     Peters
     Portman
     Reed
     Reid
     Risch
     Roberts
     Rounds
     Rubio
     Sasse
     Schatz
     Schumer
     Scott
     Sessions
     Shaheen
     Shelby
     Stabenow
     Tester
     Thune
     Tillis
     Udall
     Warner
     Warren
     Whitehouse
     Wicker
     Wyden

                             NOT VOTING--13

     Ayotte
     Carper
     Cruz
     Gardner
     Gillibrand
     Leahy
     Lee
     Mikulski
     Murkowski
     Sanders
     Sullivan
     Toomey
     Vitter
  The bill (S. 1890), as amended, was passed.

                          ____________________