[Congressional Record (Bound Edition), Volume 162 (2016), Part 3]
[Senate]
[Pages 3656-3657]
[From the U.S. Government Publishing Office, www.gpo.gov]




                            MORNING BUSINESS

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                       DEFEND TRADE SECRETS BILL

  Mr. DURBIN. Mr. President, I am pleased that the Senate voted today 
on the Defend Trade Secrets Act. I am proud to be an original cosponsor 
of this legislation, which would create a Federal civil cause of action 
to help deter and remedy trade secret theft that is costing American 
businesses hundreds of billions of dollars each year.
  Trade secrets, such as manufacturing processes, industrial 
techniques, and customer lists, are critical assets for U.S. companies. 
However, American companies are increasingly being targeted by efforts 
to steal this proprietary information, often by overseas interests. 
Currently, there is no Federal civil remedy available to companies to 
fight this theft, and the Justice Department does not have the 
resources to investigate and prosecute criminally all of the thefts 
that are taking place. While most States have passed civil trade secret 
laws, these laws are not well suited for remedying interstate or 
foreign trade secret theft. The lack of a Federal civil remedy for 
trade secret misappropriation is a glaring gap in current law, 
especially since Federal civil remedies are available to protect other 
forms of intellectual property such as patents, trademarks, and 
copyrights.
  The Defend Trade Secrets Act would close this gap by creating a civil 
right of action in Federal court for misappropriation of a trade secret 
that is related to a product or service used in interstate or foreign 
commerce. Available remedies would include injunctions, damages, and in 
certain cases enhanced damages. This broadly bipartisan bill has been 
carefully crafted to empower companies to protect their trade secrets 
through a process that will be both swift and fair. By helping American 
companies safeguard their essential trade secrets from theft, the bill 
will help keep innovation and jobs in America.
  The Defend Trade Secrets Act has been cosponsored by 65 Senators and 
is supported by groups and companies representing a broad swath of the 
American economy, including numerous employers based in my home State 
of Illinois, such as Caterpillar and Illinois Tool Works. I am pleased 
that the Senate is moving forward with passage of this legislation, and 
I hope the bill will soon pass the House of Representatives and be 
signed into law.
  (At the request of Mr. Reid, the following statement was ordered to 
be printed in the Record.)
 Mr. LEAHY. Today, the Senate voted on legislation that will 
provide a valuable tool to protect against trade secret theft. This 
legislation is supported by businesses from diverse sectors of our 
economy, including companies large and small.
  In Vermont, trade secrets protect the specialized knowledge of 
woodworkers who have made heirloom products for generations, and 
cutting-edge start-ups that are shaping the future of plastics, 
software, and green technology. Trade secrets protect the recipes for 
Vermont craft brews and closely guarded customer lists for our top 
tourist services. Today's legislation provides an important tool to 
protect these innovative businesses in Vermont and across the country.
  The Defend Trade Secrets Act contains a bipartisan provision I 
offered with Senator Grassley to ensure that employers and other 
entities cannot bully whistleblowers or other litigants by threatening 
them with a lawsuit for trade secret theft. The provision protects 
disclosures made in confidence to law enforcement or an attorney for 
the purpose of reporting a suspected violation of law and disclosures 
made in the course of a lawsuit, provided that the disclosure is made 
under seal. It requires employers to provide clear notice of this 
protection in any nondisclosure agreements they ask individuals to 
sign. This commonsense public policy amendment is supported by the 
Project on Government Oversight and the Government Accountability 
Project and builds upon valuable scholarly work by Professor Peter 
Menell.
  Good, thoughtful work was done in the Senate Judiciary Committee to 
craft the bill we are voting on today, which builds on earlier versions 
introduced in prior Congresses. It is a testament to how the Judiciary 
Committee can and should operate when it functions with regular order. 
We held a public hearing on the issue of trade secret theft in the 
Subcommittee on Crime and Terrorism during the 113th Congress and 
another hearing in the full committee this past December. Senators 
suggested improvements to the bill, they debated them, and they voted 
on the legislation.
  Unfortunately, the regular order and fair consideration that was 
given to this legislation is being denied for one of the Senate's most 
important and

[[Page 3657]]

solemn responsibilities: considering the Supreme Court nomination 
pending in the Senate Judiciary Committee. Americans by a 2-to-1 margin 
want the Senate to move forward with a full and fair process for Chief 
Judge Garland. The Senate today is coming together to pass trade 
secrets legislation, but that does nothing to absolve us from doing our 
jobs by considering the pending Supreme Court nominee.
  Mrs. FEINSTEIN. Mr. President, I wish to express my support for the 
Defend Trade Secrets Act and to explain some of the changes that were 
made in the Judiciary Committee to ensure the bill does not adversely 
impact California.
  First, let me congratulate Senators Hatch and Coons on their work on 
this bill.
  This bill will help protect vital trade secrets of American companies 
by providing a Federal cause of action for the theft of trade secrets. 
It will ensure there is access to Federal courts in these cases. During 
consideration of the bill in the Judiciary Committee, some members, 
including me, voiced concern that the injunctive relief authorized 
under the bill could override State law limitations that safeguard the 
ability of an employee to move from one job to another. This is known 
as employee mobility. Some States, including California, have strong 
public policies or laws in favor of employee mobility. These are 
reflected in some State court precedent or in laws that are on the 
books.
  When this bill came before the Judiciary Committee, there was a 
serious concern that a Federal law without similar limits would 
override the law in those States and create impairments on employees' 
ability to move from job to job. If that were to happen, it could be a 
major limitation on employee mobility that does not exist today. To 
prevent this, the bill now includes language to preserve the law in 
California and elsewhere. Specifically, the bill bars an injunction 
``to prevent a person from entering into an employment relationship,'' 
period. In other words, relief under this bill cannot include an 
injunction barring a person from starting a new job. As I understand 
it, this reflects the practice under current law in California.
  Secondly, any injunction that is issued cannot be based ``merely on 
the information the person knows.'' This language makes clear that any 
injunctive relief must be based on real evidence of a threat to the 
trade secrets, not simply on the employee's knowledge.
  Third, the bill also includes language to ensure that any injunction 
issued under the bill does not ``otherwise conflict with an applicable 
State law prohibiting restraints on the practice of a lawful 
profession, trade, or business.''
  This language will ensure that States are able to protect against the 
use of this bill to create unlawful restraints on business practices 
within their States. In fact, California's strong public policy in 
favor of employee mobility stems from such a law, which is located at 
section 16600 in the State's business and professions code. This law 
states: ``Except as provided in this chapter, every contract by which 
anyone is restrained from engaging in a lawful profession, trade, or 
business of any kind is to that extent void.''
  As I said in the markup of this bill in the Judiciary Committee and 
as is noted in the Judiciary Committee's report, if a State's trade 
secrets law authorizes additional remedies beyond what this bill 
authorizes, those State law remedies will still be available.
  I felt it was important to protect California, which has a vibrant 
and dynamic economy of almost 40 million people in so many sectors.
  I am very grateful that Senators Hatch and Coons were willing to 
accommodate my concerns, and I am pleased to support this bill and to 
cosponsor it.
  Thank you very much.

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