[Congressional Record (Bound Edition), Volume 162 (2016), Part 4]
[House]
[Pages 5212-5219]
[From the U.S. Government Publishing Office, www.gpo.gov]




                    DEFEND TRADE SECRETS ACT OF 2016

  Mr. GOODLATTE. Mr. Speaker, I move to suspend the rules and pass the 
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 Clerk read the title of the bill.
  The text of the bill is as follows:

                                S. 1890

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     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

[[Page 5213]]

     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 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:

[[Page 5214]]

       (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;
       (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 SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Virginia (Mr. Goodlatte) and the gentleman from Michigan (Mr. Conyers) 
each will control 20 minutes.
  The Chair recognizes the gentleman from Virginia.

                              {time}  1445


                             general leave

  Mr. GOODLATTE. Mr. Speaker, I ask unanimous consent that all Members 
may have 5 legislative days within which to revise and extend their 
remarks and include extraneous materials on S. 1890, currently under 
consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Virginia?
  There was no objection.
  Mr. GOODLATTE. Mr. Speaker, I yield myself such time as I may 
consume.
  Today we are here to consider S. 1890, the Defend Trade Secrets Act 
of 2016. This bill puts forward enhancements to our Federal trade 
secrets law, creating a Federal civil remedy for trade secrets 
misappropriation that will help American innovators protect their 
intellectual property from criminal theft by foreign agents and those 
engaging in economic espionage. This bill will help U.S. 
competitiveness, job creation, and our Nation's future economic 
security.
  Our intellectual property laws cover everything from patents, 
copyrights

[[Page 5215]]

and trademarks, and include trade secrets.
  But what are trade secrets?
  Trade secrets law is used to protect some of the most iconic 
inventions in America. For example, a trade secret can include recipes 
like Colonel Sanders' secret recipe of 11 herbs and spices, and the 
125-year-old formula for Coca-Cola housed in a vault at the World of 
Coca-Cola in Atlanta, Georgia.
  However, trade secrets are not simply isolated to the realm of food 
and beverages. They can include confidential formulas like the formula 
for WD-40, manufacturing techniques, customer lists, and algorithms 
like Google's search engine.
  Trade secrets occupy a unique place in the IP portfolios of our most 
innovative companies, but because they are unregistered and not 
formally reviewed like patents, there are no limitations on discovering 
a trade secret by fair, lawful methods, such as reverse engineering or 
independent development. In innovative industries, that is simply the 
free market at work.
  Though trade secrets are not formally reviewed, they are protected 
from misappropriation, which includes obtaining the trade secret 
through improper or unlawful means. Misappropriation can take many 
forms, whether it is an employee selling blueprints to a competitor or 
a foreign agent hacking into a server. In addition, one could argue 
that even a foreign government's policies to require forced technology 
transfer is a form of misappropriation.
  Though most States base their trade secrets laws on the Uniform Trade 
Secrets Act, the Federal Government protects trade secrets through the 
Economic Espionage Act. In the 112th Congress, the Committee on the 
Judiciary helped enact two pieces of legislation to help improve the 
protection of trade secrets, and in the 113th Congress, we introduced 
and passed out of committee the first version of this trade secrets 
bill unanimously.
  Today we build on our efforts over these past 2 years and are taking 
a significant and positive step toward improving our Nation's trade 
secrets laws and continuing to build on our important work in this area 
of intellectual property. I urge my colleagues to support this bill.
  I reserve the balance of my time.

                                            Information Technology


                                             Industry Council,

                                   Washington, DC, April 26, 2016.
     Hon. Kevin McCarthy,
     Majority Leader, House of Representatives, Washington, DC.
     Hon. Bob Goodlatte,
     Chairman, House Committee on the Judiciary, Washington, DC.
     Hon. Doug Collins,
     House of Representatives,
         Washington, DC.
     Hon. Nancy Pelosi,
     Democratic Leader, House of Representatives, Washington, DC.
     Hon. John Conyers,
     Ranking Member, House Committee on the Judiciary, Washington, 
         DC.
     Hon. Jerrold Nadler,
     House of Representatives,
         Washington, DC.
       Dear Majority Leader McCarthy, Democratic Leader Pelosi, 
     Chairman Goodlatte, Ranking Member Conyers, Representative 
     Collins, and Representative Nadler: On behalf of the members 
     of the Information Technology Industry Council (ITI), I write 
     to express our support for S. 1890, the Defend Trade Secrets 
     Act of 2016 (DTSA), and commend your efforts to bring it to 
     the House floor for debate and vote. Given the importance of 
     trade secrets protection to the high-tech industry, we will 
     consider scoring votes in support of DTSA in our 114th 
     Congressional Voting Guide.
       ITI companies are at the forefront of innovation and have 
     some of the largest trade secret and patent portfolios in the 
     world tied to numerous goods and services offered to 
     governments, commercial enterprises and consumers around the 
     globe. In fact, patent portfolios often grow as a result of 
     the ideas and products originating as trade secrets. Customer 
     lists, manufacturing processes, and source code are just a 
     few examples of important assets considered to be trade 
     secrets by many companies.
       Our companies pour billions of dollars into research and 
     development to create products and services that ultimately 
     become the backbone of their businesses. Trade secrets 
     produced through this research and development increasingly 
     have become attractive to competitors in other countries. In 
     addition, advances in technology now make it easy to copy 
     trade secret materials onto a jump drive or lap top computer 
     that once would have taken reams of paper to reproduce. As a 
     result, the threat posed to American trade secrets has 
     increased and theft of these secrets robs our economy of 
     growth and innovation.
       It is long overdue for our trade secrets law to be 
     modernized to keep pace with the rapid developments of our 
     companies and the technologies and methods used by the 
     criminals who target them. The patchwork of state trade 
     secrets laws, while effective for local theft, fail to meet 
     the demands of the global nature of today's trade secret 
     misappropriation. In addition, trade secrets do not enjoy the 
     same federal protections as other types of intellectual 
     property. While it is a federal crime to steal a trade 
     secret, unlike patents, copyrights and trademarks, there is 
     no federal civil remedy.
       DTSA provides a solution to these problematic gaps by 
     making federal law more comprehensive and providing trade 
     secrets owners with remedies all forms of intellectual 
     property should be afforded. With both a federal criminal and 
     a federal civil cause of action, large and small companies 
     alike will have access to more tools they need to effectively 
     combat trade secret theft and help to ensure future 
     innovation continues to occur in the United States.
       While trade secret protection is important domestically, as 
     American companies expand in the global marketplace, this 
     protection is also needed worldwide. As we operate in other 
     countries and work with them to encourage strong intellectual 
     property protection within their own borders, the Defend 
     Trade Secrets Act will serve as a model for effective 
     protection.
       We thank the House Judiciary Committee for quickly 
     approving this legislation, and we look forward to seeing the 
     bill pass in the House of Representatives and move to the 
     president's desk to become law.
       On behalf of ITI's member companies, I thank you for your 
     leadership on intellectual property protection and urge you 
     and your colleagues to support S. 1890.
           Sincerely,
                                                 Dean C. Garfield,
     President & CEO.
                                  ____

                                           National Association of


                                                Manufacturers,

                                                   April 26, 2016.
     House of Representatives,
     Washington, DC.
       Dear Representatives: The National Association of 
     Manufacturers (NAM), the largest manufacturing association in 
     the United States representing manufacturers in every 
     industrial sector and in all 50 states urges you to support 
     S. 1890, the Defend Trade Secrets Act of 2016. S. 1890 passed 
     the Senate by a vote of 87-0, and represents a bipartisan and 
     amended version of H.R. 3326, introduced by Representatives 
     Doug Collins (R-GA) and Jerrold Nadler (D-NY).
       The NAM supports further safeguarding of confidential 
     business information and trade secrets through the expansion 
     of federal jurisdiction to enable faster, nationwide 
     enforcement of all intellectual property (IP) rights. IP is 
     one of the most valued business assets for manufacturers of 
     all sizes. The impact of its theft has increased 
     exponentially in today's digitally-driven environment. Mass 
     amounts of this critical business information can now be 
     illegally transferred to a small data storage device and 
     removed easily and quickly from a manufacturers' facility. 
     The value of this business information creates an inseparable 
     link between the need for protection of intellectual property 
     rights and innovation, competitiveness, and sound economic 
     growth.
       The NAM supports S. 1890 because it would strengthen the 
     ability of manufacturers to protect their IP by creating a 
     federal civil right of action to help prevent and prosecute 
     trade secret theft, an important tool that does not exist 
     today. Such a tool eliminates the difficult, time-consuming, 
     and costly process imposed on manufacturers as they currently 
     must work with multiple state jurisdictions in order to 
     apprehend perpetrators of trade secret theft. A federal 
     process that cuts across state lines would also increase the 
     likelihood of preventing this valuable data from leaving the 
     country permanently.
       Manufacturers deploy the latest technology and controls to 
     protect the critical information guarded by trade secrets. In 
     the unfortunate instances when this data is compromised, 
     manufacturers need to act quickly before it is disclosed and 
     its value is lost forever. S. 1890 would modernize our 
     current system, providing owners of trade secrets the same 
     legal options as owners of other forms of IP, and give them 
     the ability to pursue

[[Page 5216]]

     trade secret theft aggressively and efficiently.
       The NAM's Key Vote Advisory Committee has indicated that 
     votes on S. 1890, including procedural motions, may be 
     considered for designation as Key Manufacturing Votes in the 
     114th Congress. Thank you for your consideration.
           Sincerely,
     Aric Newhouse.
                                  ____

                                              Chamber of Commerce,


                                     United States of America,

                                   Washington, DC, April 26, 2016.
       To The Members of the U.S. House of Representatives: The 
     U.S. Chamber of Commerce, the world's largest business 
     federation representing the interests of more than three 
     million businesses of all sizes, sectors, and regions, as 
     well as state and local chambers and industry associations, 
     and dedicated to promoting, protecting, and defending 
     America's free enterprise system, strongly supports S. 1890, 
     the ``Defend Trade Secrets Act of 2016,'' and urges the House 
     to expeditiously pass this bill.
       Intellectual property sector industries generate 35% of all 
     U.S. Gross Domestic Product and are responsible for two-
     thirds of all exports and over forty million good-paying 
     jobs. The threat of trade secrets theft is of increasing 
     concern to U.S. economic security and domestic jobs, and S. 
     1890 would provide companies with an effective tool to combat 
     this growing problem. Creating a federal civil cause of 
     action to complement existing criminal remedies and providing 
     a uniform system and legal framework would enable companies 
     to better mitigate the commercial injury and loss of 
     employment that often occur when trade secrets are stolen.
       The Chamber appreciates the House's attention to this 
     important issue that impacts companies that depend on 
     intellectual property to spur innovation, create jobs, and 
     bring new products to market that benefit consumers. By 
     creating a federal civil remedy for trade secrets theft, this 
     bill would help ensure the trade secrets of U.S. companies 
     are given similar protections afforded to other forms of 
     intellectual property including patents, trademarks, and 
     copyrights.
       The Chamber urges you to support S. 1890 and may consider 
     votes on, or in relation to, this bill in our annual How They 
     Voted scorecard.
           Sincerely,
                                                  R. Bruce Josten.

  Mr. CONYERS. Mr. Speaker, I yield myself such time as I may consume.
  I rise in support of S. 1890, the Defend Trade Secrets Act. This 
measure amends the Economic Espionage Act of 1996 to create a Federal 
civil cause of action and to facilitate expedited ex parte seizure of 
property when necessary to preserve evidence or prevent dissemination.
  The House counterpart to this bill, H.R. 3326, which was introduced 
by our committee colleagues, the gentleman from Georgia (Mr. Collins) 
and the distinguished gentleman from New York (Mr. Nadler), now has 164 
bipartisan cosponsors, including myself.
  Likewise, S. 1890 enjoys broad bipartisan and bicameral support, as 
evidenced by the fact that the Senate passed this bill by a vote of 87-
0 earlier this month. The House Committee on the Judiciary reported 
this bill favorably by a unanimous voice vote only last week.
  There are several reasons that I support the legislation. To begin 
with, S. 1890 will enhance the protection of trade secrets, which is 
integral to the success of any business. It is estimated that the value 
of trade secrets owned by United States companies as of 2009 was 
approximately $5 trillion.
  Although trade secrets are fundamental to the success of any 
business, United States companies have struggled to protect these 
valuable assets, especially in the digital age of smartphones and the 
Internet. It is estimated that the loss of trade secrets as a result of 
cyber espionage costs these businesses between $200 billion and $300 
billion annually.
  Thieves take advantage of ever-evolving, innovative technologies to 
access sensitive trade secrets information and to distribute it 
immediately.
  While Federal law protects other forms of intellectual property by 
providing access to Federal courts for aggrieved parties to seek 
redress, there is no Federal civil cause of action for enforcement of 
trade secrets protection.
  S. 1890 addresses this need by establishing a Federal cause of action 
for trade secrets owners to obtain injunctive and monetary relief, 
which will be a powerful new tool to protect their intellectual 
property.
  Now, another reason I support the bill is that it would foster 
uniformity among the States. Although States provide civil remedies for 
trade secrets theft, these laws often fall short when trade secrets are 
taken across State lines. As a result, businesses that have nationwide 
operations must deal with various differing State laws, which can be 
too costly for some businesses, particularly smaller ones. This also 
prevents businesses from taking full advantage of the rights that they 
might have under the law.
  S. 1890 would provide trade secrets owners access to uniform national 
law and the ability to make their case in Federal court.
  Lastly, I support the bill because it reflects constructive feedback 
from various stakeholders.
  We have been working on this legislation for almost 2 years. It 
reflects the input from a broad spectrum of stakeholders, and the bill 
is an excellent example of what can be achieved when there is 
bipartisan collaboration.
  I close by urging my colleagues to support this important legislation 
so that we can send it to the President's desk for signature.
  Mr. Speaker, I reserve the balance of my time.
  Mr. GOODLATTE. Mr. Speaker, it is my pleasure to yield 5 minutes to 
the gentleman from Georgia (Mr. Collins), the chief sponsor of the 
House version of this bill and a member of the Committee on the 
Judiciary.
  Mr. COLLINS of Georgia. Mr. Speaker, I rise today in support of S. 
1890, the Defend Trade Secrets Act. I introduced the House companion, 
and I am proud to see this bill moving forward. This legislation is 
sorely needed to protect the United States from the billions of dollars 
it faces in losses each year due to trade secrets theft.
  However, the legislation could not have reached this point without 
the hard work and dedication of several people. First, I would like to 
thank Chairman Goodlatte and his staff for their efforts to move this 
bill through the Committee on the Judiciary and bring it to the floor. 
This has been, as the ranking member said, a several-year process. We 
are glad to see it here.
  I also wanted to thank those who introduced the House legislation 
with me, Mr. Nadler and Mr. Jeffries, both from New York, and their 
staff, for their commitment to the issue and their willingness to work 
across the aisle to implement meaningful reform.
  On the Senate side, Senators Hatch and Coons were instrumental in 
getting us to this point. Their leadership, along with the leadership 
of Chairman Grassley and Senator Leahy, helped ensure the strong Senate 
vote of 87-0 and ensured this product was able to come to the House.
  I would finally like to take just a moment to thank Jennifer 
Choudhry, my former legislative director, for her hand in introducing 
and shepherding this bill through the legislative process. Her 
contributions were invaluable, and she should be proud of her part in 
getting this legislation to the House floor today. I also thank Sally 
Rose Larson, who has taken up the mantle in my office and helped to get 
us here to the finish line.
  The Defend Trade Secrets Act enjoys support from a broad coalition of 
groups and industries, from Americans for Tax Reform, the American Bar 
Association Intellectual Property Law Section, the Information 
Technology Industry Council, the chamber of commerce, the National 
Association of Manufacturers, and many more. In fact, Mr. Speaker, this 
bill has more than 160 bipartisan cosponsors.
  Mr. Speaker, estimates show that as much as 80 percent of companies' 
assets are intangible, many in the form of trade secrets. Couple that 
with the fact that trade secrets theft is costing America billions of 
dollars each year. In fact, one study indicates that trade secrets 
theft costs America approximately $300 billion annually. That price tag 
will continue to grow as technology and thieves become more 
sophisticated. Trade secrets theft jeopardizes our economic security 
and threatens jobs, which is why it is so important that we take steps 
to address it.
  Trade secrets include everything from business information to 
designs,

[[Page 5217]]

prototypes, and formulas. Coming from Georgia, one good example is the 
recipe for Coca-Cola. Trade secrets are commercially valuable 
information subject to secrecy protection. They are a critical form of 
intellectual property, yet they do not enjoy the same protections that 
apply to other forms of intellectual property, such as copyrights, 
patents, and trademarks.
  Additionally, trade secrets derive economic value from not being 
publicly known, and this confidential business information can be 
protected for an unlimited time. However, once trade secrets are 
disclosed, they instantly lose their value, making it even more 
important to have the mechanisms in place to protect them.
  Currently, Federal law is insufficient to address many of the 
challenges related to trade secrets theft in today's economy. The only 
Federal mechanism for trade secrets protection under current law is the 
1996 Economic Espionage Act, which made trade secrets theft by foreign 
nationals a criminal offense.
  However, this only addresses part of the problem, and criminalizes 
only a portion of trade secrets theft, whereas a civil remedy for 
misuse and misappropriation would allow companies to more broadly 
protect their property.
  The Defend Trade Secrets Act will address that, and it will 
strengthen the ability of companies to protect valuable trade secrets, 
which, in turn, allows them to protect American jobs and innovation. 
The bill will empower companies to protect their trade secrets in 
Federal court by creating a Federal private right of action.
  The bill streamlines access to relief, and, in extraordinary 
circumstances, allows victims of trade secrets theft to obtain a 
seizure to ensure trade secrets are not abused while cases are pending. 
The Defend Trade Secrets Act also provides for an injunction and 
damages.
  Protecting the trade secrets of American businesses is crucial to 
keeping our country a leader in the world economy. Providing a Federal 
civil remedy will create certainty for companies throughout the Nation, 
including my home State of Georgia.
  Congress has the responsibility to give industries the tools they 
need to protect their intellectual property and, in turn, encourage job 
creation and economic growth. This bill takes a step forward in better 
protecting American innovation.
  Again, I want to thank the tireless work of my House and Senate 
colleagues in advancing this critical legislation. I am proud to see 
this bill, which provides critical intellectual property protections 
and protects American businesses, move forward. I would encourage all 
my colleagues to join me today in supporting the Defend Trade Secrets 
Act.
  Mr. CONYERS. Mr. Speaker, I yield 3 minutes to the gentleman from New 
York (Mr. Nadler), a senior member of the Committee on the Judiciary 
and author of this bill.
  Mr. NADLER. Mr. Speaker, I rise in strong support of S. 1890, the 
Defend Trade Secrets Act of 2016. This long overdue legislation would 
protect businesses across the country from the growing threat of trade 
secrets theft by creating a uniform Federal civil cause of action for 
misappropriation of trade secrets.
  Trade secrets are proprietary business information that derive their 
value from being and remaining secret. This includes secret recipes, 
software codes, and manufacturing processes--information that, if 
disclosed, could prove ruinous to a company. As the United States 
economy becomes more and more knowledge- and service-based, trade 
secrets are increasingly becoming the foundation of businesses across 
the country, with one estimate placing the value of trade secrets in 
the United States at $5 trillion.

                              {time}  1500

  Unfortunately, with such fortunes resting on trade secrets, theft of 
this property is inevitable. And in today's digital environment, it has 
never been easier to transfer stolen property across the globe with the 
click of a button. By one estimate, the American economy loses annually 
as much as $300 billion or more due to misappropriation of trade 
secrets, leading to loss of up to 2.1 billion jobs each year.
  With so much at stake, it is absolutely vital that the law include 
strong protections against theft of trade secrets. However, our current 
patchwork of Federal and State laws has proven inadequate to the job. 
While the Federal Government may bring criminal prosecutions and may 
move for civil injunctions, this power is rarely exercised and often 
fails to adequately compensate the victims.
  The States provide civil causes of action for victims of theft, with 
money damages available, but this system has not proven efficient or 
effective for incidents that cross State and, sometimes, international 
borders.
  Once upon a time, trade secrets might have been kept in a file 
cabinet somewhere, and would-be thieves would have to spirit away a 
physical copy, making it likely that they would be caught before 
crossing State lines. But today, trade secrets can be loaded onto a 
thumb drive and mailed out of State or even sent electronically 
anywhere across the globe in an instant.
  Pursuing a defendant and the evidence in dispute across State lines 
present a host of challenges for victims of trade secret theft, 
particularly when time is of the essence. The need for a Federal 
solution is, therefore, clear.
  The Defend Trade Secrets Act fills this gap by creating a uniform 
Federal civil cause of action for theft of trade secrets. It also 
provides for expedited ex parte seizure of property, but only in 
extraordinary circumstances where necessary to preserve evidence or 
prevent dissemination.
  As the lead Democratic cosponsor of H.R. 3326, the House companion to 
this legislation, I am very pleased that this bill is on the floor 
today, and I want to thank everyone who worked hard to bring us to this 
point. In particular, I want to thank the sponsor of H.R. 3326, the 
gentleman from Georgia (Mr. Collins), as well as Ranking Member 
Conyers, Chairman Goodlatte, and the gentleman from New York (Mr. 
Jeffries). I also appreciate the sponsors of the Senate bill, S. 1890, 
Senators Hatch and Coons, for all of their work on this legislation.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. CONYERS. I yield the gentleman an additional 30 seconds.
  Mr. NADLER. The bill we are considering today represents the 
culmination of over 2 years of negotiations with various stakeholders 
and has strong bipartisan support, with 164 cosponsors in the House and 
65 in the Senate.
  This is good legislation that carefully balances the rights of 
defendants and the needs of American businesses to protect their most 
valuable assets. The Senate passed the bill 87-0. With passage here 
today, we can send it straight to the President's desk.
  I urge my colleagues to support the bill.
  Mr. GOODLATTE. Mr. Speaker, I reserve the balance of my time.
  Mr. CONYERS. Mr. Speaker, I yield 3 minutes to the gentleman from New 
York (Mr. Jeffries), a distinguished member of the Judiciary Committee.
  Mr. JEFFRIES. Mr. Speaker, I thank the ranking member for yielding, 
as well as for his tremendous leadership, and Chairman Goodlatte, 
Congressman Collins, Congressman Nadler, as well as the Protect Trade 
Secrets Coalition, for their tremendous work in getting us to this 
point where we are on the verge of passing this very important piece of 
legislation.
  Whether it is the original recipe created by Colonel Sanders in 
connection with Kentucky Fried Chicken or whether it is the special 
sauce made famous by the iconic Big Mac of McDonald's or whether it is 
Corning's glass that is so frequently used and found in many of our 
smartphones all across the country, trade secrets are as American as 
baseball and apple pie. Unfortunately, we have found ourselves, over 
the last few years, in a situation where trade secret theft has become 
a significant problem, by some accounts costing us in excess of $300 
billion per year and more than 2 million jobs annually.
  Traditionally, trade secret theft has been dealt with on the civil 
side as a matter of State law. But because of the increasing nature of 
the problem and

[[Page 5218]]

the fact that it is both multistate and multinational in nature, the 
State law domain has become inadequate, which brings us to this piece 
of legislation that would create a Federal civil cause of action for 
trade secret misappropriation, giving our companies and stakeholders 
access to a uniform body of law that can deal with trade secret theft 
in a more appropriate fashion.
  That is why this piece of legislation is so significant in this 
climate and why I am so thankful for the leadership of all those who 
have brought us to this point. I urge everyone to support this bill.
  Mr. CONYERS. Mr. Speaker, I yield back the balance of my time.
  Mr. GOODLATTE. Mr. Speaker, I yield myself the balance of my time.
  In closing, Mr. Speaker, I want to thank my fellow Judiciary 
Committee colleagues and their staffs who have devoted much time and 
energy and intellect to this project. We have worked together for the 
common goal of improving our Nation's trade secret laws for the past 2 
years.
  I want to particularly thank Representatives Doug Collins, Jerrold 
Nadler, and the over 150 Members of Congress who joined as cosponsors 
of this legislation in the House. In the Senate, we have worked closely 
with Senators Hatch, Grassley, Leahy, Coons, and others, and I want to 
thank them and their staffs for their contributions to this effort.
  Furthermore, I would like to thank the White House and the U.S. 
Patent and Trademark Office for working collaboratively with us, as 
well as the Protect Trade Secrets Coalition for its work on this 
effort. I also want to thank my staff for all their hard work on this 
important legislation.
  This bill is the product of years of bipartisan, bicameral work, and 
it will have a positive impact on U.S. competitiveness, job creation, 
and our Nation's future economic security. I urge my colleagues to 
support S. 1890.
  Mr. Speaker, I yield back the balance of my time.
  Ms. JACKSON LEE. Mr. Speaker, I rise in strong support of S. 1890, 
the ``Defend Trade Secrets Act of 2016''.
  S. 1890, amends the, ``Economic Espionage Act of 1996,'' to create a 
federal civil remedy for trade secret misappropriation, and expedite ex 
parte seizure of trade secrets to preserve evidence or prevent 
dissemination, without preempting state law.
  ``Trade secrets'' are the form of intellectual property that protect 
confidential information, including: marketing data and strategies, 
manufacturing processes or techniques, confidential and chemical 
formulae, product design, customer lists, business leads, pricing 
schedules, and sales techniques.
  Trade secret law offers protection from trade secret 
``misappropriation,'' which is the unauthorized acquisition, use, or 
disclosure of such secrets obtained by some improper means.
  Under U.S. law, trade secrets consist of three parts: (i) information 
that is non-public; (2) the reasonable measures taken to protect that 
information; and (3) the fact that the information derives independent 
economic value from not being publicly known.
  American companies are at the forefront of innovation and have some 
of the largest trade secret and patent portfolios in the world tied to 
numerous goods and services offered to governments, commercial 
enterprises, and consumers around the globe.
  In fact, patent portfolios often grow as a result of the ideas and 
products that originated as trade secrets.
  President Obama's Administration identified the importance of this 
legislation and, ``strongly supports the Defend Trade Secrets Act,'' 
because he recognizes that as the United States continues to shift from 
a manufacturing, to a knowledge- and service-based economy, businesses 
increasingly depend on trade secrets to protect their confidential 
know-how.
  A 2009 estimate placed the value of trade secrets owned by U.S. 
companies at five trillion dollars, demonstrating that trade secrets 
have become an increasingly important part of most companies' overall 
assets.
  But, the global economy creates a competitive environment in which 
companies struggle to safeguard this information in light of innovative 
technologies, such as cell phones, which allow nearly anyone to 
photograph or otherwise record data and send information nearly 
instantaneously.
  A 2013 report, by the Commission on the Theft of American 
Intellectual Property, estimated that the American economy loses more 
than $300 billion annually as a result of theft of intellectual 
property, largely trade secrets, leading to a loss of up to 2.1 million 
jobs each year.
  The same theft is slowing U.S. economic growth and diminishing the 
incentive to innovate that we celebrate today.
  Our companies pour billions of dollars into research and development, 
creating products and services that ultimately become the backbone of 
their businesses.
  And rightly so, those trade secrets produced through research and 
development increasingly have become the attractive envy of competitors 
in other countries.
  In addition, advances in technology now make it easy to copy trade 
secret materials onto a jump drive or laptop computer that in a world 
of less advanced technology would have taken reams of paper to 
reproduce.
  Modernization of trade secrets law is long overdue if our legislation 
is to keep pace with the rapid developments of premier American 
companies and the technologies and methodologies used by the criminals 
who target them.
  The patchwork of state trade secrets laws, while effective for local 
theft, fail to meet the demands of the global nature of today's trade 
secret misappropriations.
  In addition, trade secrets do not enjoy the same federal protections 
as other types of intellectual property. While it is a federal crime to 
steal a trade secret, unlike patents, copyrights and trademarks, there 
is no current federal civil remedy.
  This confidential business information can be protected for an 
unlimited time, unlike patents, and requires no formal registration 
process.
  But unlike patents, once this information is disclosed it instantly 
loses its value and the property right itself ceases to exist, 
demonstrating a stark difference in the potential consequences of 
securing patent protections versus keeping an innovation as a trade 
secret.
  When an inventor seeks patent protection, he or she agrees to 
disclose to the world their invention and how it works, furthering 
innovation and research, as well as securing a 20-year exclusive term 
of protection, and the right to prevent others from making, using, 
selling, importing, or distributing a patented invention without 
permission.
  However, in contrast by maintaining it as a trade secret, an inventor 
could theoretically keep their invention secret indefinitely (ex: 
formula for Coca-Cola; the KFC Colonel's Secret Recipe); but, the 
downside is there is no protection if the trade secret is uncovered by 
others through reverse engineering or independent development.
  Trade secrets must be valiantly guarded because discovery of a trade 
secret by fair, lawful methods, such as reverse engineering or 
independent development, is permitted.
  As a result, the threat posed to American trade secrets has increased 
and theft of these secrets robs our economy of growth and innovation. 
S. 1890, provides a solution to these problematic gaps by making 
federal law more comprehensive and providing trade secrets owners with 
remedies that all forms of intellectual property should be afforded.
  With both a federal criminal and a federal civil cause of action, 
large and small companies alike will have access to more of the tools 
that they need to effectively combat trade secret theft and help to 
ensure future innovation continues to occur within the United States.
  While trade secret protection is important domestically, as American 
companies expand in the global marketplace, this protection is also 
paramount worldwide.
  As we operate in other countries and work with them to encourage 
strong intellectual property protection within their own borders, the 
``Defend Trade Secrets Act'' will serve as a model for effective 
protection.
  S. 1890 will prevent the occurrence of (1) trade secret theft 
occurring in the United States and around the world; and (2) trade 
secret theft harming owner companies and their employees; while 
allowing the ``Economic Espionage Act of 1996'' to continue to apply 
broadly to protect trade secrets from theft.
  I thank the House Judiciary Committee for quickly approving this 
legislation, and look forward to seeing this bill pass in the House to 
move to the President's desk to become law.
  Mr. Speaker, I thank our Leadership for its prowess on intellectual 
property protection and urge you and your colleagues to support S. 
1890.

                                              Chamber of Commerce,


                                     United States of America,

                                   Washington, DC, April 26, 2016.
       To The Members of the U.S. House of Representatives: The 
     U.S. Chamber of Commerce, the world's largest business 
     federation representing the interests of more than three 
     million businesses of all sizes, sectors, and regions, as 
     well as state and local chambers and industry associations, 
     and dedicated to promoting, protecting, and

[[Page 5219]]

     defending America's free enterprise system, strongly supports 
     S. 1890, the ``Defend Trade Secrets Act of 2016,'' and urges 
     the House to expeditiously pass this bill.
       Intellectual property sector industries generate 35% of all 
     U.S. Gross Domestic Product and are responsible for two-
     thirds of all exports and over forty million good-paying 
     jobs. The threat of trade secrets theft is of increasing 
     concern to U.S. economic security and domestic jobs, and S. 
     1890 would provide companies with an effective tool to combat 
     this growing problem. Creating a federal civil cause of 
     action to complement existing criminal remedies and providing 
     a uniform system and legal framework would enable companies 
     to better mitigate the commercial injury and loss of 
     employment that often occur when trade secrets are stolen.
       The Chamber appreciates the House's attention to this 
     important issue that impacts companies that depend on 
     intellectual property to spur innovation, create jobs, and 
     bring new products to market that benefit consumers. By 
     creating a federal civil remedy for trade secrets theft, this 
     bill would help ensure the trade secrets of U.S. companies 
     are given similar protections afforded to other forms of 
     intellectual property including patents, trademarks, and 
     copyrights.
       The Chamber urges you to support S. 1890 and may consider 
     votes on, or in relation to, this bill in our annual How They 
     Voted scorecard.
           Sincerely,
                                                  R. Bruce Josten.

  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Virginia (Mr. Goodlatte) that the House suspend the 
rules and pass the bill, S. 1890.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Mr. GOODLATTE. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further 
proceedings on this motion will be postponed.

                          ____________________