WASHINGTON – Today, the Senate unanimously passed the Defend Trade Secrets Act, legislation introduced by U.S. Senators Chris Coons (D-Del.) and Orrin Hatch (R-Utah), both members of the Senate Judiciary Committee, to help combat the loss of hundreds of billions of dollars each year in the United States to the theft of corporate trade secrets. Trade secrets—such as customer lists, formulas, and manufacturing processes—are an essential form of intellectual property, but they are the only form of U.S. intellectual property that businesses cannot take federal legal action to protect in the event of misuse or theft.  Currently, trade secret owners must rely on state courts or federal prosecutors to protect their rights.

The bill is expected to pass the House of Representatives and receive the President’s signature in the coming weeks. 

"Passage of this legislation is not only a critical victory for the intellectual property and business communities, but also an example of what Congress can accomplish when we put party politics aside and focus on areas of agreement," Senator Hatch said. "Throughout my Senate service I have always sought, whenever possible, to seek common ground in order to advance public policy priorities that will benefit the American people and the American economy. With this bill, we have done just that." 

“For too long, businesses in Delaware and across the country that drive our country’s innovation and economic growth have been losing jobs and revenue because their trade secrets are open to theft,” said Senator Coons. “I’m thrilled the Senate came together in a bipartisan way to pass our bill that will finally give trade secrets the same legal protections that other forms of critical intellectual property enjoy.  It’s a long overdue update that will empower American companies to protect their jobs in the 21st century. I urge the House to pass this bill now so the President can sign it into law as soon as possible.” 

“As an innovator, DuPont depends on intellectual property protection—including trade secrets,” said Karen Cochran, Associate General Counsel and Chief IP Counsel, DuPont, in testimony to the committee. “Realizing the full potential of our innovation often includes knowledge-building that can span decades. This work generates a range of intellectual property from patents to trade secrets. DuPont recently defended the trade secrets for one of our well-known products, Kevlar®. This experience reinforces the importance of S. 1890 and updating trade secret protection and remedies.”

"Adesis is grateful to Senator Coons for his work on the trade secrets legislation," said Andrew Cottone, President of Chemistry for Adesis. "Twelve years ago we were the victims of such theft.  We witnessed firsthand the job loss, financial loss and technical destruction these actions can have on large and small American companies alike.  Adesis is hopeful that with the help of Senators Coons and this legislation, no other companies will have to relive our experiences."

Background 

In today’s electronic age, trade secrets can be stolen with a few keystrokes, and increasingly, they are stolen at the direction of a foreign government or for the benefit of a foreign competitor. These losses put U.S. jobs at risk and threaten incentives for continued investment in research and development.

Current federal criminal law is insufficient. Although the Economic Espionage Act of 1996 made trade secret theft a crime, the Department of Justice lacks the resources to prosecute many such cases. State-level civil trade secret laws alone have not been sufficient to stop interstate theft. Federal courts are better suited to working across state and national boundaries to facilitate discovery, serve defendants or witnesses, or prevent a party from leaving the country. Laws also vary state-to-state, making it difficult for U.S. companies to craft consistent policies. 

The Defend Trade Secrets Act

  • Creates a uniform federal standard for trade secret misappropriation. A company can craft one set of nondisclosure policies secure in the knowledge that its trade secrets will be protected by federal law.
  • Provides for injunctions and damages, including a narrow, but powerful, ex parte seizure authority when it is needed to prevent the disclosure or further dissemination of a stolen trade secret. The bill also authorizes appropriate final monetary and injunctive relief to account for the economic harm to American companies whose trade secrets are stolen, while also safeguarding the freedom of employees to move from one job to another.
  •  Is consistent with the remedies provided for other forms of intellectual property, such as patents, trademarks and copyrights, which are all covered by federal civil law. 

 

The bill is supported by ACTI, Adesis, Adobe, AdvaMed, the Alliance of Automobile Manufacturers, AIPLA, the Association of Global Automakers, Inc., Biotechnology Industry Organization (BIO), The Boeing Company, Boston Scientific, BSA | The Software Alliance (BSA), Caterpillar Inc., Corning Incorporated, The Dow Chemical Company, DuPont, Eli Lilly and Company, Exxon Mobil Corporation, Fiber to the Home Council Americas, Ford Motor Company, General Electric, Honda, IBM, Illinois Tool Works Inc., Information Technology Industry Council (ITI),  The Intellectual Property Owners Association (IPO), International Fragrance Association, North America, Internet Commerce Coalition (ICC), Johnson & Johnson, Medical Device Manufacturers Association (MDMA), Medtronic, Michelin, Micron, Microsoft, Monsanto, National Alliance for Jobs and Innovation (NAJI), National Association of Manufacturers (NAM), National Foreign Trade Council, New England Council, NIKE, Pfizer, Philips Light, The Procter & Gamble Company, Royal Philips, SAS, Semiconductor Industry Association (SIA), Siemens Corporation, Software & Information Industry Association (SIIA), Telecommunications Industry Association (TIA), Texas Association of Business, Texas Association of Manufacturers, U.S. Chamber of Commerce, and United Technologies Corporation.