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Theft of Trade Secrets Clarification Act of 2012

Floor Speech

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Ms. JACKSON LEE of Texas. Mr. Speaker, I rise today in support of S. 3642, the ``Theft of Trade Secrets Clarification Act of 2012,'' a bill that simply clarifies a provision of the Economic Espionage Act for the purpose of protecting American business and jobs.

More specifically, S. 3642 would broaden language in the Economic Espionage Act so that it protects businesses from trade secret theft to the extent that it was originally intended to rather than the narrow scope applied by a recent Second Circuit court opinion.

In United States v. Aleynikov (April 2012 decision), the Second Circuit overturned the conviction of a defendant who was found guilty of stealing computer code from his employer. The reason for this reversal was that the court determined that the theft of the trade secret did not meet the interstate commerce threshold delineated in the Economic Espionage Act.

Even though the Defendant copied stolen code from his New York office to a computer server in Germany, downloaded the code in New Jersey, and then took the code with him to his new job in Illinois, the Second Circuit found that the stolen trade secret was not part of a product that was produced for or placed in interstate commerce and, therefore, was not the subject of this criminal provision of the Economic Espionage Act.

Effective protection of intellectual property rights, including trade secrets, is essential for fostering innovation. Innovation typically requires substantial investment in education, research and development, and labor to bring a new idea to the marketplace.

The fact that the stolen computer code, which was proprietary, was not produced to be placed in interstate commerce should not preclude a guilty verdict from being rendered.

Businesses often spent time and money to develop their own proprietary software to be used internally; if others can steal their idea, it undermines the creator's ability to recoup the cost of his or her innovative investment, and the incentive to innovate is reduced.

These innovations add value to the overall business, even if they are not commercial end-products themselves. The language contained in this bill will fix the problem so that trade secret thieves cannot take advantage of the loophole in the Economic Espionage Act.

For that reason, I urge my colleagues to support S. 3642, the ``Theft of Trade Secrets Clarification Act of 2012.''

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