Statements on Introduced Bills and Joint Resolutions

Floor Speech

By:  Herb Kohl
Date: July 17, 2012
Location: Washington, DC


Mr. KOHL. Mr. President, I rise today to introduce the Protecting American Trade Secrets and Innovation Act of 2012. This legislation will help American companies protect their valuable trade secrets by giving them the additional option of seeking redress in Federal courts when they are victims of economic espionage or trade secret theft. Stolen trade secrets cost American companies billions of dollars each year and threaten their ability to innovate and compete globally. Our bill ensures that companies have the most effective and efficient ways to combat trade secret theft and recoup their losses, helping them to maintain their global competitive edge.

Today, as much as 80 percent of companies' assets are intangible, the majority of them in the form of trade secrets. This includes everything from financial, business, scientific, technical, economic, or engineering information, to formulas, designs, prototypes, processes, procedures, and codes. Trade secrets are often the lifeblood of a business. If they are stolen and wind up in the hands of competitors, it can wipe out years of research and development and cost millions of dollars in losses. The chief executive of GM recently said that he worries about trade secret theft ``every day.'' This comes as no surprise considering the loss to Ford Motor Company in 2006 when an employee stole 4,000 documents which he took to China and used for the benefit of his new employer Beijing Automotive Company, a competitor to Ford. The damage to Ford was estimated to be between $50 million and $100 million.

In 1996, Congress enacted the Economic Espionage Act, which made economic espionage and trade secret theft a Federal crime. Nearly 15 years later, trade secret theft and economic espionage continue to pose a threat to U.S. companies, yet there is no Federal civil remedy for victims. To complement the criminal enforcement of economic espionage and State trade secret laws, the Protecting American Trade Secrets and Innovation Act would provide another avenue for companies to protect their trade secrets. The bill enables victims of trade secret theft to seek injunctive relief, putting an immediate halt to trade secret misappropriation, and compensation for their losses in Federal court. It will help fill a gap in Federal intellectual property law by providing legal protections for non-patentable, non-copyrightable innovations, on the condition that the owner of the innovation has taken reasonable measures to keep the innovation a secret.

Today, companies that fall victim to economic espionage and trade secret theft often can only bring civil actions in State court, under a patchwork of State laws, to stop the harm or seek compensation for losses. While State courts may be a suitable venue in some cases, major trade secret cases will often require tools available more readily in Federal court, such as nationwide service of process for subpoenas, discovery and witness depositions. In addition, for trade secret holders operating nationwide, a single Federal statute can be more efficient than navigating 50 different State laws. Finally, our bill permits judges to issue seizure orders to prevent defendants from destroying evidence. In sum, our bill demonstrates a Federal commitment to trade secret protection by expanding the legal options for victims of economic espionage and trade secret theft.

This legislation will not inundate Federal courts with minor trade secret cases because it includes limits so that only the most serious cases requiring Federal courts will be permitted. These limitations require the victim of trade secret theft to certify that the dispute requires either a substantial need for nationwide service of process or the misappropriation of trade secrets from the U.S. to another country. Finally, it is important to emphasize that our legislation is not intended to replace State trade secret laws, but to complement them to ensure that victims of economic espionage and trade secret misappropriation can get the most prompt, effective and efficient justice.

We cannot take lightly the threat of trade secrets theft to American businesses, American jobs, and American innovation. This legislation is another simple and straightforward step we can take to help companies defend themselves against trade secret theft. It demonstrates our commitment at the Federal level to protect all forms of a business's intellectual property and their innovative spirit.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.


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