Defend Trade Secrets Act of 2014

Summary: Defend Trade Secrets Act of 2014 - Amends the federal criminal code to authorize an owner of a trade secret who is aggrieved by an act of economic espionage, theft of a trade secret, or misappropriation of a trade secret that is related to a product or service used in, or intended for use in, interstate or foreign commerce to bring a civil action under this Act (current law authorizes the Attorney General to bring a civil action to obtain injunctive relief against any violation of provisions regarding the protection of trade secrets). Authorizes the court, based on an affidavit or verified complaint satisfying the requirements of this Act, upon ex parte application and if the court finds that issuing the order is necessary to prevent irreparable harm, to issue appropriate orders: (1) providing for the preservation of evidence in the civil action, including by making a copy of an electronic storage medium that contains the trade secret; (2) granting an injunction to prevent any actual or threatened violation, (3) requiring affirmative actions to be taken to protect a trade secret; or (4) providing for the seizure of any property used to commit or facilitate the commission of an alleged violation, except that such an order may not provide for the seizure of any property that is merely incidental to the alleged violation unless necessary to preserve evidence or shall provide for the seizure of any property in a manner that does not interrupt normal and legitimate business operations unrelated to the trade secret. Makes applicable to such ex parte applications and seizure orders specified requirements of the Trademark Act of 1946 regarding ex parte applications and seizure orders in civil actions arising out of the use of counterfeit marks in connection with the sale, offering for sale, or distribution of goods or services.  Authorizes a court in a civil action brought under this Act to: (1) grant an injunction to prevent any violation, to require affirmative actions to be taken to protect a trade secret, and to condition future use upon payment of a reasonable royalty for no longer than the period use could have been prohibited; (2) award damages for actual loss, damages for unjust enrichment, and (in lieu of damages measured by any other methods) damages caused by misappropriation measured by imposition of liability for a reasonable royalty for the unauthorized disclosure or use of a trade secret; (3) award exemplary treble damages if the trade secret is willfully or maliciously misappropriated; and (4) award reasonable attorney's fees to the prevailing party if a claim of misappropriation is made in bad faith, a motion to terminate an injunction is made or opposed in bad faith, or a trade secret is willfully and maliciously misappropriated. Establishes a five-year limitations period, beginning when the misappropriation is discovered or should have been discovered.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Defend Trade Secrets Act of 2014''.

SEC. 2. FEDERAL JURISDICTION FOR THEFT OF TRADE SECRETS.

    (a) In General.--Section 1836 of title 18, United States Code, is 
amended to read as follows:
``Sec. 1836. Civil proceedings
    ``(a) Private Civil Actions.--
            ``(1) In general.--An owner of a trade secret may bring a 
        civil action under this subsection if the person is aggrieved 
        by--
                    ``(A) a violation of section 1831(a) or 1832(a); or
                    ``(B) a misappropriation of a trade secret that is 
                related to a product or service used in, or intended 
                for use in, interstate or foreign commerce.
            ``(2) Civil ex parte order for preservation of evidence and 
        seizure.--
                    ``(A) In general.--Based on an affidavit or 
                verified complaint satisfying the requirements of this 
                paragraph, the court may, upon ex parte application and 
                if the court finds that issuing the order is necessary 
                to prevent irreparable harm, issue appropriate orders--
                            ``(i)(I) providing for the preservation of 
                        evidence in a civil action brought under 
                        paragraph (1), including by making a copy of an 
                        electronic storage medium that contains the 
                        trade secret; or
                            ``(II) described in clause (i) or (ii) of 
                        paragraph (3)(A); and
                            ``(ii) providing for the seizure of any 
                        property used, in any manner or part, to commit 
                        or facilitate the commission of a violation 
                        alleged under subparagraph (A), except that the 
                        order--
                                    ``(I) may not provide for the 
                                seizure of any property that is merely 
                                incidental to the alleged violation 
                                unless necessary to preserve evidence; 
                                or
                                    ``(II) shall provide for the 
                                seizure of any property in a manner 
                                that, to the extent possible, does not 
                                interrupt normal and legitimate 
                                business operations unrelated to the 
                                trade secret.
                    ``(B) Requirements for application order.--
                Notwithstanding rule 65 of the Federal Rules of Civil 
                Procedure, the requirements in paragraphs (2) through 
                (11) of section 34(d) of the Trademark Act of 1946 (15 
                U.S.C. 1116) shall apply to any ex parte application or 
                seizure order under subparagraph (A). Any reference in 
                such paragraphs (2) through (11) of section 34(d) of 
                the Trademark Act of 1946 to section 32 of such Act 
                shall be read as references to this section, and 
                references to use of a counterfeit mark in connection 
                with the sale, offering for sale, or distribution of 
                goods or services shall be read as references to a 
                misappropriation of a trade secret.
            ``(3) Remedies.--In a civil action brought under this 
        subsection, a court may--
                    ``(A) grant an injunction--
                            ``(i) to prevent any actual or threatened 
                        violation described in paragraph (1) on such 
                        terms as the court deems reasonable;
                            ``(ii) if determined appropriate by the 
                        court, requiring affirmative actions to be 
                        taken to protect a trade secret; and
                            ``(iii) in exceptional circumstances that 
                        render an injunction inequitable, that 
                        conditions future use upon payment of a 
                        reasonable royalty for no longer than the 
                        period of time for which use could have been 
                        prohibited;
                    ``(B) award--
                            ``(i) damages for actual loss caused by the 
                        misappropriation of a trade secret;
                            ``(ii) damages for any unjust enrichment 
                        caused by the misappropriation of the trade 
                        secret that is not addressed in computing 
                        damages for actual loss; and
                            ``(iii) in lieu of damages measured by any 
                        other methods, the damages caused by 
                        misappropriation measured by imposition of 
                        liability for a reasonable royalty for a 
                        misappropriator's unauthorized disclosure or 
                        use of a trade secret;
                    ``(C) if the trade secret described in paragraph 
                (1)(B) is willfully or maliciously misappropriated, 
                award exemplary damages in an amount not more than 3 
                times the amount of the damages awarded under 
                subparagraph (B); and
                    ``(D) if a claim of misappropriation is made in bad 
                faith, a motion to terminate an injunction is made or 
                opposed in bad faith, or a trade secret is willfully 
                and maliciously misappropriated, award reasonable 
                attorney's fees to the prevailing party.
    ``(b) Jurisdiction.--The district courts of the United States shall 
have original jurisdiction of civil actions brought under this section.
    ``(c) Period of Limitations.--A civil action under this section may 
not be commenced later than 5 years after the date on which the 
misappropriation 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), 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 or 
                independent derivation; 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) Technical and Conforming Amendment.--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) 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.