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[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 1770 Introduced in Senate (IS)]

113th CONGRESS
  1st Session
                                S. 1770

        To provide for Federal civil liability for trade secret 
               misappropriation in certain circumstances.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                           November 21, 2013

   Mr. Flake introduced the following bill; which was read twice and 
               referred to the Committee on the Judiciary

_______________________________________________________________________

                                 A BILL

 
        To provide for Federal civil liability for trade secret 
               misappropriation in certain circumstances.

    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 ``Future of American Innovation and 
Research Act of 2013'' or the ``FAIR Act''.

SEC. 2. DEFINITIONS.

    In this Act--
            (1) the term ``covered trade secret'' means a trade secret 
        that is related to or included in a product or service that is 
        used in or reasonably anticipated to be used in interstate or 
        foreign commerce;
            (2) the term ``improper means''--
                    (A) includes theft, bribery, misrepresentation, 
                breach or inducement of a breach of a duty to maintain 
                secrecy, and espionage through electronic or other 
                means; and
                    (B) does not include reverse engineering or 
                independent derivation alone;
            (3) the term ``misappropriate'' means--
                    (A) to acquire a trade secret of another by 
                improper means, if the person who acquires the trade 
                secret knows or has reason to know that the acquisition 
                is by improper means; or
                    (B) to disclose or use a trade secret of another 
                without express or implied consent, if the person who 
                discloses or uses the trade secret--
                            (i) used improper means to acquire 
                        knowledge of the trade secret; or
                            (ii) at the time of the disclosure or use, 
                        knows or has reason to know that his or her 
                        knowledge of the trade secret was--
                                    (I) derived from or through a 
                                person who used improper means to 
                                acquire the trade secret;
                                    (II) acquired under circumstances 
                                giving rise to a duty to maintain the 
                                secrecy, 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, 
                                or limit the use, of the trade secret;
            (4) the term ``person'' means a natural person, 
        corporation, business trust, estate, trust, partnership, 
        limited liability company, association, joint venture, 
        government, governmental subdivision or agency, or any other 
        legal or commercial entity; and
            (5) the term ``trade secret'' means any information, 
        including a formula, pattern, compilation, program, device, 
        method, technique, or process, that--
                    (A) derives independent economic value, actual or 
                potential, from not being generally known to, and not 
                being readily ascertainable through proper means by, 
                the public or other persons who can obtain economic 
                value from the disclosure or use of the information; 
                and
                    (B) is the subject of efforts that are reasonable 
                under the circumstances to maintain the secrecy of the 
                information.

SEC. 3. CIVIL ACTION.

    (a) In General.--The owner or lawful possessor of a covered trade 
secret may bring a civil action against a person who misappropriates, 
threatens to misappropriate, or conspires to misappropriate the covered 
trade secret--
            (1) while located outside the territorial jurisdiction of 
        the United States; or
            (2) on behalf of, or for the benefit of, a person located 
        outside the territorial jurisdiction of the United States.
    (b) Federal Court Jurisdiction.--The district courts of the United 
States shall have exclusive jurisdiction of a civil action under this 
Act.
    (c) Extraterritoriality.--A civil action under this Act may arise 
from conduct outside the territorial jurisdiction of the United States 
if the conduct, either by itself or in combination with conduct within 
the territorial jurisdiction of the United States, causes or is 
reasonably anticipated to cause an injury--
            (1) within the territorial jurisdiction of the United 
        States; or
            (2) to a United States person.

SEC. 4. REMEDIES.

    In a civil action brought under this Act, a court may--
            (1) issue--
                    (A) an order for appropriate injunctive relief 
                against any conduct described in section 3(a);
                    (B) an order requiring affirmative actions to be 
                taken to protect a covered trade secret from further 
                misappropriation; and
                    (C) if the court determines that it would be 
                unreasonable to prohibit further possession, 
                disclosure, or use of a covered trade secret, an order 
                requiring payment of a reasonable royalty for any 
                ongoing disclosure or use of a covered trade secret, in 
                addition to the damages described in paragraph (2);
            (2) award--
                    (A) damages for actual loss caused by the 
                misappropriation of a covered trade secret; and
                    (B) damages for any unjust enrichment caused by the 
                misappropriation of a covered trade secret that is not 
                addressed in computing damages for actual loss under 
                subparagraph (A);
            (3) if a trade secret is willfully or maliciously 
        misappropriated, award punitive or exemplary damages in an 
        amount not more than twice the amount of the damages awarded 
        under paragraph (2); and
            (4) 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 or maliciously 
        misappropriated, award reasonable costs and attorney's fees to 
        the prevailing party.

SEC. 5. PROCEDURE.

    (a) Pleadings.--
            (1) Complaint.--A complaint filed in a civil action brought 
        under this Act shall include a sworn representation by the 
        plaintiff that the dispute involves conduct described in 
        section 3(a).
            (2) Affirmative defense.--It shall be an affirmative 
        defense in a civil action brought under this Act that each 
        alleged covered trade secret in dispute was readily 
        ascertainable through proper means by other persons who did not 
        already know the covered trade secret at the time of any 
        alleged misappropriation, threat to misappropriate, or 
        conspiracy to misappropriate.
    (b) Forum Non Conveniens.--In considering a motion to dismiss or 
stay on forum non conveniens grounds filed in a civil action brought 
under this Act, a court shall--
            (1) give great weight to the plaintiff's choice of forum; 
        and
            (2) consider whether the plaintiff reasonably could receive 
        fair and impartial treatment in the courts of the jurisdiction 
        in which the defendant is domiciled.
    (c) Anti-Suit Injunctions.--In a civil action brought under this 
Act, the court may enter an injunction enjoining a defendant over whom 
the court has personal jurisdiction from pursuing subsequently filed 
litigation in another jurisdiction if--
            (1) the parties are the same in both matters;
            (2) the resolution of the case before the enjoining court 
        will be dispositive of the action to be enjoined; and
            (3) the action in the other jurisdiction threatens the 
        jurisdiction of the court or the purposes of this Act.
    (d) Confidentiality.--In any proceeding relating to a civil action 
brought under this Act, the court shall enter any order and take any 
other action that is necessary and appropriate to preserve the 
confidentiality of trade secrets, consistent with the requirements of 
the Federal Rules of Civil Procedure, the Federal Rules of Evidence, 
and all other applicable laws.
    (e) Statute of Limitations.--A civil action brought under this Act 
may not be commenced later than 3 years after the date on which the 
conduct described in section 3(a) that forms the basis for the action 
was discovered or by the exercise of reasonable diligence should have 
been discovered.

SEC. 6. SEIZURES.

    (a) In General.--In a civil action brought under this Act, the 
court may, upon ex parte application and if the requirements under 
subsection (b) are satisfied, issue an order (referred to in this 
section as a ``seizure order'') providing for--
            (1) the seizure of any property (including computers) used, 
        in any manner or part, to commit or facilitate the commission 
        of conduct described in section 3(a) that is alleged in the 
        civil action; and
            (2) the preservation of evidence in the civil action.
    (b) Requirements.--A court may issue a seizure order if--
            (1) the applicant provides security in an amount that the 
        court determines is adequate to pay any damages a person may be 
        entitled to recover as a result of a wrongful seizure or 
        wrongful attempted seizure under this section; and
            (2) the court finds that specific facts clearly show that--
                    (A) any order other than an ex parte seizure order 
                is not adequate to effectively cause the cessation of 
                the conduct described in section 3(a) that forms the 
                basis of the action;
                    (B) the applicant has not publicized the requested 
                seizure;
                    (C) the applicant is likely to succeed in showing 
                that the person against whom seizure is sought 
                misappropriated, threatened to misappropriate, or 
                conspired to misappropriate a covered trade secret of 
                which the applicant is the owner or lawful possessor;
                    (D) the applicant will suffer an immediate and 
                irreparable injury if a seizure is not ordered;
                    (E) the matter to be seized is located at the place 
                identified in the application;
                    (F) the harm to the applicant that would be caused 
                by denying the application outweighs the harm to the 
                legitimate interests of the person against whom seizure 
                is sought that would be caused by granting the 
                application; and
                    (G) if the applicant were to proceed on notice to 
                the person against whom seizure is sought, that person, 
                or persons acting in concert with that person, would 
                destroy, move, hide, or otherwise make the matter to be 
                seized inaccessible to the court.
    (c) Procedure.--A seizure order shall--
            (1) direct that service of a copy of the seizure order 
        shall be made by a Federal law enforcement officer (such as a 
        United States marshal), who, upon making service, shall carry 
        out the seizure under the seizure order;
            (2) direct that any items seized shall be taken into the 
        custody of the court;
            (3) include a protective order with respect to items 
        seized, to ensure that confidential, private, proprietary, or 
        privileged information contained in the items seized, including 
        any such information belonging to the defendant and third 
        parties, is appropriately protected and that access to the 
        items seized is appropriately restricted; and
            (4) specify a hearing date, not earlier than 3 days and not 
        later than 10 days after the seizure order is issued, for the 
        court to review whether the items seized should remain in the 
        custody of the court.
    (d) Order Under Seal.--
            (1) In general.--Except as provided under paragraph (2), a 
        seizure order, together with any supporting documents, shall be 
        sealed until the person against whom the seizure order is 
        directed has an opportunity to contest the seizure order.
            (2) Access after seizure.--A court shall allow a person 
        against whom a seizure order is directed to have access to the 
        seizure order and any supporting documents after the seizure is 
        carried out.
    (e) Seizure Hearing.--
            (1) Date.--A court that issues a seizure order shall hold a 
        hearing under this subsection on the date set by the court 
        under subsection (c)(4) unless a party shows good cause for 
        setting a different date.
            (2) Burden of proof.--At a hearing under this subsection, 
        the party that obtained the seizure order shall have the burden 
        of proving that the factual and legal grounds necessary to 
        support the seizure order are still in effect.
            (3) Dissolution or modification of order.--If a party fails 
        to meet the burden specified under paragraph (2), the court 
        shall dissolve or modify the seizure order appropriately.
            (4) Discovery time limits.--The court may issue an order 
        modifying the time limits for discovery under the Federal Rules 
        of Civil Procedure as necessary to prevent the frustration of 
        the purposes of a hearing under this subsection.
    (f) Injured Party.--
            (1) Cause of action.--A party that is injured by a seizure 
        carried out in a civil action brought under this Act and that 
        prevails in the civil action may bring a civil action under 
        this subsection against the applicant for the seizure order in 
        a district court of the United States.
            (2) Remedies.--A party that prevails in a civil action 
        brought under this subsection shall recover--
                    (A) reasonable costs and attorney's fees incurred 
                in defense against the seizure order described in 
                paragraph (1) unless the court finds that extenuating 
                circumstances merit denying such costs and fees; and
                    (B) lost profits and punitive damages if the 
                seizure order described in paragraph (1) was sought in 
                bad faith.
                                 <all>
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