IC 

114TH CONGRESS 

2D SESSION S. 1890 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 11, 2016 

Referred to the Committee on the Judiciary 

AN ACT 

To amend chapter 90 of title 18, United States Code, to 

provide Federal jurisdiction for the theft of trade secrets, 

and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Defend Trade Secrets 

3 Act of 2016’’. 

4 SEC. 2. FEDERAL JURISDICTION FOR THEFT OF TRADE SE5 CRETS. 

6 (a) IN GENERAL.—Section 1836 of title 18, United 

7 States Code, is amended by striking subsection (b) and 

8 inserting the following: 

9 ‘‘(b) PRIVATE CIVIL ACTIONS.— 

10 ‘‘(1) IN GENERAL.—An owner of a trade secret 

11 that is misappropriated may bring a civil action 

12 under this subsection if the trade secret is related to 

13 a product or service used in, or intended for use in, 

14 interstate or foreign commerce. 

15 ‘‘(2) CIVIL SEIZURE.— 

16 ‘‘(A) IN GENERAL.— 

17 ‘‘(i) APPLICATION.—Based on an affi18 davit or verified complaint satisfying the 

19 requirements of this paragraph, the court 

20 may, upon ex parte application but only in 

21 extraordinary circumstances, issue an 

22 order providing for the seizure of property 

23 necessary to prevent the propagation or 

24 dissemination of the trade secret that is 

25 the subject of the action. 


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1 ‘‘(ii) REQUIREMENTS FOR ISSUING

2 ORDER.—The court may not grant an ap3 plication under clause (i) unless the court 

4 finds that it clearly appears from specific 

5 facts that— 

6 ‘‘(I) an order issued pursuant to 

7 Rule 65 of the Federal Rules of Civil 

8 Procedure or another form of equi9 table relief would be inadequate to 

10 achieve the purpose of this paragraph 

11 because the party to which the order 

12 would be issued would evade, avoid, or 

13 otherwise not comply with such an 

14 order; 

15 ‘‘(II) an immediate and irrep16 arable injury will occur if such seizure 

17 is not ordered; 

18 ‘‘(III) the harm to the applicant 

19 of denying the application outweighs 

20 the harm to the legitimate interests of 

21 the person against whom seizure 

22 would be ordered of granting the ap23 plication and substantially outweighs 

24 the harm to any third parties who 

25 may be harmed by such seizure; 


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1 ‘‘(IV) the applicant is likely to 

2 succeed in showing that— 

3 ‘‘(aa) the information is a 

4 trade secret; and 

5 ‘‘(bb) the person against 

6 whom seizure would be ordered— 

7 ‘‘(AA) misappropriated 

8 the trade secret of the appli9 cant by improper means; or 

10 ‘‘(BB) conspired to use 

11 improper means to mis12 appropriate the trade secret 

13 of the applicant; 

14 ‘‘(V) the person against whom 

15 seizure would be ordered has actual 

16 possession of— 

17 ‘‘(aa) the trade secret; and 

18 ‘‘(bb) any property to be 

19 seized; 

20 ‘‘(VI) the application describes 

21 with reasonable particularity the mat22 ter to be seized and, to the extent rea23 sonable under the circumstances, 

24 identifies the location where the mat25 ter is to be seized; 


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1 ‘‘(VII) the person against whom 

2 seizure would be ordered, or persons 

3 acting in concert with such person, 

4 would destroy, move, hide, or other5 wise make such matter inaccessible to 

6 the court, if the applicant were to pro7 ceed on notice to such person; and 

8 ‘‘(VIII) the applicant has not 

9 publicized the requested seizure. 

10 ‘‘(B) ELEMENTS OF ORDER.—If an order 

11 is issued under subparagraph (A), it shall— 

12 ‘‘(i) set forth findings of fact and con13 clusions of law required for the order; 

14 ‘‘(ii) provide for the narrowest seizure 

15 of property necessary to achieve the pur16 pose of this paragraph and direct that the 

17 seizure be conducted in a manner that 

18 minimizes any interruption of the business 

19 operations of third parties and, to the ex20 tent possible, does not interrupt the legiti21 mate business operations of the person ac22 cused of misappropriating the trade secret; 

23 ‘‘(iii)(I) be accompanied by an order 

24 protecting the seized property from disclo25 sure by prohibiting access by the applicant 


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1 or the person against whom the order is 

2 directed, and prohibiting any copies, in 

3 whole or in part, of the seized property, to 

4 prevent undue damage to the party against 

5 whom the order has issued or others, until 

6 such parties have an opportunity to be 

7 heard in court; and 

8 ‘‘(II) provide that if access is granted 

9 by the court to the applicant or the person 

10 against whom the order is directed, the ac11 cess shall be consistent with subparagraph 

12 (D); 

13 ‘‘(iv) provide guidance to the law en14 forcement officials executing the seizure 

15 that clearly delineates the scope of the au16 thority of the officials, including— 

17 ‘‘(I) the hours during which the 

18 seizure may be executed; and 

19 ‘‘(II) whether force may be used 

20 to access locked areas; 

21 ‘‘(v) set a date for a hearing described 

22 in subparagraph (F) at the earliest pos23 sible time, and not later than 7 days after 

24 the order has issued, unless the party 

25 against whom the order is directed and 


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1 others harmed by the order consent to an2 other date for the hearing, except that a 

3 party against whom the order has issued 

4 or any person harmed by the order may 

5 move the court at any time to dissolve or 

6 modify the order after giving notice to the 

7 applicant who obtained the order; and 

8 ‘‘(vi) require the person obtaining the 

9 order to provide the security determined 

10 adequate by the court for the payment of 

11 the damages that any person may be enti12 tled to recover as a result of a wrongful or 

13 excessive seizure or wrongful or excessive 

14 attempted seizure under this paragraph. 

15 ‘‘(C) PROTECTION FROM PUBLICITY.—The 

16 court shall take appropriate action to protect 

17 the person against whom an order under this 

18 paragraph is directed from publicity, by or at 

19 the behest of the person obtaining the order, 

20 about such order and any seizure under such 

21 order. 

22 ‘‘(D) MATERIALS IN CUSTODY OF

23 COURT.— 

24 ‘‘(i) IN GENERAL.—Any materials 

25 seized under this paragraph shall be taken 


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1 into the custody of the court. The court 

2 shall secure the seized material from phys3 ical and electronic access during the sei4 zure and while in the custody of the court. 

5 ‘‘(ii) STORAGE MEDIUM.—If the seized 

6 material includes a storage medium, or if 

7 the seized material is stored on a storage 

8 medium, the court shall prohibit the me9 dium from being connected to a network or 

10 the Internet without the consent of both 

11 parties, until the hearing required under 

12 subparagraph (B)(v) and described in sub13 paragraph (F). 

14 ‘‘(iii) PROTECTION OF CONFIDEN15 TIALITY.—The court shall take appropriate 

16 measures to protect the confidentiality of 

17 seized materials that are unrelated to the 

18 trade secret information ordered seized 

19 pursuant to this paragraph unless the per20 son against whom the order is entered con21 sents to disclosure of the material. 

22 ‘‘(iv) APPOINTMENT OF SPECIAL MAS23 TER.—The court may appoint a special 

24 master to locate and isolate all misappro25 priated trade secret information and to faVerDate Sep 11 2014 18:33 Apr 12, 2016 Jkt 059200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S1890.RFH S1890

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1 cilitate the return of unrelated property 

2 and data to the person from whom the 

3 property was seized. The special master 

4 appointed by the court shall agree to be 

5 bound by a non-disclosure agreement ap6 proved by the court. 

7 ‘‘(E) SERVICE OF ORDER.—The court shall 

8 order that service of a copy of the order under 

9 this paragraph, and the submissions of the ap10 plicant to obtain the order, shall be made by a 

11 Federal law enforcement officer who, upon 

12 making service, shall carry out the seizure 

13 under the order. The court may allow State or 

14 local law enforcement officials to participate, 

15 but may not permit the applicant or any agent 

16 of the applicant to participate in the seizure. At 

17 the request of law enforcement officials, the 

18 court may allow a technical expert who is unaf19 filiated with the applicant and who is bound by 

20 a court-approved non-disclosure agreement to 

21 participate in the seizure if the court deter22 mines that the participation of the expert will 

23 aid the efficient execution of and minimize the 

24 burden of the seizure. 

25 ‘‘(F) SEIZURE HEARING.— 


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1 ‘‘(i) DATE.—A court that issues a sei2 zure order shall hold a hearing on the date 

3 set by the court under subparagraph 

4 (B)(v). 

5 ‘‘(ii) BURDEN OF PROOF.—At a hear6 ing held under this subparagraph, the 

7 party who obtained the order under sub8 paragraph (A) shall have the burden to 

9 prove the facts supporting the findings of 

10 fact and conclusions of law necessary to 

11 support the order. If the party fails to 

12 meet that burden, the seizure order shall 

13 be dissolved or modified appropriately. 

14 ‘‘(iii) DISSOLUTION OR MODIFICATION

15 OF ORDER.—A party against whom the 

16 order has been issued or any person 

17 harmed by the order may move the court 

18 at any time to dissolve or modify the order 

19 after giving notice to the party who ob20 tained the order. 

21 ‘‘(iv) DISCOVERY TIME LIMITS.—The 

22 court may make such orders modifying the 

23 time limits for discovery under the Federal 

24 Rules of Civil Procedure as may be nec25 essary to prevent the frustration of the 


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1 purposes of a hearing under this subpara2 graph. 

3 ‘‘(G) ACTION FOR DAMAGE CAUSED BY

4 WRONGFUL SEIZURE.—A person who suffers 

5 damage by reason of a wrongful or excessive 

6 seizure under this paragraph has a cause of ac7 tion against the applicant for the order under 

8 which such seizure was made, and shall be enti9 tled to the same relief as is provided under sec10 tion 34(d)(11) of the Trademark Act of 1946 

11 (15 U.S.C. 1116(d)(11)). The security posted 

12 with the court under subparagraph (B)(vi) shall 

13 not limit the recovery of third parties for dam14 ages. 

15 ‘‘(H) MOTION FOR ENCRYPTION.—A party 

16 or a person who claims to have an interest in 

17 the subject matter seized may make a motion at 

18 any time, which may be heard ex parte, to 

19 encrypt any material seized or to be seized 

20 under this paragraph that is stored on a stor21 age medium. The motion shall include, when 

22 possible, the desired encryption method. 

23 ‘‘(3) REMEDIES.—In a civil action brought 

24 under this subsection with respect to the misappro25 priation of a trade secret, a court may— 


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1 ‘‘(A) grant an injunction— 

2 ‘‘(i) to prevent any actual or threat3 ened misappropriation described in para4 graph (1) on such terms as the court 

5 deems reasonable, provided the order does 

6 not— 

7 ‘‘(I) prevent a person from enter8 ing into an employment relationship, 

9 and that conditions placed on such 

10 employment shall be based on evi11 dence of threatened misappropriation 

12 and not merely on the information the 

13 person knows; or 

14 ‘‘(II) otherwise conflict with an 

15 applicable State law prohibiting re16 straints on the practice of a lawful 

17 profession, trade, or business; 

18 ‘‘(ii) if determined appropriate by the 

19 court, requiring affirmative actions to be 

20 taken to protect the trade secret; and 

21 ‘‘(iii) in exceptional circumstances 

22 that render an injunction inequitable, that 

23 conditions future use of the trade secret 

24 upon payment of a reasonable royalty for 


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1 no longer than the period of time for which 

2 such use could have been prohibited; 

3 ‘‘(B) award— 

4 ‘‘(i)(I) damages for actual loss caused 

5 by the misappropriation of the trade se6 cret; and 

7 ‘‘(II) damages for any unjust enrich8 ment caused by the misappropriation of 

9 the trade secret that is not addressed in 

10 computing damages for actual loss; or 

11 ‘‘(ii) in lieu of damages measured by 

12 any other methods, the damages caused by 

13 the misappropriation measured by imposi14 tion of liability for a reasonable royalty for 

15 the misappropriator’s unauthorized disclo16 sure or use of the trade secret; 

17 ‘‘(C) if the trade secret is willfully and ma18 liciously misappropriated, award exemplary 

19 damages in an amount not more than 2 times 

20 the amount of the damages awarded under sub21 paragraph (B); and 

22 ‘‘(D) if a claim of the misappropriation is 

23 made in bad faith, which may be established by 

24 circumstantial evidence, a motion to terminate 

25 an injunction is made or opposed in bad faith, 


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1 or the trade secret was willfully and maliciously 

2 misappropriated, award reasonable attorney’s 

3 fees to the prevailing party. 

4 ‘‘(c) JURISDICTION.—The district courts of the 

5 United States shall have original jurisdiction of civil ac6 tions brought under this section. 

7 ‘‘(d) PERIOD OF LIMITATIONS.—A civil action under 

8 subsection (b) may not be commenced later than 3 years 

9 after the date on which the misappropriation with respect 

10 to which the action would relate is discovered or by the 

11 exercise of reasonable diligence should have been discov12 ered. For purposes of this subsection, a continuing mis13 appropriation constitutes a single claim of misappropria14 tion.’’. 

15 (b) DEFINITIONS.—Section 1839 of title 18, United 

16 States Code, is amended— 

17 (1) in paragraph (3)— 

18 (A) in subparagraph (B), by striking ‘‘the 

19 public’’ and inserting ‘‘another person who can 

20 obtain economic value from the disclosure or 

21 use of the information’’; and 

22 (B) by striking ‘‘and’’ at the end; 

23 (2) in paragraph (4), by striking the period at 

24 the end and inserting a semicolon; and 

25 (3) by adding at the end the following: 


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1 ‘‘(5) the term ‘misappropriation’ means— 

2 ‘‘(A) acquisition of a trade secret of an3 other by a person who knows or has reason to 

4 know that the trade secret was acquired by im5 proper means; or 

6 ‘‘(B) disclosure or use of a trade secret of 

7 another without express or implied consent by 

8 a person who— 

9 ‘‘(i) used improper means to acquire 

10 knowledge of the trade secret; 

11 ‘‘(ii) at the time of disclosure or use, 

12 knew or had reason to know that the 

13 knowledge of the trade secret was— 

14 ‘‘(I) derived from or through a 

15 person who had used improper means 

16 to acquire the trade secret; 

17 ‘‘(II) acquired under cir18 cumstances giving rise to a duty to 

19 maintain the secrecy of the trade se20 cret or limit the use of the trade se21 cret; or 

22 ‘‘(III) derived from or through a 

23 person who owed a duty to the person 

24 seeking relief to maintain the secrecy 


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1 of the trade secret or limit the use of 

2 the trade secret; or 

3 ‘‘(iii) before a material change of the 

4 position of the person, knew or had reason 

5 to know that— 

6 ‘‘(I) the trade secret was a trade 

7 secret; and 

8 ‘‘(II) knowledge of the trade se9 cret had been acquired by accident or 

10 mistake; 

11 ‘‘(6) the term ‘improper means’— 

12 ‘‘(A) includes theft, bribery, misrepresenta13 tion, breach or inducement of a breach of a 

14 duty to maintain secrecy, or espionage through 

15 electronic or other means; and 

16 ‘‘(B) does not include reverse engineering, 

17 independent derivation, or any other lawful 

18 means of acquisition; and 

19 ‘‘(7) the term ‘Trademark Act of 1946’ means 

20 the Act entitled ‘An Act to provide for the registra21 tion and protection of trademarks used in commerce, 

22 to carry out the provisions of certain international 

23 conventions, and for other purposes, approved July 

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1 ferred to as the ‘‘Trademark Act of 1946’’ or the 

2 ‘‘Lanham Act’’)’.’’. 

3 (c) EXCEPTIONS TO PROHIBITION.—Section 1833 of 

4 title 18, United States Code, is amended, in the matter 

5 preceding paragraph (1), by inserting ‘‘or create a private 

6 right of action for’’ after ‘‘prohibit’’. 

7 (d) CONFORMING AMENDMENTS.— 

8 (1) The section heading for section 1836 of title 

9 18, United States Code, is amended to read as fol10 lows: 

11 ‘‘§ 1836. Civil proceedings’’. 

12 (2) The table of sections for chapter 90 of title 

13 18, United States Code, is amended by striking the 

14 item relating to section 1836 and inserting the fol15 lowing: 

‘‘1836. Civil proceedings.’’. 

16 (e) EFFECTIVE DATE.—The amendments made by 

17 this section shall apply with respect to any misappropria18 tion of a trade secret (as defined in section 1839 of title 

19 18, United States Code, as amended by this section) for 

20 which any act occurs on or after the date of the enactment 

21 of this Act. 

22 (f) RULE OF CONSTRUCTION.—Nothing in the 

23 amendments made by this section shall be construed to 

24 modify the rule of construction under section 1838 of title 


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1 18, United States Code, or to preempt any other provision 

2 of law. 

3 (g) APPLICABILITY TO OTHER LAWS.—This section 

4 and the amendments made by this section shall not be con5 strued to be a law pertaining to intellectual property for 

6 purposes of any other Act of Congress. 

7 SEC. 3. TRADE SECRET THEFT ENFORCEMENT. 

8 (a) IN GENERAL.—Chapter 90 of title 18, United 

9 States Code, is amended— 

10 (1) in section 1832(b), by striking 

11 ‘‘$5,000,000’’ and inserting ‘‘the greater of 

12 $5,000,000 or 3 times the value of the stolen trade 

13 secret to the organization, including expenses for re14 search and design and other costs of reproducing the 

15 trade secret that the organization has thereby avoid16 ed’’; and 

17 (2) in section 1835— 

18 (A) by striking ‘‘In any prosecution’’ and 

19 inserting the following: 

20 ‘‘(a) IN GENERAL.—In any prosecution’’; and 

21 (B) by adding at the end the following: 

22 ‘‘(b) RIGHTS OF TRADE SECRET OWNERS.—The 

23 court may not authorize or direct the disclosure of any 

24 information the owner asserts to be a trade secret unless 

25 the court allows the owner the opportunity to file a subVerDate Sep 11 2014 18:33 Apr 12, 2016 Jkt 059200 PO 00000 Frm 00018 Fmt 6652 Sfmt 6201 E:\BILLS\S1890.RFH S1890

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1 mission under seal that describes the interest of the owner 

2 in keeping the information confidential. No submission 

3 under seal made under this subsection may be used in a 

4 prosecution under this chapter for any purpose other than 

5 those set forth in this section, or otherwise required by 

6 law. The provision of information relating to a trade secret 

7 to the United States or the court in connection with a 

8 prosecution under this chapter shall not constitute a waiv9 er of trade secret protection, and the disclosure of infor10 mation relating to a trade secret in connection with a pros11 ecution under this chapter shall not constitute a waiver 

12 of trade secret protection unless the trade secret owner 

13 expressly consents to such waiver.’’. 

14 (b) RICO PREDICATE OFFENSES.—Section 1961(1) 

15 of title 18, United States Code, is amended by inserting 

16 ‘‘sections 1831 and 1832 (relating to economic espionage 

17 and theft of trade secrets),’’ before ‘‘section 1951’’. 

18 SEC. 4. REPORT ON THEFT OF TRADE SECRETS OCCUR19 RING ABROAD. 

20 (a) DEFINITIONS.—In this section: 

21 (1) DIRECTOR.—The term ‘‘Director’’ means 

22 the Under Secretary of Commerce for Intellectual 

23 Property and Director of the United States Patent 

24 and Trademark Office. 


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1 (2) FOREIGN INSTRUMENTALITY, ETC.—The 

2 terms ‘‘foreign instrumentality’’, ‘‘foreign agent’’, 

3 and ‘‘trade secret’’ have the meanings given those 

4 terms in section 1839 of title 18, United States 

5 Code. 

6 (3) STATE.—The term ‘‘State’’ includes the 

7 District of Columbia and any commonwealth, terri8 tory, or possession of the United States. 

9 (4) UNITED STATES COMPANY.—The term 

10 ‘‘United States company’’ means an organization or11 ganized under the laws of the United States or a 

12 State or political subdivision thereof. 

13 (b) REPORTS.—Not later than 1 year after the date 

14 of enactment of this Act, and biannually thereafter, the 

15 Attorney General, in consultation with the Intellectual 

16 Property Enforcement Coordinator, the Director, and the 

17 heads of other appropriate agencies, shall submit to the 

18 Committees on the Judiciary of the House of Representa19 tives and the Senate, and make publicly available on the 

20 Web site of the Department of Justice and disseminate 

21 to the public through such other means as the Attorney 

22 General may identify, a report on the following: 

23 (1) The scope and breadth of the theft of the 

24 trade secrets of United States companies occurring 

25 outside of the United States. 


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1 (2) The extent to which theft of trade secrets 

2 occurring outside of the United States is sponsored 

3 by foreign governments, foreign instrumentalities, or 

4 foreign agents. 

5 (3) The threat posed by theft of trade secrets 

6 occurring outside of the United States. 

7 (4) The ability and limitations of trade secret 

8 owners to prevent the misappropriation of trade se9 crets outside of the United States, to enforce any 

10 judgment against foreign entities for theft of trade 

11 secrets, and to prevent imports based on theft of 

12 trade secrets overseas. 

13 (5) A breakdown of the trade secret protections 

14 afforded United States companies by each country 

15 that is a trading partner of the United States and 

16 enforcement efforts available and undertaken in each 

17 such country, including a list identifying specific 

18 countries where trade secret theft, laws, or enforce19 ment is a significant problem for United States com20 panies. 

21 (6) Instances of the Federal Government work22 ing with foreign countries to investigate, arrest, and 

23 prosecute entities and individuals involved in the 

24 theft of trade secrets outside of the United States. 


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1 (7) Specific progress made under trade agree2 ments and treaties, including any new remedies en3 acted by foreign countries, to protect against theft 

4 of trade secrets of United States companies outside 

5 of the United States. 

6 (8) Recommendations of legislative and execu7 tive branch actions that may be undertaken to— 

8 (A) reduce the threat of and economic im9 pact caused by the theft of the trade secrets of 

10 United States companies occurring outside of 

11 the United States; 

12 (B) educate United States companies re13 garding the threats to their trade secrets when 

14 taken outside of the United States; 

15 (C) provide assistance to United States 

16 companies to reduce the risk of loss of their 

17 trade secrets when taken outside of the United 

18 States; and 

19 (D) provide a mechanism for United States 

20 companies to confidentially or anonymously re21 port the theft of trade secrets occurring outside 

22 of the United States. 

23 SEC. 5. SENSE OF CONGRESS. 

24 It is the sense of Congress that— 


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1 (1) trade secret theft occurs in the United 

2 States and around the world; 

3 (2) trade secret theft, wherever it occurs, harms 

4 the companies that own the trade secrets and the 

5 employees of the companies; 

6 (3) chapter 90 of title 18, United States Code 

7 (commonly known as the ‘‘Economic Espionage Act 

8 of 1996’’), applies broadly to protect trade secrets 

9 from theft; and 

10 (4) it is important when seizing information to 

11 balance the need to prevent or remedy misappropria12 tion with the need to avoid interrupting the— 

13 (A) business of third parties; and 

14 (B) legitimate interests of the party ac15 cused of wrongdoing. 

16 SEC. 6. BEST PRACTICES. 

17 (a) IN GENERAL.—Not later than 2 years after the 

18 date of enactment of this Act, the Federal Judicial Center, 

19 using existing resources, shall develop recommended best 

20 practices for— 

21 (1) the seizure of information and media stor22 ing the information; and 

23 (2) the securing of the information and media 

24 once seized. 


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1 (b) UPDATES.—The Federal Judicial Center shall 

2 update the recommended best practices developed under 

3 subsection (a) from time to time. 

4 (c) CONGRESSIONAL SUBMISSIONS.—The Federal 

5 Judicial Center shall provide a copy of the recommenda6 tions developed under subsection (a), and any updates 

7 made under subsection (b), to the— 

8 (1) Committee on the Judiciary of the Senate; 

9 and 

10 (2) Committee on the Judiciary of the House of 

11 Representatives. 

12 SEC. 7. IMMUNITY FROM LIABILITY FOR CONFIDENTIAL 

13 DISCLOSURE OF A TRADE SECRET TO THE 

14 GOVERNMENT OR IN A COURT FILING. 

15 (a) AMENDMENT.—Section 1833 of title 18, United 

16 States Code, is amended— 

17 (1) by striking ‘‘This chapter’’ and inserting 

18 ‘‘(a) IN GENERAL.—This chapter’’; 

19 (2) in subsection (a)(2), as designated by para20 graph (1), by striking ‘‘the reporting of a suspected 

21 violation of law to any governmental entity of the 

22 United States, a State, or a political subdivision of 

23 a State, if such entity has lawful authority with re24 spect to that violation’’ and inserting ‘‘the disclosure 


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1 of a trade secret in accordance with subsection (b)’’; 

2 and 

3 (3) by adding at the end the following: 

4 ‘‘(b) IMMUNITY FROM LIABILITY FOR CONFIDENTIAL

5 DISCLOSURE OF A TRADE SECRET TO THE GOVERNMENT

6 OR IN A COURT FILING.— 

7 ‘‘(1) IMMUNITY.—An individual shall not be 

8 held criminally or civilly liable under any Federal or 

9 State trade secret law for the disclosure of a trade 

10 secret that— 

11 ‘‘(A) is made— 

12 ‘‘(i) in confidence to a Federal, State, 

13 or local government official, either directly 

14 or indirectly, or to an attorney; and 

15 ‘‘(ii) solely for the purpose of report16 ing or investigating a suspected violation of 

17 law; or 

18 ‘‘(B) is made in a complaint or other docu19 ment filed in a lawsuit or other proceeding, if 

20 such filing is made under seal. 

21 ‘‘(2) USE OF TRADE SECRET INFORMATION IN

22 ANTI-RETALIATION LAWSUIT.—An individual who 

23 files a lawsuit for retaliation by an employer for re24 porting a suspected violation of law may disclose the 

25 trade secret to the attorney of the individual and use 


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1 the trade secret information in the court proceeding, 

2 if the individual— 

3 ‘‘(A) files any document containing the 

4 trade secret under seal; and 

5 ‘‘(B) does not disclose the trade secret, ex6 cept pursuant to court order. 

7 ‘‘(3) NOTICE.— 

8 ‘‘(A) IN GENERAL.—An employer shall 

9 provide notice of the immunity set forth in this 

10 subsection in any contract or agreement with 

11 an employee that governs the use of a trade se12 cret or other confidential information. 

13 ‘‘(B) POLICY DOCUMENT.—An employer 

14 shall be considered to be in compliance with the 

15 notice requirement in subparagraph (A) if the 

16 employer provides a cross-reference to a policy 

17 document provided to the employee that sets 

18 forth the employer’s reporting policy for a sus19 pected violation of law. 

20 ‘‘(C) NON-COMPLIANCE.—If an employer 

21 does not comply with the notice requirement in 

22 subparagraph (A), the employer may not be 

23 awarded exemplary damages or attorney fees 

24 under subparagraph (C) or (D) of section 


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27 

S 1890 RFH

1 1836(b)(3) in an action against an employee to 

2 whom notice was not provided. 

3 ‘‘(D) APPLICABILITY.—This paragraph 

4 shall apply to contracts and agreements that 

5 are entered into or updated after the date of 

6 enactment of this subsection. 

7 ‘‘(4) EMPLOYEE DEFINED.—For purposes of 

8 this subsection, the term ‘employee’ includes any in9 dividual performing work as a contractor or consult10 ant for an employer. 

11 ‘‘(5) RULE OF CONSTRUCTION.—Except as ex12 pressly provided for under this subsection, nothing 

13 in this subsection shall be construed to authorize, or 

14 limit liability for, an act that is otherwise prohibited 

15 by law, such as the unlawful access of material by 

16 unauthorized means.’’. 

17 (b) TECHNICAL AND CONFORMING AMENDMENT.— 

18 Section 1838 of title 18, United States Code, is amended 

19 by striking ‘‘This chapter’’ and inserting ‘‘Except as pro20 vided in section 1833(b), this chapter’’. 

Passed the Senate April 4, 2016. 

Attest: JULIE E. ADAMS, 

Secretary. 


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