S. 1890 

One Hundred Fourteenth Congress 

of the 

United States of America 

AT THE SECOND SESSION 

Begun and held at the City of Washington on Monday, 

the fourth day of January, two thousand and sixteen 

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. 

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 ‘‘Defend Trade Secrets Act of 

2016’’. 

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

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

is amended by striking subsection (b) and inserting the following: 

‘‘(b) PRIVATE CIVIL ACTIONS.— 

‘‘(1) IN GENERAL.—An owner of a trade secret that is misappropriated may bring a civil action under this subsection 

if the trade secret is related to a product or service used 

in, or intended for use in, interstate or foreign commerce. 

‘‘(2) CIVIL SEIZURE.— 

‘‘(A) IN GENERAL.— 

‘‘(i) APPLICATION.—Based on an affidavit or verified 

complaint satisfying the requirements of this paragraph, the court may, upon ex parte application but 

only in extraordinary circumstances, issue an order 

providing for the seizure of property necessary to prevent the propagation or dissemination of the trade 

secret that is the subject of the action. 

‘‘(ii) REQUIREMENTS FOR ISSUING ORDER.—The 

court may not grant an application under clause (i) 

unless the court finds that it clearly appears from 

specific facts that— 

‘‘(I) an order issued pursuant to Rule 65 of 

the Federal Rules of Civil Procedure or another 

form of equitable relief would be inadequate to 

achieve the purpose of this paragraph because the 

party to which the order would be issued would 

evade, avoid, or otherwise not comply with such 

an order; 

‘‘(II) an immediate and irreparable injury will 

occur if such seizure is not ordered; 

‘‘(III) the harm to the applicant of denying 

the application outweighs the harm to the legitimate interests of the person against whom seizure 

would be ordered of granting the application and 
S. 1890—2 

substantially outweighs the harm to any third parties who may be harmed by such seizure; 

‘‘(IV) the applicant is likely to succeed in 

showing that— 

‘‘(aa) the information is a trade secret; 

and 

‘‘(bb) the person against whom seizure 

would be ordered— 

‘‘(AA) misappropriated the trade 

secret of the applicant by improper means; 

or 

‘‘(BB) conspired to use improper 

means to misappropriate the trade secret 

of the applicant; 

‘‘(V) the person against whom seizure would 

be ordered has actual possession of— 

‘‘(aa) the trade secret; and 

‘‘(bb) any property to be seized; 

‘‘(VI) the application describes with reasonable 

particularity the matter to be seized and, to the 

extent reasonable under the circumstances, identifies the location where the matter is to be seized; 

‘‘(VII) the person against whom seizure would 

be ordered, or persons acting in concert with such 

person, would destroy, move, hide, or otherwise 

make such matter inaccessible to the court, if the 

applicant were to proceed on notice to such person; 

and 

‘‘(VIII) the applicant has not publicized the 

requested seizure. 

‘‘(B) ELEMENTS OF ORDER.—If an order is issued under 

subparagraph (A), it shall— 

‘‘(i) set forth findings of fact and conclusions of 

law required for the order; 

‘‘(ii) provide for the narrowest seizure of property 

necessary to achieve the purpose of this paragraph 

and direct that the seizure be conducted in a manner 

that minimizes any interruption of the business operations of third parties and, to the extent possible, 

does not interrupt the legitimate business operations 

of the person accused of misappropriating the trade 

secret; 

‘‘(iii)(I) be accompanied by an order protecting the 

seized property from disclosure by prohibiting access 

by the applicant or the person against whom the order 

is directed, and prohibiting any copies, in whole or 

in part, of the seized property, to prevent undue damage to the party against whom the order has issued 

or others, until such parties have an opportunity to 

be heard in court; and 

‘‘(II) provide that if access is granted by the court 

to the applicant or the person against whom the order 

is directed, the access shall be consistent with subparagraph (D); 

‘‘(iv) provide guidance to the law enforcement officials executing the seizure that clearly delineates the 

scope of the authority of the officials, including— 
S. 1890—3 

‘‘(I) the hours during which the seizure may 

be executed; and 

‘‘(II) whether force may be used to access 

locked areas; 

‘‘(v) set a date for a hearing described in subparagraph (F) at the earliest possible time, and not later 

than 7 days after the order has issued, unless the 

party against whom the order is directed and others 

harmed by the order consent to another date for the 

hearing, except that a party against whom the order 

has issued or any person harmed by the order may 

move the court at any time to dissolve or modify the 

order after giving notice to the applicant who obtained 

the order; and 

‘‘(vi) require the person obtaining the order to provide the security determined adequate by the court 

for the payment of the damages that any person may 

be entitled to recover as a result of a wrongful or 

excessive seizure or wrongful or excessive attempted 

seizure under this paragraph. 

‘‘(C) PROTECTION FROM PUBLICITY.—The court shall 

take appropriate action to protect the person against whom 

an order under this paragraph is directed from publicity, 

by or at the behest of the person obtaining the order, 

about such order and any seizure under such order. 

‘‘(D) MATERIALS IN CUSTODY OF COURT.— ‘‘(i) IN GENERAL.—Any materials seized under this 

paragraph shall be taken into the custody of the court. 

The court shall secure the seized material from physical and electronic access during the seizure and while 

in the custody of the court. 

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

includes a storage medium, or if the seized material 

is stored on a storage medium, the court shall prohibit 

the medium from being connected to a network or 

the Internet without the consent of both parties, until 

the hearing required under subparagraph (B)(v) and 

described in subparagraph (F). 

‘‘(iii) PROTECTION OF CONFIDENTIALITY.—The court 

shall take appropriate measures to protect the confidentiality of seized materials that are unrelated to 

the trade secret information ordered seized pursuant 

to this paragraph unless the person against whom 

the order is entered consents to disclosure of the material. 

‘‘(iv) APPOINTMENT OF SPECIAL MASTER.—The court 

may appoint a special master to locate and isolate 

all misappropriated trade secret information and to 

facilitate the return of unrelated property and data 

to the person from whom the property was seized. 

The special master appointed by the court shall agree 

to be bound by a non-disclosure agreement approved 

by the court. 

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

service of a copy of the order under this paragraph, and 

the submissions of the applicant to obtain the order, shall 

be made by a Federal law enforcement officer who, upon 
S. 1890—4 

making service, shall carry out the seizure under the order. 

The court may allow State or local law enforcement officials 

to participate, but may not permit the applicant or any 

agent of the applicant to participate in the seizure. At 

the request of law enforcement officials, the court may 

allow a technical expert who is unaffiliated with the 

applicant and who is bound by a court-approved non-disclosure agreement to participate in the seizure if the court 

determines that the participation of the expert will aid 

the efficient execution of and minimize the burden of the 

seizure. 

‘‘(F) SEIZURE HEARING.— 

‘‘(i) DATE.—A court that issues a seizure order 

shall hold a hearing on the date set by the court 

under subparagraph (B)(v). 

‘‘(ii) BURDEN OF PROOF.—At a hearing held under 

this subparagraph, the party who obtained the order 

under subparagraph (A) shall have the burden to prove 

the facts supporting the findings of fact and conclusions 

of law necessary to support the order. If the party 

fails to meet that burden, the seizure order shall be 

dissolved or modified appropriately. 

‘‘(iii) DISSOLUTION OR MODIFICATION OF ORDER.— 

A party against whom the order has been issued or 

any person harmed by the order may move the court 

at any time to dissolve or modify the order after giving 

notice to the party who obtained the order. 

‘‘(iv) DISCOVERY TIME LIMITS.—The court may 

make such orders modifying the time limits for discovery under the Federal Rules of Civil Procedure as 

may be necessary to prevent the frustration of the 

purposes of a hearing under this subparagraph. 

‘‘(G) ACTION FOR DAMAGE CAUSED BY WRONGFUL SEIZURE.—A person who suffers damage by reason of a wrongful or excessive seizure under this paragraph has a cause 

of action against the applicant for the order under which 

such seizure was made, and shall be entitled to the same 

relief as is provided under section 34(d)(11) of the Trademark Act of 1946 (15 U.S.C. 1116(d)(11)). The security 

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

not limit the recovery of third parties for damages. 

‘‘(H) MOTION FOR ENCRYPTION.—A party or a person 

who claims to have an interest in the subject matter seized 

may make a motion at any time, which may be heard 

ex parte, to encrypt any material seized or to be seized 

under this paragraph that is stored on a storage medium. 

The motion shall include, when possible, the desired 

encryption method. 

‘‘(3) REMEDIES.—In a civil action brought under this subsection with respect to the misappropriation of a trade secret, 

a court may— 

‘‘(A) grant an injunction— 

‘‘(i) to prevent any actual or threatened misappropriation described in paragraph (1) on such terms as 

the court deems reasonable, provided the order does 

not— 
S. 1890—5 

‘‘(I) prevent a person from entering into an 

employment relationship, and that conditions 

placed on such employment shall be based on evidence of threatened misappropriation and not 

merely on the information the person knows; or 

‘‘(II) otherwise conflict with an applicable 

State law prohibiting restraints on the practice 

of a lawful profession, trade, or business; 

‘‘(ii) if determined appropriate by the court, 

requiring affirmative actions to be taken to protect 

the trade secret; and 

‘‘(iii) in exceptional circumstances that render an 

injunction inequitable, that conditions future use of 

the trade secret upon payment of a reasonable royalty 

for no longer than the period of time for which such 

use could have been prohibited; 

‘‘(B) award— 

‘‘(i)(I) damages for actual loss caused by the misappropriation of the trade secret; and 

‘‘(II) damages for any unjust enrichment caused 

by the misappropriation of the trade secret that is 

not addressed in computing damages for actual loss; 

or 

‘‘(ii) in lieu of damages measured by any other 

methods, the damages caused by the misappropriation 

measured by imposition of liability for a reasonable 

royalty for the misappropriator’s unauthorized disclosure or use of the trade secret; 

‘‘(C) if the trade secret is willfully and maliciously 

misappropriated, award exemplary damages in an amount 

not more than 2 times the amount of the damages awarded 

under subparagraph (B); and 

‘‘(D) if a claim of the misappropriation is made in 

bad faith, which may be established by circumstantial evidence, a motion to terminate an injunction is made or 

opposed in bad faith, or the trade secret was willfully 

and maliciously misappropriated, award reasonable attorney’s fees to the prevailing party. 

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

shall have original jurisdiction of civil actions brought under this 

section. 

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

(b) may not be commenced later than 3 years after the date on 

which the misappropriation with respect to which the action would 

relate 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)— 

(A) in subparagraph (B), by striking ‘‘the public’’ and 

inserting ‘‘another person who can obtain economic value 

from the disclosure or use of the information’’; and 

(B) 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: 
S. 1890—6 

‘‘(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, independent 

derivation, or any other lawful means of acquisition; 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) CONFORMING AMENDMENTS.— 

(1) The section heading for section 1836 of title 18, United 

States Code, is amended to read as follows: 

‘‘§ 1836. Civil proceedings’’. 

(2) 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) EFFECTIVE DATE.—The amendments made by this section 

shall apply with respect to any misappropriation of a trade secret 

(as defined in section 1839 of title 18, United States Code, as 
S. 1890—7 

amended by this section) for which any act occurs on or after 

the date of the enactment of this Act. 

(f) 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. 

(g) APPLICABILITY TO OTHER LAWS.—This section and the 

amendments made by this section shall not be construed to be 

a law pertaining to intellectual property for purposes of any other 

Act of Congress. 

SEC. 3. TRADE SECRET THEFT ENFORCEMENT. 

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

is amended— 

(1) in section 1832(b), by striking ‘‘$5,000,000’’ and inserting 

‘‘the greater of $5,000,000 or 3 times the value of the stolen 

trade secret to the organization, including expenses for research 

and design and other costs of reproducing the trade secret 

that the organization has thereby avoided’’; and 

(2) in section 1835— 

(A) by striking ‘‘In any prosecution’’ and inserting the 

following: 

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

(B) by adding at the end the following: 

‘‘(b) RIGHTS OF TRADE SECRET OWNERS.—The court may not 

authorize or direct the disclosure of any information the owner 

asserts to be a trade secret unless the court allows the owner 

the opportunity to file a submission under seal that describes the 

interest of the owner in keeping the information confidential. No 

submission under seal made under this subsection may be used 

in a prosecution under this chapter for any purpose other than 

those set forth in this section, or otherwise required by law. The 

provision of information relating to a trade secret to the United 

States or the court in connection with a prosecution under this 

chapter shall not constitute a waiver of trade secret protection, 

and the disclosure of information relating to a trade secret in 

connection with a prosecution under this chapter shall not constitute 

a waiver of trade secret protection unless the trade secret owner 

expressly consents to such waiver.’’. 

(b) RICO PREDICATE OFFENSES.—Section 1961(1) of title 18, 

United States Code, is amended by inserting ‘‘sections 1831 and 

1832 (relating to economic espionage and theft of trade secrets),’’ 

before ‘‘section 1951’’. 

SEC. 4. REPORT ON THEFT OF TRADE SECRETS OCCURRING ABROAD. 

(a) DEFINITIONS.—In this section: 

(1) DIRECTOR.—The term ‘‘Director’’ means the Under Secretary of Commerce for Intellectual Property and Director of 

the United States Patent and Trademark Office. 

(2) FOREIGN INSTRUMENTALITY, ETC.—The terms ‘‘foreign 

instrumentality’’, ‘‘foreign agent’’, and ‘‘trade secret’’ have the 

meanings given those terms in section 1839 of title 18, United 

States Code. 

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

Columbia and any commonwealth, territory, or possession of 

the United States. 
S. 1890—8 

(4) UNITED STATES COMPANY.—The term ‘‘United States 

company’’ means an organization organized under the laws 

of the United States or a State or political subdivision thereof. 

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

of this Act, and biannually thereafter, the Attorney General, in 

consultation with the Intellectual Property Enforcement Coordinator, the Director, and the heads of other appropriate agencies, 

shall submit to the Committees on the Judiciary of the House 

of Representatives and the Senate, and make publicly available 

on the Web site of the Department of Justice and disseminate 

to the public through such other means as the Attorney General 

may identify, a report on the following: 

(1) The scope and breadth of the theft of the trade secrets 

of United States companies occurring outside of the United 

States. 

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

outside of the United States is sponsored by foreign governments, foreign instrumentalities, or foreign agents. 

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

outside of the United States. 

(4) The ability and limitations of trade secret owners to 

prevent the misappropriation of trade secrets outside of the 

United States, to enforce any judgment against foreign entities 

for theft of trade secrets, and to prevent imports based on 

theft of trade secrets overseas. 

(5) A breakdown of the trade secret protections afforded 

United States companies by each country that is a trading 

partner of the United States and enforcement efforts available 

and undertaken in each such country, including a list identifying specific countries where trade secret theft, laws, or 

enforcement is a significant problem for United States companies. 

(6) Instances of the Federal Government working with 

foreign countries to investigate, arrest, and prosecute entities 

and individuals involved in the theft of trade secrets outside 

of the United States. 

(7) Specific progress made under trade agreements and 

treaties, including any new remedies enacted by foreign countries, to protect against theft of trade secrets of United States 

companies outside of the United States. 

(8) Recommendations of legislative and executive branch 

actions that may be undertaken to— 

(A) reduce the threat of and economic impact caused 

by the theft of the trade secrets of United States companies 

occurring outside of the United States; 

(B) educate United States companies regarding the 

threats to their trade secrets when taken outside of the 

United States; 

(C) provide assistance to United States companies to 

reduce the risk of loss of their trade secrets when taken 

outside of the United States; and 

(D) provide a mechanism for United States companies 

to confidentially or anonymously report the theft of trade 

secrets occurring outside of the United States. 

SEC. 5. SENSE OF CONGRESS. 

It is the sense of Congress that— 
S. 1890—9 

(1) trade secret theft occurs in the United States and 

around the world; 

(2) trade secret theft, wherever it occurs, harms the companies that own the trade secrets and the employees of the 

companies; 

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

known as the ‘‘Economic Espionage Act of 1996’’), applies 

broadly to protect trade secrets from theft; and 

(4) it is important when seizing information to balance 

the need to prevent or remedy misappropriation with the need 

to avoid interrupting the— 

(A) business of third parties; and 

(B) legitimate interests of the party accused of wrongdoing. 

SEC. 6. BEST PRACTICES. 

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

enactment of this Act, the Federal Judicial Center, using existing 

resources, shall develop recommended best practices for— 

(1) the seizure of information and media storing the 

information; and 

(2) the securing of the information and media once seized. 

(b) UPDATES.—The Federal Judicial Center shall update the 

recommended best practices developed under subsection (a) from 

time to time. 

(c) CONGRESSIONAL SUBMISSIONS.—The Federal Judicial Center 

shall provide a copy of the recommendations developed under subsection (a), and any updates made under subsection (b), to the— 

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

(2) Committee on the Judiciary of the House of Representatives. 

SEC. 7. IMMUNITY FROM LIABILITY FOR CONFIDENTIAL DISCLOSURE 

OF A TRADE SECRET TO THE GOVERNMENT OR IN A COURT 

FILING. 

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

is amended— 

(1) by striking ‘‘This chapter’’ and inserting ‘‘(a) IN GEN- ERAL.—This chapter’’; 

(2) in subsection (a)(2), as designated by paragraph (1), 

by striking ‘‘the reporting of a suspected violation of law to 

any governmental entity of the United States, a State, or a 

political subdivision of a State, if such entity has lawful 

authority with respect to that violation’’ and inserting ‘‘the 

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

and 

(3) by adding at the end the following: 

‘‘(b) IMMUNITY FROM LIABILITY FOR CONFIDENTIAL DISCLOSURE

OF A TRADE SECRET TO THE GOVERNMENT OR IN A COURT FILING.— 

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

or civilly liable under any Federal or State trade secret law 

for the disclosure of a trade secret that— 

‘‘(A) is made— 

‘‘(i) in confidence to a Federal, State, or local 

government official, either directly or indirectly, or to 

an attorney; and 

‘‘(ii) solely for the purpose of reporting or investigating a suspected violation of law; or 
S. 1890—10 

‘‘(B) is made in a complaint or other document filed 

in a lawsuit or other proceeding, if such filing is made 

under seal. 

‘‘(2) USE OF TRADE SECRET INFORMATION IN ANTI-RETALIATION LAWSUIT.—An individual who files a lawsuit for retaliation 

by an employer for reporting a suspected violation of law may 

disclose the trade secret to the attorney of the individual and 

use the trade secret information in the court proceeding, if 

the individual— 

‘‘(A) files any document containing the trade secret 

under seal; and 

‘‘(B) does not disclose the trade secret, except pursuant 

to court order. 

‘‘(3) NOTICE.— 

‘‘(A) IN GENERAL.—An employer shall provide notice 

of the immunity set forth in this subsection in any contract 

or agreement with an employee that governs the use of 

a trade secret or other confidential information. 

‘‘(B) POLICY DOCUMENT.—An employer shall be considered to be in compliance with the notice requirement in 

subparagraph (A) if the employer provides a cross-reference 

to a policy document provided to the employee that sets 

forth the employer’s reporting policy for a suspected violation of law. 

‘‘(C) NON-COMPLIANCE.—If an employer does not 

comply with the notice requirement in subparagraph (A), 

the employer may not be awarded exemplary damages 

or attorney fees under subparagraph (C) or (D) of section 

1836(b)(3) in an action against an employee to whom notice 

was not provided. 

‘‘(D) APPLICABILITY.—This paragraph shall apply to 

contracts and agreements that are entered into or updated 

after the date of enactment of this subsection. 

‘‘(4) EMPLOYEE DEFINED.—For purposes of this subsection, 

the term ‘employee’ includes any individual performing work 

as a contractor or consultant for an employer. 

‘‘(5) RULE OF CONSTRUCTION.—Except as expressly provided 

for under this subsection, nothing in this subsection shall be 

construed to authorize, or limit liability for, an act that is 

otherwise prohibited by law, such as the unlawful access of 

material by unauthorized means.’’. 

(b) TECHNICAL AND CONFORMING AMENDMENT.—Section 1838 

of title 18, United States Code, is amended by striking ‘‘This 
S. 1890—11 

chapter’’ and inserting ‘‘Except as provided in section 1833(b), this 

chapter’’. 

Speaker of the House of Representatives. 

Vice President of the United States and

President of the Senate.