II 

Calendar No. 355 

114TH CONGRESS 

2D SESSION S. 1890 

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

jurisdiction for the theft of trade secrets, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 29, 2015 

Mr. HATCH (for himself, Mr. COONS, Mr. FLAKE, Mr. DURBIN, Mr. TILLIS, 

Ms. BALDWIN, Mr. BLUMENTHAL, Mr. RISCH, Mr. CRAPO, Mr. BLUNT, 

Ms. AYOTTE, Mr. KIRK, Ms. KLOBUCHAR, Mr. PERDUE, Mr. SESSIONS, 

Mr. MURPHY, Mrs. MCCASKILL, Mr. FRANKEN, Mr. KING, Mr. WICKER, 

Ms. COLLINS, Mrs. FISCHER, Mr. HELLER, Ms. HIRONO, Mrs. FEINSTEIN, Mr. WHITEHOUSE, Mr. GRAHAM, and Mr. MANCHIN) introduced 

the following bill; which was read twice and referred to the Committee 

on the Judiciary 

JANUARY 28, 2016 

Reported by Mr. GRASSLEY, with an amendment 

[Strike out all after the enacting clause and insert the part printed in italic] 

A BILL 

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 2015’’. 

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 may bring a civil action under this subsection if the 

12 person is aggrieved by a misappropriation of a trade 

13 secret that is related to a product or service used in, 

14 or intended for use in, interstate or foreign com15 merce. 

16 ‘‘(2) CIVIL SEIZURE.— 

17 ‘‘(A) IN GENERAL.— 

18 ‘‘(i) APPLICATION.—Based on an affi19 davit or verified complaint satisfying the 

20 requirements of this paragraph, the court 

21 may, upon ex parte application, 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(b) of the Federal Rules of 

8 Civil Procedure would be inadequate 

9 to achieve the purpose of this para10 graph because the party to which the 

11 order would be issued would evade, 

12 avoid, or otherwise not comply with 

13 such an order; 

14 ‘‘(II) an immediate and irrep15 arable injury will occur if such seizure 

16 is not ordered; 

17 ‘‘(III) the harm to the applicant 

18 of denying the application outweighs 

19 the harm to the legitimate interests of 

20 the person against whom seizure 

21 would be ordered of granting the ap22 plication and substantially outweighs 

23 the harm to any third parties who 

24 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; 

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; and 

14 ‘‘(cc) the person against 

15 whom seizure would be ordered 

16 has possession of the trade se17 cret; 

18 ‘‘(V) the application describes 

19 with reasonable particularity the mat20 ter to be seized and, to the extent rea21 sonable under the circumstances, 

22 identifies the location where the mat23 ter is to be seized; 

24 ‘‘(VI) the person against whom 

25 seizure would be ordered, or persons 


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1 acting in concert with such person, 

2 would destroy, move, hide, or other3 wise make such matter inaccessible to 

4 the court, if the applicant were to pro5 ceed on notice to such person; and 

6 ‘‘(VII) the applicant has not pub7 licized the requested seizure. 

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

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

10 ‘‘(i) set forth findings of fact and con11 clusions of law required for the order; 

12 ‘‘(ii) provide for the narrowest seizure 

13 of property necessary to achieve the pur14 pose of this paragraph and direct that the 

15 seizure be conducted in a manner that 

16 minimizes any interruption of the business 

17 operations of third parties and, to the ex18 tent possible, does not interrupt the legiti19 mate business operations of the person ac20 cused of misappropriating the trade secret 

21 that are unrelated to the trade secret that 

22 has allegedly been misappropriated; 

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

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1 cant, including during the seizure, and pro2 hibiting any copies, in whole or in part, of 

3 the seized property, to prevent undue dam4 age to the party against whom the order 

5 has issued or others, until such parties 

6 have an opportunity to be heard in court; 

7 and 

8 ‘‘(II) if access is granted to the appli9 cant, the access shall be consistent with 

10 subparagraph (D); 

11 ‘‘(iv) set a date for a hearing de12 scribed in subparagraph (F) at the earliest 

13 possible time, and not later than 7 days 

14 after the order has issued, unless the party 

15 against whom the order is directed and 

16 others harmed by the order consent to an17 other date for the hearing, except that a 

18 party against whom the order has issued 

19 or any person harmed by the order may 

20 move the court at any time to dissolve or 

21 modify the order after giving notice to the 

22 applicant who obtained the order; and 

23 ‘‘(v) require the person obtaining the 

24 order to provide the security determined 

25 adequate by the court for the payment of 


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1 the damages that any person may be enti2 tled to recover as a result of a wrongful or 

3 excessive seizure or wrongful or excessive 

4 attempted seizure under this paragraph. 

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

6 court shall take appropriate action to protect 

7 the person against whom an order under this 

8 paragraph is directed from publicity, by or at 

9 the behest of the person obtaining the order, 

10 about such order and any seizure under such 

11 order. 

12 ‘‘(D) MATERIALS IN CUSTODY OF

13 COURT.—Any materials seized under this para14 graph shall be taken into the custody of the 

15 court. The court shall secure the seized material 

16 from physical and electronic access during the 

17 seizure and while in the custody of the court. 

18 If the seized material includes an electronic 

19 storage medium, or if the seized material is 

20 stored on an electronic storage medium, the 

21 court shall prohibit the medium from being con22 nected to an electronic network or the Internet 

23 without the consent of both parties, until the 

24 hearing required under subparagraph (B)(iv) 

25 and described in subparagraph (F). 


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

2 order that service of a copy of the order under 

3 this paragraph, and the submissions of the ap4 plicant to obtain the order, shall be made by a 

5 Federal law enforcement officer, or may be 

6 made by a State or local law enforcement offi7 cer, who, upon making service, shall carry out 

8 the seizure under the order. 

9 ‘‘(F) SEIZURE HEARING.— 

10 ‘‘(i) DATE.—A court that issues a sei11 zure order shall hold a hearing on the date 

12 set by the court under subparagraph 

13 (B)(iv). 

14 ‘‘(ii) BURDEN OF PROOF.—At a hear15 ing held under this subparagraph, the 

16 party obtaining the order shall have the 

17 burden to prove that the facts supporting 

18 the findings of fact and conclusions of law 

19 necessary to support the order are still in 

20 effect. If the party fails to meet that bur21 den, the seizure order shall be dissolved or 

22 modified appropriately. 

23 ‘‘(iii) DISSOLUTION OR MODIFICATION

24 OF ORDER.—A party against whom the 

25 order has been issued or any person 


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1 harmed by the order may move the court 

2 at any time to dissolve or modify the order 

3 after giving notice to the party who ob4 tained the order. 

5 ‘‘(iv) DISCOVERY TIME LIMITS.—The 

6 court may make such orders modifying the 

7 time limits for discovery under the Federal 

8 Rules of Civil Procedure as may be nec9 essary to prevent the frustration of the 

10 purposes of a hearing under this subpara11 graph. 

12 ‘‘(G) ACTION FOR DAMAGE CAUSED BY

13 WRONGFUL SEIZURE.—A person who suffers 

14 damage by reason of a wrongful or excessive 

15 seizure under this paragraph has a cause of ac16 tion against the applicant for the order under 

17 which such seizure was made, and shall be enti18 tled to the same relief as is provided under sec19 tion 34(d)(11) of the Trademark Act of 1946 

20 (15 U.S.C. 1116(d)(11)). The security posted 

21 with the court under subparagraph (B)(v) shall 

22 not limit the recovery of third parties for dam23 ages. 

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

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


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1 heard ex parte, to encrypt any material seized 

2 or to be seized under this paragraph that is 

3 stored on an electronic storage medium. The 

4 motion shall include, when possible, the desired 

5 encryption method. 

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

7 under this subsection with respect to the misappro8 priation of a trade secret, a court may— 

9 ‘‘(A) grant an injunction— 

10 ‘‘(i) to prevent any actual or threat11 ened misappropriation described in para12 graph (1) on such terms as the court 

13 deems reasonable, provided the order does 

14 not prevent a person from accepting an 

15 offer of employment under conditions that 

16 avoid actual or threatened misappropria17 tion described in paragraph (1); 

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 3 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, a motion to terminate an in24 junction is made or opposed in bad faith, or the 

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1 appropriated, award reasonable attorney’s fees 

2 to the prevailing party. 

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

4 United States shall have original jurisdiction of civil ac5 tions brought under this section. 

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

7 subsection (b) may not be commenced later than 5 years 

8 after the date on which the misappropriation with respect 

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

10 exercise of reasonable diligence should have been discov11 ered. For purposes of this subsection, a continuing mis12 appropriation constitutes a single claim of misappropria13 tion.’’. 

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

15 States Code, is amended— 

16 (1) in paragraph (3), by striking ‘‘and’’ at the 

17 end; 

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

19 the end and inserting a semicolon; and 

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

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

22 ‘‘(A) acquisition of a trade secret of an23 other by a person who knows or has reason to 

24 know that the trade secret was acquired by im25 proper means; or 


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

2 another without express or implied consent by 

3 a person who— 

4 ‘‘(i) used improper means to acquire 

5 knowledge of the trade secret; 

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

7 knew or had reason to know that the 

8 knowledge of the trade secret was— 

9 ‘‘(I) derived from or through a 

10 person who had used improper means 

11 to acquire the trade secret; 

12 ‘‘(II) acquired under cir13 cumstances giving rise to a duty to 

14 maintain the secrecy of the trade se15 cret or limit the use of the trade se16 cret; or 

17 ‘‘(III) derived from or through a 

18 person who owed a duty to the person 

19 seeking relief to maintain the secrecy 

20 of the trade secret or limit the use of 

21 the trade secret; or 

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

23 position of the person, knew or had reason 

24 to know that— 


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1 ‘‘(I) the trade secret was a trade 

2 secret; and 

3 ‘‘(II) knowledge of the trade se4 cret had been acquired by accident or 

5 mistake; 

6 ‘‘(6) the term ‘improper means’— 

7 ‘‘(A) includes theft, bribery, misrepresenta8 tion, breach or inducement of a breach of a 

9 duty to maintain secrecy, or espionage through 

10 electronic or other means; and 

11 ‘‘(B) does not include reverse engineering 

12 or independent derivation; and 

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

14 the Act entitled ‘An Act to provide for the registra15 tion and protection of trademarks used in commerce, 

16 to carry out the provisions of certain international 

17 conventions, and for other purposes, approved July 

18 5, 1946 (15 U.S.C. 1051 et seq.) (commonly re19 ferred to as the ‘‘Trademark Act of 1946’’ or the 

20 ‘‘Lanham Act’’)’.’’. 

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

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

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

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

25 (d) CONFORMING AMENDMENTS.— 


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

2 18, United States Code, is amended to read as fol3 lows: 

4 ‘‘§ 1836. Civil proceedings’’. 

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

6 18, United States Code, is amended by striking the 

7 item relating to section 1836 and inserting the fol8 lowing: 

‘‘1836. Civil proceedings.’’. 

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

10 this section shall apply with respect to any misappropria11 tion of a trade secret (as defined in section 1839 of title 

12 18, United States Code, as amended by this section) for 

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

14 of this Act. 

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

16 amendments made by this section shall be construed to 

17 modify the rule of construction under section 1838 of title 

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

19 of law. 

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

21 and the amendments made by this section shall not be con22 strued to be a law pertaining to intellectual property for 

23 purposes of any other Act of Congress. 


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1 SEC. 3. REPORT ON THEFT OF TRADE SECRETS OCCUR2 RING ABROAD. 

3 (a) DEFINITIONS.—In this section: 

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

5 the Under Secretary of Commerce for Intellectual 

6 Property and Director of the United States Patent 

7 and Trademark Office. 

8 (2) FOREIGN INSTRUMENTALITY, ETC.—The 

9 terms ‘‘foreign instrumentality’’, ‘‘foreign agent’’, 

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

11 terms in section 1839 of title 18, United States 

12 Code. 

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

14 District of Columbia and any commonwealth, terri15 tory, or possession of the United States. 

16 (4) UNITED STATES COMPANY.—The term 

17 ‘‘United States company’’ means an organization or18 ganized under the laws of the United States or a 

19 State or political subdivision thereof. 

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

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

22 Attorney General, in consultation with the Intellectual 

23 Property Enforcement Coordinator, the Director, and the 

24 heads of other appropriate agencies, shall submit to the 

25 Committees on the Judiciary of the House of Representa26 tives and the Senate, and make publicly available on the 


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1 Web site of the Department of Justice and disseminate 

2 to the public through such other means as the Attorney 

3 General may identify, a report on the following: 

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

5 trade secrets of United States companies occurring 

6 outside of the United States. 

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

8 occurring outside of the United States is sponsored 

9 by foreign governments, foreign instrumentalities, or 

10 foreign agents. 

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

12 occurring outside of the United States. 

13 (4) The ability and limitations of trade secret 

14 owners to prevent the misappropriation of trade se15 crets outside of the United States, to enforce any 

16 judgment against foreign entities for theft of trade 

17 secrets, and to prevent imports based on theft of 

18 trade secrets overseas. 

19 (5) A breakdown of the trade secret protections 

20 afforded United States companies by each country 

21 that is a trading partner of the United States and 

22 enforcement efforts available and undertaken in each 

23 such country, including a list identifying specific 

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1 ment is a significant problem for United States com2 panies. 

3 (6) Instances of the Federal Government work4 ing with foreign countries to investigate, arrest, and 

5 prosecute entities and individuals involved in the 

6 theft of trade secrets outside of the United States. 

7 (7) Specific progress made under trade agree8 ments and treaties, including any new remedies en9 acted by foreign countries, to protect against theft 

10 of trade secrets of United States companies outside 

11 of the United States. 

12 (8) Recommendations of legislative and execu13 tive branch actions that may be undertaken to— 

14 (A) reduce the threat of and economic im15 pact caused by the theft of the trade secrets of 

16 United States companies occurring outside of 

17 the United States; 

18 (B) educate United States companies re19 garding the threats to their trade secrets when 

20 taken outside of the United States; 

21 (C) provide assistance to United States 

22 companies to reduce the risk of loss of their 

23 trade secrets when taken outside of the United 

24 States; and 


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1 (D) provide a mechanism for United States 

2 companies to confidentially or anonymously re3 port the theft of trade secrets occurring outside 

4 of the United States. 

5 SEC. 4. SENSE OF CONGRESS. 

6 It is the sense of Congress that— 

7 (1) trade secret theft occurs in the United 

8 States and around the world; 

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

10 the companies that own the trade secrets and the 

11 employees of the companies; and 

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

13 (commonly known as the Economic Espionage Act of 

14 1996), applies broadly to protect trade secrets from 

15 theft. 

16 SECTION 1. SHORT TITLE. 

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

18 Act of 2016’’. 

19 SEC. 2. FEDERAL JURISDICTION FOR THEFT OF TRADE SE20 CRETS. 

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

22 States Code, is amended by striking subsection (b) and in23 serting the following: 

24 ‘‘(b) PRIVATE CIVIL ACTIONS.— 


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

2 that is misappropriated may bring a civil action 

3 under this subsection if the trade secret is related to 

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

5 interstate or foreign commerce. 

6 ‘‘(2) CIVIL SEIZURE.— 

7 ‘‘(A) IN GENERAL.— 

8 ‘‘(i) APPLICATION.—Based on an affi9 davit or verified complaint satisfying the 

10 requirements of this paragraph, the court 

11 may, upon ex parte application but only in 

12 extraordinary circumstances, issue an order 

13 providing for the seizure of property nec14 essary to prevent the propagation or dis15 semination of the trade secret that is the 

16 subject of the action. 

17 ‘‘(ii) REQUIREMENTS FOR ISSUING

18 ORDER.—The court may not grant an ap19 plication under clause (i) unless the court 

20 finds that it clearly appears from specific 

21 facts that— 

22 ‘‘(I) an order issued pursuant to 

23 Rule 65 of the Federal Rules of Civil 

24 Procedure or another form of equitable 

25 relief would be inadequate to achieve 


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1 the purpose of this paragraph because 

2 the party to which the order would be 

3 issued would evade, avoid, or otherwise 

4 not comply with such an order; 

5 ‘‘(II) an immediate and irrep6 arable injury will occur if such seizure 

7 is not ordered; 

8 ‘‘(III) the harm to the applicant 

9 of denying the application outweighs 

10 the harm to the legitimate interests of 

11 the person against whom seizure would 

12 be ordered of granting the application 

13 and substantially outweighs the harm 

14 to any third parties who may be 

15 harmed by such seizure; 

16 ‘‘(IV) the applicant is likely to 

17 succeed in showing that— 

18 ‘‘(aa) the information is a 

19 trade secret; and 

20 ‘‘(bb) the person against 

21 whom seizure would be ordered— 

22 ‘‘(AA) misappropriated 

23 the trade secret of the appli24 cant by improper means; or 


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1 ‘‘(BB) conspired to use 

2 improper means to mis3 appropriate the trade secret 

4 of the applicant; 

5 ‘‘(V) the person against whom sei6 zure would be ordered has actual pos7 session of— 

8 ‘‘(aa) the trade secret; and 

9 ‘‘(bb) any property to be 

10 seized; 

11 ‘‘(VI) the application describes 

12 with reasonable particularity the mat13 ter to be seized and, to the extent rea14 sonable under the circumstances, iden15 tifies the location where the matter is 

16 to be seized; 

17 ‘‘(VII) the person against whom 

18 seizure would be ordered, or persons 

19 acting in concert with such person, 

20 would destroy, move, hide, or otherwise 

21 make such matter inaccessible to the 

22 court, if the applicant were to proceed 

23 on notice to such person; and 

24 ‘‘(VIII) the applicant has not 

25 publicized the requested seizure. 


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

2 issued under subparagraph (A), it shall— 

3 ‘‘(i) set forth findings of fact and con4 clusions of law required for the order; 

5 ‘‘(ii) provide for the narrowest seizure 

6 of property necessary to achieve the purpose 

7 of this paragraph and direct that the sei8 zure be conducted in a manner that mini9 mizes any interruption of the business oper10 ations of third parties and, to the extent 

11 possible, does not interrupt the legitimate 

12 business operations of the person accused of 

13 misappropriating the trade secret; 

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

15 protecting the seized property from disclo16 sure by prohibiting access by the applicant 

17 or the person against whom the order is di18 rected, and prohibiting any copies, in whole 

19 or in part, of the seized property, to prevent 

20 undue damage to the party against whom 

21 the order has issued or others, until such 

22 parties have an opportunity to be heard in 

23 court; and 

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

25 by the court to the applicant or the person 


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1 against whom the order is directed, the ac2 cess shall be consistent with subparagraph 

3 (D); 

4 ‘‘(iv) provide guidance to the law en5 forcement officials executing the seizure that 

6 clearly delineates the scope of the authority 

7 of the officials, including— 

8 ‘‘(I) the hours during which the 

9 seizure may be executed; and 

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

11 access locked areas; 

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

13 in subparagraph (F) at the earliest possible 

14 time, and not later than 7 days after the 

15 order has issued, unless the party against 

16 whom the order is directed and others 

17 harmed by the order consent to another date 

18 for the hearing, except that a party against 

19 whom the order has issued or any person 

20 harmed by the order may move the court at 

21 any time to dissolve or modify the order 

22 after giving notice to the applicant who ob23 tained the order; and 

24 ‘‘(vi) require the person obtaining the 

25 order to provide the security determined 


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1 adequate by the court for the payment of the 

2 damages that any person may be entitled to 

3 recover as a result of a wrongful or excessive 

4 seizure or wrongful or excessive attempted 

5 seizure under this paragraph. 

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

7 court shall take appropriate action to protect the 

8 person against whom an order under this para9 graph is directed from publicity, by or at the be10 hest of the person obtaining the order, about such 

11 order and any seizure under such order. 

12 ‘‘(D) MATERIALS IN CUSTODY OF COURT.— 

13 ‘‘(i) IN GENERAL.—Any materials 

14 seized under this paragraph shall be taken 

15 into the custody of the court. The court shall 

16 secure the seized material from physical and 

17 electronic access during the seizure and 

18 while in the custody of the court. 

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

20 material includes a storage medium, or if 

21 the seized material is stored on a storage 

22 medium, the court shall prohibit the me23 dium from being connected to a network or 

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1 paragraph (B)(v) and described in subpara2 graph (F). 

3 ‘‘(iii) PROTECTION OF CONFIDEN4 TIALITY.—The court shall take appropriate 

5 measures to protect the confidentiality of 

6 seized materials that are unrelated to the 

7 trade secret information ordered seized pur8 suant to this paragraph unless the person 

9 against whom the order is entered consents 

10 to disclosure of the material. 

11 ‘‘(iv) APPOINTMENT OF SPECIAL MAS12 TER.—The court may appoint a special 

13 master to locate and isolate all misappro14 priated trade secret information and to fa15 cilitate the return of unrelated property and 

16 data to the person from whom the property 

17 was seized. The special master appointed by 

18 the court shall agree to be bound by a non19 disclosure agreement approved by the court. 

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

21 order that service of a copy of the order under 

22 this paragraph, and the submissions of the ap23 plicant to obtain the order, shall be made by a 

24 Federal law enforcement officer who, upon mak25 ing service, shall carry out the seizure under the 


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1 order. The court may allow State or local law 

2 enforcement officials to participate, but may not 

3 permit the applicant or any agent of the appli4 cant to participate in the seizure. At the request 

5 of law enforcement officials, the court may allow 

6 a technical expert who is unaffiliated with the 

7 applicant and who is bound by a court-approved 

8 non-disclosure agreement to participate in the 

9 seizure if the court determines that the partici10 pation of the expert will aid the efficient execu11 tion of and minimize the burden of the seizure. 

12 ‘‘(F) SEIZURE HEARING.— 

13 ‘‘(i) DATE.—A court that issues a sei14 zure order shall hold a hearing on the date 

15 set by the court under subparagraph (B)(v). 

16 ‘‘(ii) BURDEN OF PROOF.—At a hear17 ing held under this subparagraph, the party 

18 who obtained the order under subparagraph 

19 (A) shall have the burden to prove the facts 

20 supporting the findings of fact and conclu21 sions of law necessary to support the order. 

22 If the party fails to meet that burden, the 

23 seizure order shall be dissolved or modified 

24 appropriately. 


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1 ‘‘(iii) DISSOLUTION OR MODIFICATION

2 OF ORDER.—A party against whom the 

3 order has been issued or any person harmed 

4 by the order may move the court at any 

5 time to dissolve or modify the order after 

6 giving notice to the party who obtained the 

7 order. 

8 ‘‘(iv) DISCOVERY TIME LIMITS.—The 

9 court may make such orders modifying the 

10 time limits for discovery under the Federal 

11 Rules of Civil Procedure as may be nec12 essary to prevent the frustration of the pur13 poses of a hearing under this subparagraph. 

14 ‘‘(G) ACTION FOR DAMAGE CAUSED BY

15 WRONGFUL SEIZURE.—A person who suffers 

16 damage by reason of a wrongful or excessive sei17 zure under this paragraph has a cause of action 

18 against the applicant for the order under which 

19 such seizure was made, and shall be entitled to 

20 the same relief as is provided under section 

21 34(d)(11) of the Trademark Act of 1946 (15 

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

23 the court under subparagraph (B)(vi) shall not 

24 limit the recovery of third parties for damages. 


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

2 or a person who claims to have an interest in the 

3 subject matter seized may make a motion at any 

4 time, which may be heard ex parte, to encrypt 

5 any material seized or to be seized under this 

6 paragraph that is stored on a storage medium. 

7 The motion shall include, when possible, the de8 sired encryption method. 

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

10 under this subsection with respect to the misappro11 priation of a trade secret, a court may— 

12 ‘‘(A) grant an injunction— 

13 ‘‘(i) to prevent any actual or threat14 ened misappropriation described in para15 graph (1) on such terms as the court deems 

16 reasonable, provided the order does not— 

17 ‘‘(I) prevent a person from enter18 ing into an employment relationship, 

19 and that conditions placed on such em20 ployment shall be based on evidence of 

21 threatened misappropriation and not 

22 merely on the information the person 

23 knows; or 

24 ‘‘(II) otherwise conflict with an 

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1 straints on the practice of a lawful 

2 profession, trade, or business; 

3 ‘‘(ii) if determined appropriate by the 

4 court, requiring affirmative actions to be 

5 taken to protect the trade secret; and 

6 ‘‘(iii) in exceptional circumstances that 

7 render an injunction inequitable, that con8 ditions future use of the trade secret upon 

9 payment of a reasonable royalty for no 

10 longer than the period of time for which 

11 such use could have been prohibited; 

12 ‘‘(B) award— 

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

14 by the misappropriation of the trade secret; 

15 and 

16 ‘‘(II) damages for any unjust enrich17 ment caused by the misappropriation of the 

18 trade secret that is not addressed in com19 puting damages for actual loss; or 

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

21 any other methods, the damages caused by 

22 the misappropriation measured by imposi23 tion of liability for a reasonable royalty for 

24 the misappropriator’s unauthorized disclo25 sure or use of the trade secret; 


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1 ‘‘(C) if the trade secret is willfully and ma2 liciously misappropriated, award exemplary 

3 damages in an amount not more than 2 times 

4 the amount of the damages awarded under sub5 paragraph (B); and 

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

7 made in bad faith, which may be established by 

8 circumstantial evidence, a motion to terminate 

9 an injunction is made or opposed in bad faith, 

10 or the trade secret was willfully and maliciously 

11 misappropriated, award reasonable attorney’s 

12 fees to the prevailing party. 

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

14 States shall have original jurisdiction of civil actions 

15 brought under this section. 

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

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

18 after the date on which the misappropriation with respect 

19 to which the action would relate is discovered or by the exer20 cise of reasonable diligence should have been discovered. For 

21 purposes of this subsection, a continuing misappropriation 

22 constitutes a single claim of misappropriation.’’. 

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

24 States Code, is amended— 

25 (1) in paragraph (3)— 


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

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

3 obtain economic value from the disclosure or use 

4 of the information’’; and 

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

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

7 the end and inserting a semicolon; and 

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

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

10 ‘‘(A) acquisition of a trade secret of another 

11 by a person who knows or has reason to know 

12 that the trade secret was acquired by improper 

13 means; or 

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

15 another without express or implied consent by a 

16 person who— 

17 ‘‘(i) used improper means to acquire 

18 knowledge of the trade secret; 

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

20 knew or had reason to know that the knowl21 edge of the trade secret was— 

22 ‘‘(I) derived from or through a 

23 person who had used improper means 

24 to acquire the trade secret; 


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1 ‘‘(II) acquired under cir2 cumstances giving rise to a duty to 

3 maintain the secrecy of the trade secret 

4 or limit the use of the trade secret; or 

5 ‘‘(III) derived from or through a 

6 person who owed a duty to the person 

7 seeking relief to maintain the secrecy of 

8 the trade secret or limit the use of the 

9 trade secret; or 

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

11 position of the person, knew or had reason 

12 to know that— 

13 ‘‘(I) the trade secret was a trade 

14 secret; and 

15 ‘‘(II) knowledge of the trade secret 

16 had been acquired by accident or mis17 take; 

18 ‘‘(6) the term ‘improper means’— 

19 ‘‘(A) includes theft, bribery, misrepresenta20 tion, breach or inducement of a breach of a duty 

21 to maintain secrecy, or espionage through elec22 tronic or other means; and 

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

24 independent derivation, or any other lawful 

25 means of acquisition; and 


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

2 Act entitled ‘An Act to provide for the registration 

3 and protection of trademarks used in commerce, to 

4 carry out the provisions of certain international con5 ventions, and for other purposes, approved July 5, 

6 1946 (15 U.S.C. 1051 et seq.) (commonly referred to 

7 as the ‘‘Trademark Act of 1946’’ or the ‘‘Lanham 

8 Act’’)’.’’. 

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

10 title 18, United States Code, is amended, in the matter pre11 ceding paragraph (1), by inserting ‘‘or create a private 

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

13 (d) CONFORMING AMENDMENTS.— 

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

15 18, United States Code, is amended to read as follows: 

16 ‘‘§ 1836. Civil proceedings’’. 

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

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

19 item relating to section 1836 and inserting the fol20 lowing: 

‘‘1836. Civil proceedings.’’. 

21 (e) EFFECTIVE DATE.—The amendments made by this 

22 section shall apply with respect to any misappropriation 

23 of a trade secret (as defined in section 1839 of title 18, 

24 United States Code, as amended by this section) for which 


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1 any act occurs on or after the date of the enactment of this 

2 Act. 

3 (f) RULE OF CONSTRUCTION.—Nothing in the amend4 ments made by this section shall be construed to modify 

5 the rule of construction under section 1838 of title 18, 

6 United States Code, or to preempt any other provision of 

7 law. 

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

9 and the amendments made by this section shall not be con10 strued to be a law pertaining to intellectual property for 

11 purposes of any other Act of Congress. 

12 SEC. 3. TRADE SECRET THEFT ENFORCEMENT. 

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

14 States Code, is amended— 

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

16 and inserting ‘‘the greater of $5,000,000 or 3 times 

17 the value of the stolen trade secret to the organization, 

18 including expenses for research and design and other 

19 costs of reproducing the trade secret that the organiza20 tion has thereby avoided’’; and 

21 (2) in section 1835— 

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

23 inserting the following: 

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

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


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

2 may not authorize or direct the disclosure of any informa3 tion the owner asserts to be a trade secret unless the court 

4 allows the owner the opportunity to file a submission under 

5 seal that describes the interest of the owner in keeping the 

6 information confidential. No submission under seal made 

7 under this subsection may be used in a prosecution under 

8 this chapter for any purpose other than those set forth in 

9 this section, or otherwise required by law. The provision 

10 of information relating to a trade secret to the United 

11 States or the court in connection with a prosecution under 

12 this chapter shall not constitute a waiver of trade secret 

13 protection, and the disclosure of information relating to a 

14 trade secret in connection with a prosecution under this 

15 chapter shall not constitute a waiver of trade secret protec16 tion unless the trade secret owner expressly consents to such 

17 waiver.’’. 

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

19 title 18, United States Code, is amended by inserting ‘‘sec20 tions 1831 and 1832 (relating to economic espionage and 

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

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

23 ABROAD. 

24 (a) DEFINITIONS.—In this section: 


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

2 Under Secretary of Commerce for Intellectual Prop3 erty and Director of the United States Patent and 

4 Trademark Office. 

5 (2) FOREIGN INSTRUMENTALITY, ETC.—The 

6 terms ‘‘foreign instrumentality’’, ‘‘foreign agent’’, and 

7 ‘‘trade secret’’ have the meanings given those terms in 

8 section 1839 of title 18, United States Code. 

9 (3) STATE.—The term ‘‘State’’ includes the Dis10 trict of Columbia and any commonwealth, territory, 

11 or possession of the United States. 

12 (4) UNITED STATES COMPANY.—The term 

13 ‘‘United States company’’ means an organization or14 ganized under the laws of the United States or a 

15 State or political subdivision thereof. 

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

17 of enactment of this Act, and biannually thereafter, the At18 torney General, in consultation with the Intellectual Prop19 erty Enforcement Coordinator, the Director, and the heads 

20 of other appropriate agencies, shall submit to the Commit21 tees on the Judiciary of the House of Representatives and 

22 the Senate, and make publicly available on the Web site 

23 of the Department of Justice and disseminate to the public 

24 through such other means as the Attorney General may 

25 identify, a report on the following: 


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

2 trade secrets of United States companies occurring 

3 outside of the United States. 

4 (2) The extent to which theft of trade secrets oc5 curring outside of the United States is sponsored by 

6 foreign governments, foreign instrumentalities, or for7 eign agents. 

8 (3) The threat posed by theft of trade secrets oc9 curring outside of the United States. 

10 (4) The ability and limitations of trade secret 

11 owners to prevent the misappropriation of trade se12 crets outside of the United States, to enforce any judg13 ment against foreign entities for theft of trade secrets, 

14 and to prevent imports based on theft of trade secrets 

15 overseas. 

16 (5) A breakdown of the trade secret protections 

17 afforded United States companies by each country 

18 that is a trading partner of the United States and en19 forcement efforts available and undertaken in each 

20 such country, including a list identifying specific 

21 countries where trade secret theft, laws, or enforce22 ment is a significant problem for United States com23 panies. 

24 (6) Instances of the Federal Government working 

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1 ecute entities and individuals involved in the theft of 

2 trade secrets outside of the United States. 

3 (7) Specific progress made under trade agree4 ments and treaties, including any new remedies en5 acted by foreign countries, to protect against theft of 

6 trade secrets of United States companies outside of the 

7 United States. 

8 (8) Recommendations of legislative and executive 

9 branch actions that may be undertaken to— 

10 (A) reduce the threat of and economic im11 pact caused by the theft of the trade secrets of 

12 United States companies occurring outside of the 

13 United States; 

14 (B) educate United States companies re15 garding the threats to their trade secrets when 

16 taken outside of the United States; 

17 (C) provide assistance to United States 

18 companies to reduce the risk of loss of their trade 

19 secrets when taken outside of the United States; 

20 and 

21 (D) provide a mechanism for United States 

22 companies to confidentially or anonymously re23 port the theft of trade secrets occurring outside of 

24 the United States. 


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1 SEC. 5. SENSE OF CONGRESS. 

2 It is the sense of Congress that— 

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

4 and around the world; 

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

6 the companies that own the trade secrets and the em7 ployees of the companies; 

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

9 (commonly known as the ‘‘Economic Espionage Act of 

10 1996’’), applies broadly to protect trade secrets from 

11 theft; and 

12 (4) it is important when seizing information to 

13 balance the need to prevent or remedy misappropria14 tion with the need to avoid interrupting the— 

15 (A) business of third parties; and 

16 (B) legitimate interests of the party accused 

17 of wrongdoing. 

18 SEC. 6. BEST PRACTICES. 

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

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

21 using existing resources, shall develop recommended best 

22 practices for— 

23 (1) the seizure of information and media storing 

24 the information; and 

25 (2) the securing of the information and media 

26 once seized. 


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1 (b) UPDATES.—The Federal Judicial Center shall up2 date the recommended best practices developed under sub3 section (a) from time to time. 

4 (c) CONGRESSIONAL SUBMISSIONS.—The Federal Ju5 dicial Center shall provide a copy of the recommendations 

6 developed under subsection (a), and any updates made 

7 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 held 

8 criminally or civilly liable under any Federal or 

9 State trade secret law for the disclosure of a trade se10 cret 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 reporting 

16 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 pro9 vide notice of the immunity set forth in this sub10 section in any contract or agreement with an 

11 employee that governs the use of a trade secret or 

12 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 forth 

18 the employer’s reporting policy for a suspected 

19 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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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 are 

5 entered into or updated after the date of enact6 ment of this subsection. 

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

8 subsection, the term ‘employee’ includes any indi9 vidual performing work as a contractor or consultant 

10 for an employer. 

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

13 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 un16 authorized means.’’. 

17 (b) TECHNICAL AND CONFORMING AMENDMENT.—Sec18 tion 1838 of title 18, United States Code, is amended by 

19 striking ‘‘This chapter’’ and inserting ‘‘Except as provided 

20 in section 1833(b), this chapter’’. 


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Calendar No. 355 

114TH CONGRESS 

2D SESSION S. 1890 

A BILL 

To amend chapter 90 of title 18, United States 

of trade secrets, and for other purposes. Code, to provide Federal jurisdiction for the theft 

JANUARY 28, 2016 

Reported with an amendment 


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