IB 

Union Calendar No. 494 

113TH CONGRESS 

2D SESSION H. R. 5233 

[Report No. 113–657] 

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 HOUSE OF REPRESENTATIVES 

JULY 29, 2014 

Mr. HOLDING (for himself, Mr. NADLER, Mr. COBLE, Mr. CONYERS, Mr. 

CHABOT, Mr. JEFFRIES, Mr. RICHMOND, and Ms. DELBENE) introduced 

the following bill; which was referred to the Committee on the Judiciary 

DECEMBER 11, 2014 

Additional sponsors: Mr. COLLINS of Georgia, Mr. REED, Mr. SENSENBRENNER, Mr. SMITH of Texas, Mr. HANNA, Mr. MCHENRY, Mr. 

DEUTCH, Mr. SMITH of Missouri, Mr. CONNOLLY, Mr. CHAFFETZ, Mr. 

GUTHRIE, Mr. KING of Iowa, Mr. MARINO, Mr. BACHUS, Mr. 

NUNNELEE, and Mr. PALLONE

DECEMBER 11, 2014 

Reported with an amendment, committed to the Committee of the Whole 

House on the State of the Union, and ordered to be printed 

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

[For text of introduced bill, see copy of bill as introduced on July 29, 2014] 


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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. 


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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Trade Secrets Protection 

5 Act of 2014’’. 

6 SEC. 2. FEDERAL JURISDICTION FOR THEFT OF TRADE SE7 CRETS. 

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

9 States Code, is amended by striking subsection (b) and in10 serting the following: 

11 ‘‘(b) PRIVATE CIVIL ACTIONS.— 

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

13 may bring a civil action under this subsection if the 

14 person is aggrieved by a misappropriation of a trade 

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

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

17 ‘‘(2) CIVIL SEIZURE.— 

18 ‘‘(A) IN GENERAL.— 

19 ‘‘(i) APPLICATION.—Based on an affi20 davit or verified complaint satisfying the 

21 requirements of this paragraph, the court 

22 may, upon ex parte application, issue an 

23 order providing for the seizure of property 

24 necessary to preserve evidence in a civil ac25 tion brought under paragraph (1) or to preVerDate Sep 11 2014 22:49 Dec 11, 2014 Jkt 049200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6203 E:\BILLS\H5233.RH H5233

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1 vent the propagation or dissemination of 

2 the trade secret that is the subject of the ac3 tion. 

4 ‘‘(ii) REQUIREMENTS FOR ISSUING

5 ORDER.—The court may not grant an ap6 plication under clause (i) unless the court 

7 finds that it clearly appears from specific 

8 facts that— 

9 ‘‘(I) an order issued pursuant to 

10 Rule 65(b) of the Federal Rules of Civil 

11 Procedure would be inadequate to 

12 achieve the purpose of this paragraph 

13 because the party to which the order 

14 would be issued would evade, avoid, or 

15 otherwise not comply with such an 

16 order; 

17 ‘‘(II) an immediate and irrep18 arable injury will occur if such seizure 

19 is not ordered; 

20 ‘‘(III) the harm to the applicant 

21 of denying the application outweighs 

22 the harm to the legitimate interests of 

23 the person against whom seizure would 

24 be ordered of granting the application 

25 and substantially outweighs the harm 


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1 to any third parties who may be 

2 harmed by such seizure; 

3 ‘‘(IV) the applicant is likely to 

4 succeed in showing that the person 

5 against whom seizure would be ordered 

6 misappropriated the trade secret by 

7 improper means, or conspired to use 

8 improper means to misappropriate the 

9 trade secret, and is in possession of the 

10 trade secret; 

11 ‘‘(V) 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 ‘‘(VI) 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 ‘‘(VII) the applicant has not pub25 licized 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 seizure of any 

6 property in a manner that minimizes any 

7 interruption of the business operations of 

8 third parties and, to the extent possible, 

9 does not interrupt those legitimate business 

10 operations of the person accused of mis11 appropriating the trade secret that are un12 related to the trade secret that has allegedly 

13 been misappropriated; 

14 ‘‘(iii) be accompanied by an order pro15 tecting the property from disclosure by re16 stricting the access of the applicant, includ17 ing during the seizure, and prohibiting any 

18 copies, in whole or in part, of the seized 

19 property, to prevent undue damage to the 

20 party against whom the order has issued or 

21 others, until such parties have an oppor22 tunity to be heard in court; 

23 ‘‘(iv) set a date for a hearing at the 

24 earliest possible time, and not later than 7 

25 days after the order has issued, unless the 


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1 party against whom the order is directed 

2 and others harmed by the order consent to 

3 another date for such hearing, except that a 

4 party against whom the order has issued or 

5 any person harmed by the order may move 

6 the court at any time to dissolve or modify 

7 the order after giving notice to the appli8 cant who obtained the order; and 

9 ‘‘(v) require the person obtaining the 

10 order to provide the security determined 

11 adequate by the court for the payment of 

12 such damages as any person may be enti13 tled to recover as a result of a wrongful or 

14 excessive seizure or wrongful or excessive at15 tempted seizure under this paragraph. 

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

17 court shall take appropriate action to protect the 

18 person against whom an order under this para19 graph is directed from publicity, by or at the be20 hest of the person obtaining the order, about such 

21 order and any seizure under such order. 

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

23 Any materials seized under this paragraph shall 

24 be taken into the custody of the court. The court 

25 shall secure the seized material from physical 


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1 and electronic access during the seizure and 

2 while in the custody of the court. 

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

4 order that service of a copy of the order under 

5 this paragraph shall be made by a Federal law 

6 enforcement officer, or may be made by a State 

7 or local law enforcement officer, who, upon mak8 ing service, shall carry out the seizure under the 

9 order. 

10 ‘‘(F) ACTION FOR DAMAGE CAUSED BY

11 WRONGFUL SEIZURE.—A person who suffers 

12 damage by reason of a wrongful or excessive sei13 zure under this paragraph has a cause of action 

14 against the applicant for the order under which 

15 such seizure was made, and shall be entitled to 

16 the same relief as is provided under section 

17 34(d)(11) of the Trademark Act of 1946 (15 

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

19 the court under subparagraph (B)(v) shall not 

20 limit the recovery of third parties for damages. 

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

22 under this subsection with respect to the misappro23 priation of a trade secret, a court may— 

24 ‘‘(A) grant an injunction— 


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1 ‘‘(i) to prevent any actual or threat2 ened misappropriation described in para3 graph (1) on such terms as the court deems 

4 reasonable; 

5 ‘‘(ii) if determined appropriate by the 

6 court, requiring affirmative actions to be 

7 taken to protect the trade secret; and 

8 ‘‘(iii) in exceptional circumstances that 

9 render an injunction inequitable, that con10 ditions future use of the trade secret upon 

11 payment of a reasonable royalty for no 

12 longer than the period of time for which 

13 such use could have been prohibited; 

14 ‘‘(B) award— 

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

16 by the misappropriation of the trade secret; 

17 and 

18 ‘‘(II) damages for any unjust enrich19 ment caused by the misappropriation of the 

20 trade secret that is not addressed in com21 puting damages for actual loss; or 

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

23 any other methods, the damages caused by 

24 the misappropriation measured by imposi25 tion of liability for a reasonable royalty for 


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1 the misappropriator’s unauthorized disclo2 sure or use of the trade secret; 

3 ‘‘(C) if the trade secret is willfully and ma4 liciously misappropriated, award exemplary 

5 damages in an amount not more than 3 times 

6 the amount of the damages awarded under sub7 paragraph (B); and 

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

9 made in bad faith, a motion to terminate an in10 junction is made or opposed in bad faith, or the 

11 trade secret was willfully and maliciously mis12 appropriated, award reasonable attorney’s fees to 

13 the prevailing party. 

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

15 States shall have original jurisdiction of civil actions 

16 brought under this section. 

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

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

19 after the date on which the misappropriation with respect 

20 to which the action would relate is discovered or by the exer21 cise of reasonable diligence should have been discovered. For 

22 purposes of this subsection, a continuing misappropriation 

23 constitutes a single claim of misappropriation.’’. 

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

25 States Code, is amended— 


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

2 end; 

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

4 the end and inserting a semicolon; and 

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

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

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

8 by a person who knows or has reason to know 

9 that the trade secret was acquired by improper 

10 means; or 

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

12 another without express or implied consent by a 

13 person who— 

14 ‘‘(i) used improper means to acquire 

15 knowledge of the trade secret; 

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

17 knew or had reason to know that the knowl18 edge of the trade secret was— 

19 ‘‘(I) derived from or through a 

20 person who had used improper means 

21 to acquire the trade secret; 

22 ‘‘(II) acquired under cir23 cumstances giving rise to a duty to 

24 maintain the secrecy of the trade secret 

25 or limit the use of the trade secret; or 


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1 ‘‘(III) derived from or through a 

2 person who owed a duty to the person 

3 seeking relief to maintain the secrecy of 

4 the trade secret or limit the use of the 

5 trade secret; or 

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

7 position of the person, knew or had reason 

8 to know that— 

9 ‘‘(I) the trade secret was a trade 

10 secret; and 

11 ‘‘(II) knowledge of the trade secret 

12 had been acquired by accident or mis13 take; 

14 ‘‘(6) the term ‘improper means’— 

15 ‘‘(A) includes theft, bribery, misrepresenta16 tion, breach or inducement of a breach of a duty 

17 to maintain secrecy, or espionage through elec18 tronic or other means; and 

19 ‘‘(B) does not include reverse engineering or 

20 independent derivation; and 

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

22 Act entitled ‘An Act to provide for the registration 

23 and protection of trademarks used in commerce, to 

24 carry out the provisions of certain international con25 ventions, and for other purposes, approved July 5, 


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1 1946 (15 U.S.C. 1051 et seq.) (commonly referred to 

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

3 Act’’)’.’’. 

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

5 title 18, United States Code, is amended, in the matter pre6 ceding paragraph (1), by inserting ‘‘or create a private 

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

8 (d) CONFORMING AMENDMENTS.— 

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

10 18, United States Code, is amended to read as follows: 

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 this 

17 section shall apply with respect to any misappropriation 

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

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

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

21 Act. 

22 (f) RULE OF CONSTRUCTION.—Nothing in the amend23 ments made by this section shall be construed to modify 

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


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

2 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. REPORT ON THEFT OF TRADE SECRETS OCCURRING 

8 ABROAD. 

9 (a) REPORTS.—Not later than 1 year after the date 

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

11 Attorney General, in consultation with the Intellectual 

12 Property Enforcement Coordinator, the Director, and the 

13 heads of other appropriate agencies, shall submit to the 

14 Committees on the Judiciary of the House of Representa15 tives and the Senate, and make publicly available on the 

16 Web site of the Department of Justice and disseminate to 

17 the public through such other means as the Attorney Gen18 eral may identify, a report on the following: 

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

20 trade secrets of United States companies occurring 

21 outside of the United States. 

22 (2) The extent to which theft of trade secrets oc23 curring outside of the United States is sponsored by 

24 foreign governments, foreign instrumentalities, or for25 eign agents. 


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1 (3) The threat posed by theft of trade secrets oc2 curring outside of the United States. 

3 (4) The ability and limitations of trade secret 

4 owners to prevent the misappropriation of trade se5 crets outside of the United States, to enforce any judg6 ment against foreign entities for theft of trade secrets, 

7 and to prevent imports based on theft of trade secrets 

8 overseas. 

9 (5) A breakdown of the trade secret protections 

10 afforded United States companies by each country 

11 that is a trading partner of the United States and en12 forcement efforts available and undertaken in each 

13 such country, including a list identifying specific 

14 countries where trade secret theft, laws, or enforce15 ment is a significant problem for United States com16 panies. 

17 (6) Instances of the Federal Government working 

18 with foreign countries to investigate, arrest, and pros19 ecute entities and individuals involved in the theft of 

20 trade secrets outside of the United States. 

21 (7) Specific progress made under trade agree22 ments and treaties, including any new remedies en23 acted by foreign countries, to protect against theft of 

24 trade secrets of United States companies outside of the 

25 United States. 


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1 (8) Recommendations of legislative and executive 

2 branch actions that may be undertaken to— 

3 (A) reduce the threat of and economic im4 pact caused by the theft of the trade secrets of 

5 United States companies occurring outside of the 

6 United States; 

7 (B) educate United States companies re8 garding the threats to their trade secrets when 

9 taken outside of the United States; 

10 (C) provide assistance to United States 

11 companies to reduce the risk of loss of their trade 

12 secrets when taken outside of the United States; 

13 and 

14 (D) provide a mechanism for United States 

15 companies to confidentially or anonymously re16 port the theft of trade secrets occurring outside of 

17 the United States. 

18 (b) DEFINITIONS.—In this section: 

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

20 Under Secretary of Commerce for Intellectual Prop21 erty and Director of the United States Patent and 

22 Trademark Office. 

23 (2) FOREIGN INSTRUMENTALITY, ETC.—The 

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


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

2 section 1839 of title 18, United States Code. 

3 (3) STATE.—The term ‘‘State’’ includes the Dis4 trict of Columbia and any commonwealth, territory, 

5 or possession of the United States. 

6 (4) UNITED STATES COMPANY.—The term 

7 ‘‘United States company’’ means an organization or8 ganized under the laws of the United States or a 

9 State or political subdivision thereof. 


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Union Calendar No. 494 

113TH CONGRESS 

2D SESSION H. R. 5233 

[Report No. 113–657] 

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 

DECEMBER 11, 2014 

Reported with an amendment, committed to the Comand ordered to be printed mittee of the Whole House on the State of the Union, 


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