I 

113TH CONGRESS 

2D SESSION H. R. 5233 

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 

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, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Trade Secrets Protec5 tion Act of 2014’’. 


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1 SEC. 2. FEDERAL JURISDICTION FOR THEFT OF TRADE SE2 CRETS. 

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

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

5 inserting the following: 

6 ‘‘(b) PRIVATE CIVIL ACTIONS.— 

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

8 may bring a civil action under this subsection if the 

9 person is aggrieved by a misappropriation of a trade 

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

11 or intended for use in, interstate or foreign com12 merce. 

13 ‘‘(2) CIVIL SEIZURE.— 

14 ‘‘(A) IN GENERAL.— 

15 ‘‘(i) APPLICATION.—Based on an affi16 davit or verified complaint satisfying the 

17 requirements of this paragraph, the court 

18 may, upon ex parte application, issue an 

19 order providing for the seizure of property 

20 necessary to preserve evidence in a civil ac21 tion brought under paragraph (1) or to 

22 prevent the propagation or dissemination 

23 of the trade secret that is the subject of 

24 the action. 

25 ‘‘(ii) REQUIREMENTS FOR ISSUING

26 ORDER.—The court may not grant an apVerDate Mar 15 2010 22:17 Jul 30, 2014 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H5233.IH H5233

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1 plication under clause (i) unless the court 

2 finds that it clearly appears from specific 

3 facts that— 

4 ‘‘(I) an order issued pursuant to 

5 Rule 65(b) of the Federal Rules of 

6 Civil Procedure would be inadequate 

7 to achieve the purpose of this para8 graph because the party to which the 

9 order would be issued would evade, 

10 avoid, or otherwise not comply with 

11 such an order; 

12 ‘‘(II) an immediate and irrep13 arable injury will occur if such seizure 

14 is not ordered; 

15 ‘‘(III) the harm to the applicant 

16 of denying the application outweighs 

17 the harm to the legitimate interests of 

18 the person against whom seizure 

19 would be ordered of granting the ap20 plication and substantially outweighs 

21 the harm to any third parties who 

22 may be harmed by such seizure; 

23 ‘‘(IV) the applicant is likely to 

24 succeed in showing that the person 

25 against whom seizure would be orVerDate Mar 15 2010 22:17 Jul 30, 2014 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H5233.IH H5233

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1 dered misappropriated the trade se2 cret and is in possession of the trade 

3 secret; 

4 ‘‘(V) the application describes 

5 with reasonable particularity the mat6 ter to be seized and, to the extent rea7 sonable under the circumstances, 

8 identifies the location where the mat9 ter is to be seized; 

10 ‘‘(VI) the person against whom 

11 seizure would be ordered, or persons 

12 acting in concert with such person, 

13 would destroy, move, hide, or other14 wise make such matter inaccessible to 

15 the court, if the applicant were to pro16 ceed on notice to such person; and 

17 ‘‘(VII) the applicant has not pub18 licized the requested seizure. 

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

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

21 ‘‘(i) set forth findings of fact and con22 clusions of law required for the order; 

23 ‘‘(ii) provide for the seizure of any 

24 property in a manner that minimizes any 

25 interruption of the business operations of 


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1 third parties and, to the extent possible, 

2 does not interrupt those legitimate busi3 ness operations of the person accused of 

4 misappropriating the trade secret that are 

5 unrelated to the trade secret that has al6 legedly been misappropriated; 

7 ‘‘(iii) be accompanied by an order pro8 tecting the property from disclosure by re9 stricting the access of the applicant, in10 cluding during the seizure, and prohibiting 

11 any copies, in whole or in part, of the 

12 seized property, to prevent undue damage 

13 to the party against whom the order has 

14 issued or others, until such parties have an 

15 opportunity to be heard in court; 

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

17 earliest possible time, and not later than 7 

18 days after the order has issued, unless the 

19 party against whom the order is directed 

20 and others harmed by the order consent to 

21 another date for such hearing, except that 

22 a party against whom the order has issued 

23 or any person harmed by the order may 

24 move the court at any time to dissolve or 


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1 modify the order after giving notice to the 

2 applicant who obtained the order; and 

3 ‘‘(v) require the person obtaining the 

4 order to provide the security determined 

5 adequate by the court for the payment of 

6 such damages as any person may be enti7 tled to recover as a result of a wrongful or 

8 excessive seizure or wrongful or excessive 

9 attempted seizure under this paragraph. 

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

11 court shall take appropriate action to protect 

12 the person against whom an order under this 

13 paragraph is directed from publicity, by or at 

14 the behest of the person obtaining the order, 

15 about such order and any seizure under such 

16 order. 

17 ‘‘(D) MATERIALS IN CUSTODY OF

18 COURT.—Any materials seized under this para19 graph shall be taken into the custody of the 

20 court. The court shall secure the seized material 

21 from physical and electronic access during the 

22 seizure and while in the custody of the court. 

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

24 order that service of a copy of the order under 

25 this paragraph shall be made by a Federal law 


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1 enforcement officer, or may be made by a State 

2 or local law enforcement officer, who, upon 

3 making service, shall carry out the seizure 

4 under the order. 

5 ‘‘(F) ACTION FOR DAMAGE CAUSED BY

6 WRONGFUL SEIZURE.—A person who suffers 

7 damage by reason of a wrongful or excessive 

8 seizure under this paragraph has a cause of ac9 tion against the applicant for the order under 

10 which such seizure was made, and shall be enti11 tled to the same relief as is provided under sec12 tion 34(d)(11) of the Trademark Act of 1946 

13 (15 U.S.C. 1116(d)(11)). The security posted 

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

15 not limit the recovery of third parties for dam16 ages. 

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

18 under this subsection with respect to the misappro19 priation of a trade secret, a court may— 

20 ‘‘(A) grant an injunction— 

21 ‘‘(i) to prevent any actual or threat22 ened misappropriation described in para23 graph (1) on such terms as the court 

24 deems reasonable; 


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1 ‘‘(ii) if determined appropriate by the 

2 court, requiring affirmative actions to be 

3 taken to protect the trade secret; and 

4 ‘‘(iii) in exceptional circumstances 

5 that render an injunction inequitable, that 

6 conditions future use of the trade secret 

7 upon payment of a reasonable royalty for 

8 no longer than the period of time for which 

9 such use could have been prohibited; 

10 ‘‘(B) award— 

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

12 by the misappropriation of the trade se13 cret; and 

14 ‘‘(II) damages for any unjust enrich15 ment caused by the misappropriation of 

16 the trade secret that is not addressed in 

17 computing damages for actual loss; or 

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

19 any other methods, the damages caused by 

20 the misappropriation measured by imposi21 tion of liability for a reasonable royalty for 

22 the misappropriator’s unauthorized disclo23 sure or use of the trade secret; 

24 ‘‘(C) if the trade secret is willfully and ma25 liciously misappropriated, award exemplary 


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1 damages in an amount not more than 3 times 

2 the amount of the damages awarded under sub3 paragraph (B); and 

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

5 made in bad faith, a motion to terminate an in6 junction is made or opposed in bad faith, or the 

7 trade secret was willfully and maliciously mis8 appropriated, award reasonable attorney’s fees 

9 to the prevailing party. 

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

11 United States shall have original jurisdiction of civil ac12 tions brought under this section. 

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

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

15 after the date on which the misappropriation with respect 

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

17 exercise of reasonable diligence should have been discov18 ered. For purposes of this subsection, a continuing mis19 appropriation constitutes a single claim of misappropria20 tion.’’. 

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

22 States Code, is amended— 

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

24 end; 


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

2 the end and inserting a semicolon; and 

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

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

5 ‘‘(A) acquisition of a trade secret of an6 other by a person who knows or has reason to 

7 know that the trade secret was acquired by im8 proper means; or 

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

10 another without express or implied consent by 

11 a person who— 

12 ‘‘(i) used improper means to acquire 

13 knowledge of the trade secret; 

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

15 knew or had reason to know that the 

16 knowledge of the trade secret was— 

17 ‘‘(I) derived from or through a 

18 person who had used improper means 

19 to acquire the trade secret; 

20 ‘‘(II) acquired under cir21 cumstances giving rise to a duty to 

22 maintain the secrecy of the trade se23 cret or limit the use of the trade se24 cret; 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 

4 of the trade secret or limit the use of 

5 the 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 se12 cret had been acquired by accident or 

13 mistake; 

14 ‘‘(6) the term ‘improper means’— 

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

17 duty to maintain secrecy, or espionage through 

18 electronic or other means; and 

19 ‘‘(B) does not include reverse engineering 

20 or independent derivation; and 

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

22 the Act entitled ‘An Act to provide for the registra23 tion and protection of trademarks used in commerce, 

24 to carry out the provisions of certain international 

25 conventions, and for other purposes, approved July 


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1 5, 1946 (15 U.S.C. 1051 et seq.) (commonly re2 ferred to as the ‘‘Trademark Act of 1946’’ or the 

3 ‘‘Lanham Act’’)’.’’. 

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

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

6 preceding 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 fol11 lows: 

12 ‘‘§ 1836. Civil proceedings’’. 

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

14 18, United States Code, is amended by striking the 

15 item relating to section 1836 and inserting the fol16 lowing: 

‘‘1836. Civil proceedings.’’. 

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

18 this section shall apply with respect to any misappropria19 tion of a trade secret (as defined in section 1839 of title 

20 18, United States Code, as amended by this section) for 

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

22 of this Act. 

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

24 amendments made by this section shall be construed to 

25 modify the rule of construction under section 1838 of title 


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

2 of law. 

Æ 


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