II

104TH CONGRESS

2D SESSION H. R. 3723

IN THE SENATE OF THE UNITED STATES

SEPTEMBER 18, 1996

Received

AN ACT

To amend title 18, United States Code, to protect proprietary

economic information, 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 ‘‘Economic Espionage

5 Act of 1996’’.
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1 SEC. 2. PROTECTION OF TRADE SECRETS.

2 (a) IN GENERAL.—Chapter 31 of title 18, United

3 States Code, is amended by adding at the end the follow4 ing:

5 ‘‘§ 670. Protection of trade secrets

6 ‘‘(a) OFFENSE.—Whoever—

7 ‘‘(1) with the intent to, or with reason to be8 lieve that the offense will, benefit any foreign gov9 ernment, foreign instrumentality, or foreign agent;

10 or

11 ‘‘(2) with the intent to divert a trade secret,

12 that is related to or is included in a product that is

13 produced for or placed in interstate or foreign com14 merce, to the economic benefit of anyone other than

15 the owner thereof, and with the intent to, or with

16 reason to believe that the offense will, disadvantage

17 any owner of that trade secret;

18 wrongfully copies or otherwise controls a trade secret, or

19 attempts or conspires to do so shall be punished as pro20 vided in subsection (b).

21 ‘‘(b) PUNISHMENT.—

22 ‘‘(1) GENERALLY.—The punishment for an of23 fense under this section is—

24 ‘‘(A) in the case of an offense under sub25 section (a)(1), a fine under this title or impris-
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1 onment for not more than 25 years, or both;

2 and

3 ‘‘(B) in the case of an offense under sub4 section (a)(2), a fine under this title or impris5 onment for not more than 15 years.

6 ‘‘(2) INCREASED MAXIMUM FINE FOR ORGANI7 ZATIONS.—If an organization commits an offense—

8 ‘‘(A) under subsection (a)(1), the maxi9 mum fine, if not otherwise larger, that may be

10 imposed is $10,000,000; and

11 ‘‘(B) under subsection (a)(2), the maxi12 mum fine, if not otherwise larger, that may be

13 imposed is $5,000,000.

14 ‘‘(c) DEFINITIONS.—As used in this section—

15 ‘‘(1) the term ‘foreign instrumentality’ means

16 any agency, bureau, ministry, component, institu17 tion, association, or any legal, commercial, or busi18 ness organization, corporation, firm, or entity that is

19 substantially owned, controlled, sponsored, com20 manded, managed, or dominated by a foreign gov21 ernment;

22 ‘‘(2) the term ‘foreign agent’ means any officer,

23 employee, proxy, servant, delegate, or representative

24 of a foreign government;
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1 ‘‘(3) the term ‘trade secret’ means all forms

2 and types of financial, business, scientific, technical,

3 economic, or engineering information, including pat4 terns, plans, compilations, program devices, for5 mulas, designs, prototypes, methods, techniques,

6 processes, procedures, programs, or codes, whether

7 tangible or intangible, and whether or how stored,

8 compiled, or memorialized physically, electronically,

9 graphically, photographically, or in writing if—

10 ‘‘(A) the owner thereof has taken reason11 able measures to keep such information secret;

12 and

13 ‘‘(B) the information derives independent

14 economic value, actual or potential, from not

15 being generally known to, and not being readily

16 ascertainable through proper means by, the

17 public; and

18 ‘‘(4) the term ‘owner’, with respect to a trade

19 secret, means the person or entity in whom or in

20 which rightful legal or equitable title to, or license

21 in, the trade secret is reposed.

22 ‘‘(d) CRIMINAL FORFEITURE.—

23 ‘‘(1) Notwithstanding any other provision of

24 State law, any person convicted of a violation under

25 this section shall forfeit to the United States—
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1 ‘‘(A) any property constituting, or derived

2 from, any proceeds the person obtained, directly

3 or indirectly, as the result of such violation; and

4 ‘‘(B) any of the person’s property used, or

5 intended to be used, in any manner or part, to

6 commit or facilitate the commission of such vio7 lation, if the court in its discretion so deter8 mines, taking into consideration the nature,

9 scope, and proportionality of the use of the

10 property in the offense.

11 ‘‘(2) The court, in imposing sentence on such

12 person, shall order, in addition to any other sentence

13 imposed pursuant to this section, that the person

14 forfeit to the United States all property described in

15 this section.

16 ‘‘(3) Property subject to forfeiture under this

17 section, any seizure and disposition thereof, and any

18 administrative or judicial proceeding in relation

19 thereto, shall be governed by the provisions of sec20 tion 413 of the Comprehensive Drug Abuse Preven21 tion and Control Act of 1970 (21 U.S.C. 853), ex22 cept for subsections (d) and (j) of such section,

23 which shall not apply to forfeitures under this sec24 tion.
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1 ‘‘(e) ORDERS TO PRESERVE CONFIDENTIALITY.—In

2 any prosecution or other proceeding under this section, the

3 court shall enter such orders and take such other action

4 as may be necessary and appropriate to preserve the con5 fidentiality of trade secrets, consistent with the require6 ments of the Federal Rules of Criminal and Civil Proce7 dure, the Federal Rules of Evidence, and all other applica8 ble laws. An interlocutory appeal by the United States

9 shall lie from a decision or order of a district court author10 izing or directing the disclosure of any trade secret.

11 ‘‘(f) CIVIL PROCEEDINGS TO ENJOIN VIOLATIONS.—

12 ‘‘(1) GENERALLY.—The Attorney General may,

13 in a civil action, obtain appropriate injunctive relief

14 against any violation of this section.

15 ‘‘(2) EXCLUSIVE JURISDICTION.—The district

16 courts of the United States shall have exclusive

17 original jurisdiction of civil actions under this sub18 section.

19 ‘‘(g) TERRITORIAL APPLICATION.—

20 ‘‘(1) This section applies to conduct occurring

21 within the United States.

22 ‘‘(2) This section also applies to conduct occur23 ring outside the United States if—

24 ‘‘(A) the offender is—
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1 ‘‘(i) a United States citizen or perma2 nent resident alien; or

3 ‘‘(ii) an organization substantially

4 owned or controlled by United States citi5 zens or permanent resident aliens, or in6 corporated in the United States; or

7 ‘‘(B) an act in furtherance of the offense

8 was committed in the United States.

9 ‘‘(h) NONPREEMPTION OF OTHER REMEDIES.—This

10 section shall not be construed to preempt or displace any

11 other remedies, whether civil or criminal, provided by

12 United States Federal, State, commonwealth, possession,

13 or territory law for the misappropriation of a trade secret.

14 ‘‘(i) EXCEPTIONS TO PROHIBITION.—

15 ‘‘(1) This section does not prohibit and shall

16 not impair any otherwise lawful activity conducted

17 by an agency or instrumentality of the United

18 States, a State, or a political subdivision of a State.

19 ‘‘(2) This section does not prohibit the report20 ing of any suspected criminal activity to any law en21 forcement agency or instrumentality of the United

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

23 to any intelligence agency of the United States, or

24 to Congress.’’.
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1 (b) CLERICAL AMENDMENT.—The table of sections

2 at the beginning of chapter 31, United States Code, is

3 amended by adding at the end the following new item:

‘‘670. Protection of trade secrets.’’.

4 SEC. 3. WIRE AND ELECTRONIC COMMUNICATIONS INTER5 CEPTION AND INTERCEPTION OF ORAL COM6 MUNICATIONS.

7 Section 2516(1)(c) of title 18, United States Code, is

8 amended by inserting ‘‘section 670 (relating to economic

9 espionage),’’ after ‘‘(bribery in sporting contests),’’.

Passed the House of Representatives September 17,

1996.

Attest: ROBIN H. CARLE,

Clerk.