IB
Union Calendar No. 426
104TH CONGRESS
2D SESSION
H. R. 3723
[Report No. 104–788]
To amend title 18, United States Code, to protect proprietary economic
information, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JUNE 26, 1996
Mr. MCCOLLUM (for himself and Mr. SCHUMER) introduced the following bill;
which was referred to the Committee on the Judiciary
SEPTEMBER 16, 1996
Additional sponsor: Mr. HAMILTON
SEPTEMBER 16, 1996
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 June 26, 1996]
A BILL
To amend title 18, United States Code, to protect proprietary
economic information, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Economic Espionage
Act of 1996’’.
SEC. 2. PROTECTION OF TRADE SECRETS.
(a) IN GENERAL.—Chapter 31 of title 18, United
States Code, is amended by adding at the end the following:
‘‘§ 670. Protection of trade secrets
‘‘(a) OFFENSE.—Whoever—
‘‘(1) with the intent to, or with reason to believe
that the offense will, benefit any foreign government,
foreign instrumentality, or foreign agent; or
‘‘(2) with the intent to divert a trade secret, that
is related to or is included in a product that is pro-
duced for or placed in interstate or foreign commerce,
to the economic benefit of anyone other than the
owner thereof, and with the intent to, or with reason
to believe that the offense will, disadvantage any
owner of that trade secret;
wrongfully copies or otherwise controls a trade secret, or
attempts or conspires to do so shall be punished as provided
in subsection (b).
‘‘(b) PUNISHMENT.—
‘‘(1) GENERALLY.—The punishment for an of-
fense under this section is—
‘‘(A) in the case of an offense under sub-
section (a)(1), a fine under this title or impris-
onment for not more than 25 years, or both; and
‘‘(B) in the case of an offense under sub-
section (a)(2), a fine under this title or impris-
onment for not more than 15 years.
‘‘(2) INCREASED MAXIMUM FINE FOR ORGANIZA-
TIONS.—If an organization commits an offense—
‘‘(A) under subsection (a)(1), the maximum
fine, if not otherwise larger, that may be im-
posed is $10,000,000; and
‘‘(B) under subsection (a)(2), the maximum
fine, if not otherwise larger, that may be im-
posed is $5,000,000.
‘‘(c) DEFINITIONS.—As used in this section—
‘‘(1) the term ‘foreign instrumentality’ means
any agency, bureau, ministry, component, institution,
association, or any legal, commercial, or business or-
ganization, corporation, firm, or entity that is sub-
stantially owned, controlled, sponsored, commanded,
managed, or dominated by a foreign government;
‘‘(2) the term ‘foreign agent’ means any officer,
employee, proxy, servant, delegate, or representative of
a foreign government;
‘‘(3) the term ‘trade secret’ means all forms and
types of financial, business, scientific, technical, eco-
nomic, or engineering information, including pat-
terns, plans, compilations, program devices, formulas,
designs, prototypes, methods, techniques, processes,
procedures, programs, or codes, whether tangible or
intangible, and whether or how stored, compiled, or
memorialized physically, electronically, graphically,
photographically, or in writing if—
‘‘(A) the owner thereof has taken reasonable
measures to keep such information secret; and
‘‘(B) the information derives independent
economic value, actual or potential, from not
being generally known to, and not being readily
ascertainable through proper means by, the pub-
lic; and
‘‘(4) the term ‘owner’, with respect to a trade se-
cret, means the person or entity in whom or in which
rightful legal or equitable title to, or license in, the
trade secret is reposed.
‘‘(d) CRIMINAL FORFEITURE.—
‘‘(1) Notwithstanding any other provision of
State law, any person convicted of a violation under
this section shall forfeit to the United States—
‘‘(A) any property constituting, or derived
from, any proceeds the person obtained, directly
or indirectly, as the result of such violation; and
‘‘(B) any of the person’s property used, or
intended to be used, in any manner or part, to
commit or facilitate the commission of such vio-
lation, if the court in its discretion so deter-
mines, taking into consideration the nature,
scope, and proportionality of the use of the prop-
erty in the offense.
‘‘(2) The court, in imposing sentence on such
person, shall order, in addition to any other sentence
imposed pursuant to this section, that the person for-
feit to the United States all property described in this
section.
‘‘(3) Property subject to forfeiture under this sec-
tion, any seizure and disposition thereof, and any ad-
ministrative or judicial proceeding in relation there-
to, shall be governed by the provisions of section 413
of the Comprehensive Drug Abuse Prevention and
Control Act of 1970 (21 U.S.C. 853), except for sub-
sections (d) and (j) of such section, which shall not
apply to forfeitures under this section.
‘‘(e) ORDERS TO PRESERVE CONFIDENTIALITY.—In
any prosecution or other proceeding under this section, the
court shall enter such orders and take such other action as
may be necessary and appropriate to preserve the confiden-
tiality of trade secrets, consistent with the requirements of
the Federal Rules of Criminal and Civil Procedure, the Fed-
eral Rules of Evidence, and all other applicable laws. An
interlocutory appeal by the United States shall lie from a
decision or order of a district court authorizing or directing
the disclosure of any trade secret.
‘‘(f) CIVIL PROCEEDINGS TO ENJOIN VIOLATIONS.—
‘‘(1) GENERALLY.—The Attorney General may,
in a civil action, obtain appropriate injunctive relief
against any violation of this section.
‘‘(2) EXCLUSIVE
JURISDICTION.—The district
courts of the United States shall have exclusive origi-
nal jurisdiction of civil actions under this subsection.
‘‘(g) TERRITORIAL APPLICATION.—
‘‘(1) This section applies to conduct occurring
within the United States.
‘‘(2) This section also applies to conduct occur-
ring outside the United States if—
‘‘(A) the offender is—
‘‘(i) a United States citizen or perma-
nent resident alien; or
‘‘(ii) an organization substantially
owned or controlled by United States citi-