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senate Bill S. 1890

If a Trade Secret is Stolen, Should the Owner be Able to Sue in Federal Court?

Argument in favor

Owners of trade secrets that were misappropriated should be able to sue in federal district courts to recover damages, given that trade secret theft is often an issue that crosses state and national borders.

Brandon's Opinion
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04/04/2016
Intellectual property theft, being able to cross state and national boundaries, falls under the commerce clause of article 1 of the constitution and therefore should be tried in federal courts.
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David's Opinion
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04/28/2016
Yes, it should be illegal to steal anything, including trade secrets, and if such a theft involves interstate commerce, the correct jurisdiction for pursuit of civil damages would be federal court. Why is this not already the case?
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Chutt's Opinion
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04/05/2016
I believe that any legal issue that crosses state lines should be adjudicated in a federal court
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Argument opposed

Federal courts don’t need to deal with lawsuits related to trade secret theft. There shouldn’t be immunity for people who confidentially report suspected misappropriation to law enforcement or attorneys.

Rudy's Opinion
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04/04/2016
I feel like this will only give more power to big corporations over small business. We need to reform patent laws before we decide how to enforce them. As of now, patent laws only favor large corporations and doesn't motivate innovation. This causes larger market control by one company and extends its lifespan.
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Dylan's Opinion
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04/04/2016
I would like to see more manufacturing done here in the U.S. This could potentially stimulate our economy by bringing more jobs to America if stolen secrets are a common problem.
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Connor's Opinion
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04/04/2016
Honestly, this happens more often then people think. They should be able to sue, but I don't know if the federal courts should be the ones bothered with these cases.
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What is Senate Bill S. 1890?

This bill would enable individuals and companies to sue in federal courts to recover damages from the misappropriation or theft of trade secrets, while also ensuring the confidentiality of trade secrets during legal proceedings. A trade secret is a type of intellectual property that, unlike a patent, is concealed from public knowledge to give the owner an economic advantage over its competitors. Under current law, only the Dept. of Justice can file suit in federal court for trade secret misappropriation.

The owner of a misappropriated trade secret would be able to file a lawsuit in a federal district court, and the court would then be able to issue an order to seize any property necessary to preserve evidence in the case. All information gathered or stored by the court would be required to be protected from physical or electronic access while in the court’s custody. Any relevant civil suit filed in federal court must be initiated within three years of when the misappropriation should have reasonably been discovered.

Federal courts would have the following options at their disposal for remedying the case:

  • Grant an injunction to prevent actual or threatened trade secret misappropriation and take necessary steps to protect the trade secret;

  • Award damages for either the actual damages caused by the misappropriation, unjust enrichment not covered by the actual damages, or to require reasonable royalties be paid as compensation;

  • Award exemplary damages of up to two-times the award described above, plus reasonable attorney’s fees if the trade secret was willfully and maliciously misappropriated;

  • Award reasonable attorney’s fees to the prevailing party if a claim of misappropriation is shown to be made in bad faith based on circumstantial evidence, or a motion to terminate an injunction is made or opposed in bad faith.

Any individual who confidentially discloses a trade secret to a government official or an attorney in the process of reporting suspected misappropriation would be immune from criminal or civil liability. Companies would be required to inform employees about their immunity under the above circumstances in portions of contracts or corporate policy documents that discuss the handling and use of trade secrets.

The Dept. of Commerce and the Patent and Trademark Office would be required to provide relevant congressional committees with a report on the theft of trade secrets belonging to U.S. entities by foreign governments or businesses.

Impact

Individuals and businesses whose trade secrets have been misappropriated; those who misappropriate trade secrets; federal courts; the Patent and Trademark Office; and the Dept. of Commerce.

Cost of Senate Bill S. 1890

$0.00
The CBO estimates that implementing this bill would have an insignificant effect on the federal budget.

More Information

In-Depth: Sponsoring Sen. Orrin Hatch (R-UT) introduced this bill to provide owners of trade secrets that were misappropriated a way to recover damages in federal court:

“Unfortunately, in today’s global information age, there are endless examples of how easy—and rewarding—it can be to steal trade secrets. Yet there are no federal remedies available to help victim companies recover from their losses. The Defend Trade Secrets Act of 2015 establishes a uniform standard for what constitutes trade secret theft and will give U.S. companies the ability to protect their trade secrets in federal court.”

This legislation was passed unanimously by the Senate Judiciary Committee, and it has a total of 64 cosponsors in the Senate — including 36 Republicans, 27 Democrats, and one Independent. Numerous companies and organizations have also expressed their approval of this bill.


Of Note: According to a 2014 report by PwC, the economic cost of trade secret theft to America’s economy runs between one and three percent of U.S. gross domestic product (GDP). Given that U.S. GDP was estimated at nearly $18 trillion in 2015, the projected cost of trade secret theft would be between $180 - $540 billion.



Media:

Summary by Eric Revell
(Photo Credit: Flickr user opensourceway)

AKA

Defend Trade Secrets Act of 2016

Official Title

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.

bill Progress


  • EnactedMay 11th, 2016
    The President signed this bill into law
  • The house Passed April 27th, 2016
    Roll Call Vote 410 Yea / 2 Nay
      house Committees
      Committee on the Judiciary
      Courts, Intellectual Property, and the Internet
  • The senate Passed April 4th, 2016
    Roll Call Vote 87 Yea / 0 Nay
      senate Committees
      Committee on the Judiciary
    IntroducedJuly 29th, 2015

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    Intellectual property theft, being able to cross state and national boundaries, falls under the commerce clause of article 1 of the constitution and therefore should be tried in federal courts.
    Like (6)
    Follow
    Share
    I feel like this will only give more power to big corporations over small business. We need to reform patent laws before we decide how to enforce them. As of now, patent laws only favor large corporations and doesn't motivate innovation. This causes larger market control by one company and extends its lifespan.
    Like (30)
    Follow
    Share
    Yes, it should be illegal to steal anything, including trade secrets, and if such a theft involves interstate commerce, the correct jurisdiction for pursuit of civil damages would be federal court. Why is this not already the case?
    Like (4)
    Follow
    Share
    I would like to see more manufacturing done here in the U.S. This could potentially stimulate our economy by bringing more jobs to America if stolen secrets are a common problem.
    Like (2)
    Follow
    Share
    Honestly, this happens more often then people think. They should be able to sue, but I don't know if the federal courts should be the ones bothered with these cases.
    Like (2)
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    It's their right to ownership
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    Making it easier for lawsuits doesn't help. I think it would just encourage corporations to sue smaller businesses that want to get into the market.
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    If I had a trade secret and someone stole it (China), then Yes, I would sue.
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    Stealing of private information breaks all morals.
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    It's already a crime. Why are we asking ourselves this question?
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    Trade theft, is theft. If a case needs to go to the federal level it should be allowed to just like any other case would.
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    If they own them they should be able to recover them.
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    Go to nights and patent creeps are killing innovation and advancements. There are no guarantees this bill won't be used to choke of competition in many industries.
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    I just think it's s crime
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    This was a really hard decision for me. Ultimately it came down to one question: "is an idea property?" And I feel that, as a writer, I do feel that my ideas belong to me. I would absolutely hate it if someone took one of my ideas and got rich off of it. On the other hand, taking, modifying and improving ideas is how we evolve as a culture. Just look at Disney, I know they're not the best example but they were the first one that came to mind. Patent laws should be reformed, no question about it, but we also need to recognize the inherent value of ideas and what they mean to their creators.
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    People who really value capitalism value lack of government interference. People who don't care about the values of capitalism wouldn't care about wasting government resources like this is what is a move on American protectionism. It is not the US Federal Government's responsibility to protect private corporations' trade secrets
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    Yes, BUT they should start in the local and state courts first. If those have been exhausted and they still don't get what they're after, then yes, they should be able to sue in federal court.
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    A
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    Yea
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    If it's their idea, They own the rights to it!
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