Defend Trade Secrets Act of 2016

Floor Speech

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Mr. NADLER. Mr. Speaker, I rise in strong support of S. 1890, the Defend Trade Secrets Act of 2016. This long overdue legislation would protect businesses across the country from the growing threat of trade secrets theft by creating a uniform Federal civil cause of action for misappropriation of trade secrets.

Trade secrets are proprietary business information that derive their value from being and remaining secret. This includes secret recipes, software codes, and manufacturing processes--information that, if disclosed, could prove ruinous to a company. As the United States economy becomes more and more knowledge- and service-based, trade secrets are increasingly becoming the foundation of businesses across the country, with one estimate placing the value of trade secrets in the United States at $5 trillion.

Unfortunately, with such fortunes resting on trade secrets, theft of this property is inevitable. And in today's digital environment, it has never been easier to transfer stolen property across the globe with the click of a button. By one estimate, the American economy loses annually as much as $300 billion or more due to misappropriation of trade secrets, leading to loss of up to 2.1 billion jobs each year.

With so much at stake, it is absolutely vital that the law include strong protections against theft of trade secrets. However, our current patchwork of Federal and State laws has proven inadequate to the job. While the Federal Government may bring criminal prosecutions and may move for civil injunctions, this power is rarely exercised and often fails to adequately compensate the victims.

The States provide civil causes of action for victims of theft, with money damages available, but this system has not proven efficient or effective for incidents that cross State and, sometimes, international borders.

Once upon a time, trade secrets might have been kept in a file cabinet somewhere, and would-be thieves would have to spirit away a physical copy, making it likely that they would be caught before crossing State lines. But today, trade secrets can be loaded onto a thumb drive and mailed out of State or even sent electronically anywhere across the globe in an instant.

Pursuing a defendant and the evidence in dispute across State lines present a host of challenges for victims of trade secret theft, particularly when time is of the essence. The need for a Federal solution is, therefore, clear.

The Defend Trade Secrets Act fills this gap by creating a uniform Federal civil cause of action for theft of trade secrets. It also provides for expedited ex parte seizure of property, but only in extraordinary circumstances where necessary to preserve evidence or prevent dissemination.

As the lead Democratic cosponsor of H.R. 3326, the House companion to this legislation, I am very pleased that this bill is on the floor today, and I want to thank everyone who worked hard to bring us to this point. In particular, I want to thank the sponsor of H.R. 3326, the gentleman from Georgia (Mr. Collins), as well as Ranking Member Conyers, Chairman Goodlatte, and the gentleman from New York (Mr. Jeffries). I also appreciate the sponsors of the Senate bill, S. 1890, Senators Hatch and Coons, for all of their work on this legislation.

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Mr. NADLER. The bill we are considering today represents the culmination of over 2 years of negotiations with various stakeholders and has strong bipartisan support, with 164 cosponsors in the House and 65 in the Senate.

This is good legislation that carefully balances the rights of defendants and the needs of American businesses to protect their most valuable assets. The Senate passed the bill 87-0. With passage here today, we can send it straight to the President's desk.

I urge my colleagues to support the bill.

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