Senate passes legislation to protect trade secrets

AP News
Posted: Apr 04, 2016 6:27 PM

WASHINGTON (AP) — The Senate Monday passed a bill taking aim at those who steal trade secrets from other businesses.

The bipartisan measure passed the chamber by a unanimous 87-0 vote and goes to the House, where companion legislation has yet to get going but enjoys supports from both liberal Democrats and GOP conservatives. The White House also supports the bill.

Trade secrets include sales and distribution methods, advertising strategies, manufacturing methods, and lists of suppliers and clients.

The measure would permit people and businesses whose trade secrets are stolen to sue for damages in federal court, just as those who have other kinds of intellectual property misappropriated, such as patents and trademarks.

Although it's a federal crime to steal trade secrets, currently victims can only sue in state courts.

The legislation also permits a court to order the seizure of property if it will protect trade secrets that are the subject of a lawsuit.

Supporters of the legislation say that in the digital world, trade secrets are far more vulnerable than when business plans or a secret formula were locked in the office safe. Businesses use electronic means to share secrets with far-flung business partners, but that can put enormous amounts of information at risk if it's downloaded from a computer or the cloud.

Backers say the legislation is needed for businesses to confidently develop the new products and services of the future — and that trade secret theft costs the U.S. economy more than $300 billion a year.

"Maintaining the status quo is woefully insufficient," said top sponsor Sen. Orrin Hatch, R-Utah. "U.S. companies must be able to protect their trade secrets in federal court."

Minority Leader Harry Reid, D-Nev., wasn't impressed, saying that the measure was so noncontroversial that it didn't require a roll call vote and that Majority Leader Mitch McConnell, R-Ky., scheduled one just to make the Judiciary Committee — which is embroiled in a huge fight over the Supreme Court nomination of Merrick Garland — look good.

"I don't see today why the Judiciary Committee should be given a few pats on the back," Reid said.