The House on Wednesday passed legislation aimed at stopping commercial espionage. Following the 410-2 vote, the bill will head to President Obama, who is expected to sign it into law.
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The “Defend Trade Secrets Act,” which would allow companies to sue in federal court for damages resulting from the theft of proprietary information, passed the Senate this month 87-0. Though trade theft is already a crime, companies presently need to work through state courts as part of a process that has done little to deter misdeeds to date.
“Current law does not provide a full range of tools for law enforcement to protect against theft of trade secrets, and the Department of Justice lacks the resources to prosecute many trade secrets cases,” Rep. Doug Collins, R-Ga., the legislation’s chief Republican sponsor in the House, said in a statement this month.
Collins added that the bill would create “a uniform federal standard for trade secret misappropriation” and defend “against the economic harms created by trade secret theft.”
Supporters said a case involving the South Korean company Kolon Industries illustrates the need for an enhanced legal process. A U.S. court found the company guilty in 2011 of stealing information about Kevlar body armor from Delaware-based DuPont. Resulting damages were estimated to be $1 billion, for which Kolon was ordered to pay $275 million in restitution.
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However, the bill may figure most prominently into deterring theft by Chinese companies, most of which are backed by Beijing. In spite of a September agreement with the country that the activity would end, U.S. Director of National Intelligence James Clapper told members Congress in February there was little indication the agreement was being upheld because of “the perceived payoff and the lack of significant consequences.”
China has targeted American defense contractors Boeing, Raytheon and Lockheed Martin over the years in order to obtain designs for products that include weapons systems, missile defenses and fighter jets, most notably the multibillion-dollar F-35 program.
