Companies in all industries and fields of technology — including automotive, software, chemical, manufacturing, pharmaceutical, and biotechnology — have long needed a federal civil remedy for trade secret theft. They invest significant resources to develop proprietary know-how, such as manufacturing processes, industrial techniques, formulas, codes, and designs. The Intellectual Property Owners Association, a trade association representing more than 200 of these companies, recently adopted a resolution supporting the Defend Trade Secrets Act, which creates a federal civil cause of action for the owner of a misappropriated trade secret.
The DTSA was approved unanimously by the Senate Judiciary Committee and is up for a vote by the full Senate on Monday, April 4. The bill has broad support from industry and within Congress. In fact, more than 60 Senators have co-sponsored S. 1890 and there are more than 125 co-sponsors of its House counterpart (H.R. 3326). We are enthusiastically optimistic that the bill will pass the Senate and urge the House to take it up without delay — the time to act to protect our trade secrets is now.
This legislation was developed in the spirit of collaboration and consensus-building. We applaud its authors, Sens. Orrin Hatch, R-Utah, and Chris Coons, D-Del., and Reps. Doug Collins, R-Ga., and Jerrold Nadler, D-N.Y., for taking time to consider and address various industries’ concerns, and we thank the bill’s co-sponsors for their strong leadership, particularly in the current climate of political divisiveness.
The DTSA represents a valuable tool to remedy trade secret theft. The current legal tools available are inefficient and inconsistent with all other areas of intellectual property law, where federal civil remedies exist. Current federal law in this area, covered by the Economic Espionage Act, is limited. Though the FBI and Department of Justice can use this law, they have limited resources and numerous priorities and are not able to pursue all trade secret thefts. Likewise, state trade secret laws are not well-suited to respond to the movement of trade secrets across state and international borders or to act swiftly to preserve evidence and protect trade secrets from being further divulged.
The DTSA will create a federal remedy that will provide a uniform legal framework for our members and others to protect their trade secrets. The bill streamlines discovery and other procedural matters and incorporates existing standards already shared by many states. It also provides for ex parte seizure orders in limited circumstances. Recent modifications added language that ex parte seizures will be granted under extraordinary circumstances, acknowledging the judiciary’s general disfavor of ex parte procedures but still providing a much needed avenue for ex parte seizures in this day of electronic misappropriation.
A federal civil remedy is also important to our members’ global competitiveness. International markets are affected by how countries protect intellectual property. Enacting this legislation will place the United States in a position to promote strong trade secrets protection globally, both by creating the “gold standard” by which countries can model their trade secrets laws and by placing the United States in a better position to negotiate trade agreements and other international treaties that provide strong trade secrets protection. America is a leader in innovation stimulated by strong intellectual property rights. The DTSA is a vehicle for the United States to further that leadership by better protecting trade secrets. Every day without this law, our companies are losing millions of dollars to trade secret theft. Congress must act now to give our companies the tools they need to remedy the theft of their intellectual property and protect the American economy from this ever-evolving threat to innovation.
Mark W. Lauroesch is executive director at Intellectual Property Owners Association. Thinking of submitting an op-ed to the Washington Examiner? Be sure to read our guidelines on submissions.
