Bill Bandwagon: Senators Draft Measure To Expand The Economic Espionage Act


Yet another federal trade secrets bill may soon join the growing stack of legislation already under consideration in Congress.  This proposed bill would make modest changes to the Economic Espionage Act (“EEA”), which designates the theft of a trade secret a federal crime.

We emphasize that the “discussion draft” by Sens. Sheldon Whitehouse (D-R.I.) and Lindsey Graham (R-S.C.) is merely that—a draft bill that has not been introduced.  Still, the fact of the proposed bill, and the fact that the co-sponsors felt compelled to issue a press release about the measure while it is still on the drawing board, confirm that trade secret thieves (along with patent trolls) are the boogeymen du jour on Capitol Hill.

This proposed bill, if introduced and enacted, would incrementally extend the EEA’s application to foreign trade secret theft.  Currently the EEA only applies to conduct abroad if the offender is a U.S. citizen or permanent resident alien, or where an act in furtherance of the overseas offense was committed in the United States.  Under the proposed bill, the EEA would also apply where (1) an act in furtherance of the trade secret theft or espionage occurred “through means or facilities located in the United States,” and (2) an individual or entity in the United States was harmed by the theft.  Under this proposed measure, the EEA would also cover trade secret theft sponsored by foreign governments.

The proposed legislation would add economic espionage and trade secret theft to the definition of “racketeering activity” under the RICO statutes— a seeming attempt to give the government more tools to prosecute these types of cases.

Finally, the proposed bill would give trade secret owners standing to support court orders sealing public court files to maintain the confidentiality of the trade secrets in EEA prosecutions brought by the government.

Last year, Whitehouse co-sponsored another trade secret bill— the Protecting American Trade Secrets and Innovation Act of 2012, which would have provided federal civil jurisdiction for the theft of trade secrets.  The bill died with the last Congress.  Rep. Zoe Lofgren (D-Cal.) has introduced legislation that would amend the EEA to provide for a federal civil cause of action.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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