Pittsburgh, Pennsylvania Trade Secret and DTSALaw® | Lawyers | The Protecting American Intellectual Property Act | 2022 | S. 1294

In furtherance of the U.S. Government’s effort to protect American intellectual property, the House of Representatives passed the Protecting American Intellectual Property Act on December 22, 2022. This quickly followed the Senate’s passing of the Act on December 20, 2022. The Act now goes to President Biden’s desk to be entered into law or vetoed. See Text of the Enrolled Bill here.

The Protecting American Intellectual Property Act requires that the President periodically report “a list of foreign individuals and entities that have knowingly engaged in, benefited from, or assisted in the significant theft of U.S. trade secrets that materially contributed to a significant threat to U.S. national security, foreign policy, or economic health.”[1] The first report will be six (6) months after the Act is entered into law, with an annual report every year thereafter. The report shall also list foreign individuals who are chief executive officers or board members of any foreign entity engaging in the theft identified by any report.

Subsequently, the bill requires:

• For any firm identified in the report to Congress, the President must impose at least five sanctions from a comprehensive list. The list includes property blocking sanctions, export prohibitions, the prohibition of loans from U.S. and international financial institutions, procurement sanctions, and prohibition of banking transactions.
• For any individual identified in the report to Congress, the President must impose property blocking sanctions and must prohibit the individual’s entry into the United States.

This Act, if signed by the President, stands to potentially assist American businesses in protecting their trade secrets from foreign actors in addition to the protections afforded by the Defend Trade Secrets Act (DTSA). Though the DTSA does not expressly state that a private right of action may be brought against an extraterritorial defendant, it does provide that “this chapter” “also applies to conduct occurring outside the United States if . . . an act in furtherance of the offense was committed in the United States.”  18 U.S.C. § 1837. The DTSA and the Protecting American Intellectual Property Law Act share the same definition of “trade secret” at 18 U.S.C. § 1839.  Whether businesses will be able to participate in some fashion in the Presidential reports is currently unclear. However, at the very least, businesses contracting with the government or involved in critical infrastructure are likely to benefit from this development in U.S. law. Pittsburgh, Pennsylvania Trade Secret and DTSALaw® | Lawyers | The Protecting American Intellectual Property Act | 2022 | S. 1294

[1] Congress.gov, S.1294 – Protecting American Intellectual Property Act of 2022, https://www.congress.gov/bill/117th-congress/senate-bill/1294?q=%7B%22search%22%3A%5B%22S+1294%22%2C%22S%22%2C%221294%22%5D%7D&s=1&r=2