House Judiciary Committee Unanimously Reports Defend Trade Secrets Act of 2016

McDonnell Boehnen Hulbert & Berghoff LLP

After a brief markup session in which no amendments to the bill were proposed, the House Judiciary Committee reported the Defend Trade Secrets Act of 2016 to the House floor by unanimous voice vote today.  The bill passed the Senate earlier this month by a vote of 87-0 and should receive quick approval by the full House.  President Obama has voiced support for the measure and should sign the bill into law in short order.  The bill is remarkable not only for its bipartisan support, but also because it would create a new Federal cause of action for intellectual property owners.

During the markup session, seven representatives spoke in favor of the bill including the Chairman (Rep. Goodlatte of Virginia), the ranking minority member (Rep. Conyers of Michigan), sponsors of the House's original version of the Defend Trade Secrets Act (Rep. Collins of Georgia and Reps. Nadler and Jeffries of New York), Rep. Lofgren of California, and Rep. Johnson of Georgia.  Other than Rep. Lofgren, all spoke only of the importance of the bill to American business and their appreciation for the efforts of all who helped draft and promote the bill.  Rep. Lofgren, whose district covers much of San Jose and Santa Clara, expressed concern over the venue for hearings after ex parte seizures.  Specifically, she was troubled that a start-up or small business might be forced to try to find counsel and prepare for a hearing across the country within a week of having had a seizure executed against it.  But, remarkably, rather than proposing an amendment to address the issue, Rep. Lofgren recognized that the bill is on a fast track to the President's desk and only expressed the hope that the concern could be dealt with later (either through a later law or some other mechanism).  Thus, no amendments were proposed and the bill was reported in the same form in which it passed the Senate.

The bill now goes to the House floor for debate.  Since it had over 150 cosponsors in its original House form and support from the White House, however, it is unlikely that there will be much dissent or controversy.  Indeed, the House Judiciary Committee took only one week to report the bill after it was passed by the Senate.  Thus, it is likely we will see the President signing the Defend Trade Secrets Act of 2016 into law this spring, creating a new Federal civil cause of action for trade secret misappropriation.

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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