WASHINGTON — The Senate overwhelmingly approved Monday a bipartisan bill permitting private companies and individuals to sue in federal court when trade secrets are stolen – a right previously reserved Department of Justice. The bill passed 87-0.
The bill, sponsored by Sen. Orrin Hatch, R-Utah, had 64 cosponsors, including 36 Republicans and 27 Democrats. Several supporters had earlier reservations about the bill.
“I’m proud that many of the senators who raised concerns are now cosponsors,” said Sen. Christopher Coons, D-Del., who co-authored the bill.
Previously, civil law on trade secrets was mostly governed by individual states. The Senate bill allows that “an owner of a trade secret that is misappropriated may bring a civil action … if the trade secret is related to a product or service used in, or intended for use in, interstate or foreign commerce.”
The sponsors say the measure addresses the needs of an increasingly interconnected economy where state laws simply aren’t as effective.
“Under current law, companies have few legal options to recover their losses when trade secrets are stolen,” Hatch said in a news release.
“For example, if a disgruntled employee steals a Utah company’s confidential information and leaks it to a competitor in Colorado, attorneys must navigate a complex labyrinth of state laws just to bring suit. This cumbersome process can take weeks, which is an eternity in a trade secrets case.”
And state-to-state corporate espionage isn’t the only worry. Coons wrote in January that “trade secrets can be stolen with a few keystrokes, and increasingly, they are stolen at the direction of a foreign government or for the benefit of a foreign competitor.”
But opponents of the legislation say is unlikely to solve current problems and could invite new ones.
“It’s unlikely that the addition of a civil cause of action is going to meaningfully deter foreign hackers, who are already subject to criminal liability under the federal Computer Fraud and Abuse Act as well as the Economic Espionage Act,” said Christopher Seaman, an associate professor at Washington and Lee University School of Law. “Foreign-based hackers often take extensive efforts to conceal their identity, and even when they are identified, they are usually outside the reach of U.S. law.”
Seaman also signed a letter opposing a previous version of the bill along with 30 other law professors.
Photo at top: Sen. Orrin Hatch, R-Utah, was the primary sponsor of the bill, which passed 87-0. (Gage Skidmore/Creative Commons)