[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5233 Introduced in House (IH)]
113th CONGRESS
2d Session
H. R. 5233
To amend chapter 90 of title 18, United States Code, to provide Federal
jurisdiction for the theft of trade secrets, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 29, 2014
Mr. Holding (for himself, Mr. Nadler, Mr. Coble, Mr. Conyers, Mr.
Chabot, Mr. Jeffries, Mr. Richmond, and Ms. DelBene) introduced the
following bill; which was referred to the Committee on the Judiciary
_______________________________________________________________________
A BILL
To amend chapter 90 of title 18, United States Code, to provide Federal
jurisdiction for the theft of trade secrets, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Trade Secrets Protection Act of
2014''.
SEC. 2. FEDERAL JURISDICTION FOR THEFT OF TRADE SECRETS.
(a) In General.--Section 1836 of title 18, United States Code, is
amended by striking subsection (b) and inserting the following:
``(b) Private Civil Actions.--
``(1) In general.--An owner of a trade secret may bring a
civil action under this subsection if the person is aggrieved
by a misappropriation of a trade secret that is related to a
product or service used in, or intended for use in, interstate
or foreign commerce.
``(2) Civil seizure.--
``(A) In general.--
``(i) Application.--Based on an affidavit
or verified complaint satisfying the
requirements of this paragraph, the court may,
upon ex parte application, issue an order
providing for the seizure of property necessary
to preserve evidence in a civil action brought
under paragraph (1) or to prevent the
propagation or dissemination of the trade
secret that is the subject of the action.
``(ii) Requirements for issuing order.--The
court may not grant an application under clause
(i) unless the court finds that it clearly
appears from specific facts that--
``(I) an order issued pursuant to
Rule 65(b) of the Federal Rules of
Civil Procedure would be inadequate to
achieve the purpose of this paragraph
because the party to which the order
would be issued would evade, avoid, or
otherwise not comply with such an
order;
``(II) an immediate and irreparable
injury will occur if such seizure is
not ordered;
``(III) the harm to the applicant
of denying the application outweighs
the harm to the legitimate interests of
the person against whom seizure would
be ordered of granting the application
and substantially outweighs the harm to
any third parties who may be harmed by
such seizure;
``(IV) the applicant is likely to
succeed in showing that the person
against whom seizure would be ordered
misappropriated the trade secret and is
in possession of the trade secret;
``(V) the application describes
with reasonable particularity the
matter to be seized and, to the extent
reasonable under the circumstances,
identifies the location where the
matter is to be seized;
``(VI) the person against whom
seizure would be ordered, or persons
acting in concert with such person,
would destroy, move, hide, or otherwise
make such matter inaccessible to the
court, if the applicant were to proceed
on notice to such person; and
``(VII) the applicant has not
publicized the requested seizure.
``(B) Elements of order.--If an order is issued
under subparagraph (A), it shall--
``(i) set forth findings of fact and
conclusions of law required for the order;
``(ii) provide for the seizure of any
property in a manner that minimizes any
interruption of the business operations of
third parties and, to the extent possible, does
not interrupt those legitimate business
operations of the person accused of
misappropriating the trade secret that are
unrelated to the trade secret that has
allegedly been misappropriated;
``(iii) be accompanied by an order
protecting the property from disclosure by
restricting the access of the applicant,
including during the seizure, and prohibiting
any copies, in whole or in part, of the seized
property, to prevent undue damage to the party
against whom the order has issued or others,
until such parties have an opportunity to be
heard in court;
``(iv) set a date for a hearing at the
earliest possible time, and not later than 7
days after the order has issued, unless the
party against whom the order is directed and
others harmed by the order consent to another
date for such hearing, except that a party
against whom the order has issued or any person
harmed by the order may move the court at any
time to dissolve or modify the order after
giving notice to the applicant who obtained the
order; and
``(v) require the person obtaining the
order to provide the security determined
adequate by the court for the payment of such
damages as any person may be entitled to
recover as a result of a wrongful or excessive
seizure or wrongful or excessive attempted
seizure under this paragraph.
``(C) Protection from publicity.--The court shall
take appropriate action to protect the person against
whom an order under this paragraph is directed from
publicity, by or at the behest of the person obtaining
the order, about such order and any seizure under such
order.
``(D) Materials in custody of court.--Any materials
seized under this paragraph shall be taken into the
custody of the court. The court shall secure the seized
material from physical and electronic access during the
seizure and while in the custody of the court.
``(E) Service of order.--The court shall order that
service of a copy of the order under this paragraph
shall be made by a Federal law enforcement officer, or
may be made by a State or local law enforcement
officer, who, upon making service, shall carry out the
seizure under the order.
``(F) Action for damage caused by wrongful
seizure.--A person who suffers damage by reason of a
wrongful or excessive seizure under this paragraph has
a cause of action against the applicant for the order
under which such seizure was made, and shall be
entitled to the same relief as is provided under
section 34(d)(11) of the Trademark Act of 1946 (15
U.S.C. 1116(d)(11)). The security posted with the court
under subparagraph (B)(v) shall not limit the recovery
of third parties for damages.
``(3) Remedies.--In a civil action brought under this
subsection with respect to the misappropriation of a trade
secret, a court may--
``(A) grant an injunction--
``(i) to prevent any actual or threatened
misappropriation described in paragraph (1) on
such terms as the court deems reasonable;
``(ii) if determined appropriate by the
court, requiring affirmative actions to be
taken to protect the trade secret; and
``(iii) in exceptional circumstances that
render an injunction inequitable, that
conditions future use of the trade secret upon
payment of a reasonable royalty for no longer
than the period of time for which such use
could have been prohibited;
``(B) award--
``(i)(I) damages for actual loss caused by
the misappropriation of the trade secret; and
``(II) damages for any unjust enrichment
caused by the misappropriation of the trade
secret that is not addressed in computing
damages for actual loss; or
``(ii) in lieu of damages measured by any
other methods, the damages caused by the
misappropriation measured by imposition of
liability for a reasonable royalty for the
misappropriator's unauthorized disclosure or
use of the trade secret;
``(C) if the trade secret is willfully and
maliciously misappropriated, award exemplary damages in
an amount not more than 3 times the amount of the
damages awarded under subparagraph (B); and
``(D) if a claim of the misappropriation is made in
bad faith, a motion to terminate an injunction is made
or opposed in bad faith, or the trade secret was
willfully and maliciously misappropriated, award
reasonable attorney's fees to the prevailing party.
``(c) Jurisdiction.--The district courts of the United States shall
have original jurisdiction of civil actions brought under this section.
``(d) Period of Limitations.--A civil action under subsection (b)
may not be commenced later than 5 years after the date on which the
misappropriation with respect to which the action would relate is
discovered or by the exercise of reasonable diligence should have been
discovered. For purposes of this subsection, a continuing
misappropriation constitutes a single claim of misappropriation.''.
(b) Definitions.--Section 1839 of title 18, United States Code, is
amended--
(1) in paragraph (3), by striking ``and'' at the end;
(2) in paragraph (4), by striking the period at the end and
inserting a semicolon; and
(3) by adding at the end the following:
``(5) the term `misappropriation' means--
``(A) acquisition of a trade secret of another by a
person who knows or has reason to know that the trade
secret was acquired by improper means; or
``(B) disclosure or use of a trade secret of
another without express or implied consent by a person
who--
``(i) used improper means to acquire
knowledge of the trade secret;
``(ii) at the time of disclosure or use,
knew or had reason to know that the knowledge
of the trade secret was--
``(I) derived from or through a
person who had used improper means to
acquire the trade secret;
``(II) acquired under circumstances
giving rise to a duty to maintain the
secrecy of the trade secret or limit
the use of the trade secret; or
``(III) derived from or through a
person who owed a duty to the person
seeking relief to maintain the secrecy
of the trade secret or limit the use of
the trade secret; or
``(iii) before a material change of the
position of the person, knew or had reason to
know that--
``(I) the trade secret was a trade
secret; and
``(II) knowledge of the trade
secret had been acquired by accident or
mistake;
``(6) the term `improper means'--
``(A) includes theft, bribery, misrepresentation,
breach or inducement of a breach of a duty to maintain
secrecy, or espionage through electronic or other
means; and
``(B) does not include reverse engineering or
independent derivation; and
``(7) the term `Trademark Act of 1946' means the Act
entitled `An Act to provide for the registration and protection
of trademarks used in commerce, to carry out the provisions of
certain international conventions, and for other purposes,
approved July 5, 1946 (15 U.S.C. 1051 et seq.) (commonly
referred to as the ``Trademark Act of 1946'' or the ``Lanham
Act'')'.''.
(c) Exceptions to Prohibition.--Section 1833 of title 18, United
States Code, is amended, in the matter preceding paragraph (1), by
inserting ``or create a private right of action for'' after
``prohibit''.
(d) Conforming Amendments.--
(1) The section heading for section 1836 of title 18,
United States Code, is amended to read as follows:
``Sec. 1836. Civil proceedings''.
(2) The table of sections for chapter 90 of title 18,
United States Code, is amended by striking the item relating to
section 1836 and inserting the following:
``1836. Civil proceedings.''.
(e) Effective Date.--The amendments made by this section shall
apply with respect to any misappropriation of a trade secret (as
defined in section 1839 of title 18, United States Code, as amended by
this section) for which any act occurs on or after the date of the
enactment of this Act.
(f) Rule of Construction.--Nothing in the amendments made by this
section shall be construed to modify the rule of construction under
section 1838 of title 18, United States Code, or to preempt any other
provision of law.
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