Bill Would Allow Civil Suits against Foreign Entities for Trade Secret Theft

Senator Jeff Flake (R-Ariz.) has sponsored a bill which would allow civil suits against any foreign person who “misappropriates, threatens to misappropriate, or conspires to misappropriate” a US trade secret.

Senate Bill 1770 is entitled the “Future of American Innovation and Research Act of 2013.”

The bill would extend the jurisdiction of US District Courts to entities “located outside the territorial jurisdiction of the United States” or acting “on behalf of, or for the benefit of” an entity located outside the United States.

The bill defines trade secrets to mean:

any information, including a formula, pattern, compilation, program, device, method, technique, or process, that—

(A) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, the public or other persons who can obtain economic value from the disclosure or use of the information; and

(B) is the subject of efforts that are reasonable under the circumstances to maintain the secrecy of the information.

The bill deals with trade secrets discovered by “improper means,” defined to include “theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, and espionage through electronic or other means.”

“Improper means” do not include reverse engineering or independent derivation alone.

Remedies for violations of the Act would include injunctions, reasonable royalties, and damages.

Trade secret owners can already bring complaints before the International Trade Commission (ITC) concerning misappropriation of trade secrets by foreign entities.  A 2011 case, TianRui Group Co. Ltd. v. U.S. Int’l Trade Comm’n, held that Section 337 of the Tariff Act of 1930 applied to trade secret misappropriation even where the act occurred outside the US.

 

Stay up-to-date on the latest Intellectual Property Law news from Sheldon Mak & Anderson.

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