Judiciary Committee Approves Bill to Protect American Businesses’ Trade Secrets

Washington, DC – The Senate Judiciary Committee approved the bipartisan Defend Trade Secrets Act (DTSA), sponsored by Sens. Orrin Hatch (R-UT) and Chris Coons (D-DE), to create a new federal right of action for trade secret theft. The measure would also empower litigants to seek civil seizure of stolen trade secrets and other property in exceptional cases. The version adopted by the Committee reflects a number of changes made by the bill’s authors at the request of Sen. Sheldon Whitehouse (D-RI) and other Judiciary Committee members at a December 2015 hearing on the legislation. Whitehouse cosponsored and voted in favor of the amended measure.

“Trade-secret theft and economic espionage threaten American companies and our nation’s economic competitiveness. This bipartisan measure will protect the fruits of American invention and innovation,” said Whitehouse. “I’m grateful to Senators Hatch and Coons for giving a fair and reasonable hearing to my input on their proposal. They listened carefully to me and our colleagues and made meaningful adjustments that have resulted in strong protections for intellectual property rights.”

Senator Whitehouse offered a series of changes to the Defend Trade Secrets Act designed to protect property and privacy rights, ensure due process, and to provide better guidance to law enforcement officials charged with executing DTSA seizures. Senator Whitehouse’s language narrows the scope of property subject to seizure under the DTSA to property in the actual possession of the defendant. His changes also enhance the privacy protections in the DTSA and ensure that litigants are afforded due process by:

prohibiting civil seizure applicants from participating in the execution of civil seizures;
giving both the applicant and the defendant the opportunity to present their arguments to a judge before access to any seized materials is granted;
authorizing courts to appoint a special master to review seized property and to locate any misappropriated trade secret information; and
requiring courts to take appropriate measures to protect the confidentiality of seized material that does not constitute misappropriated trade secret information.
Senator Whitehouse also authored a provision that requires courts to provide law enforcement officials with direction as to how and when DTSA seizures may be executed in order to ensure that law enforcement officials have clear guidance as to the scope of their authority.