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Policy

Senate Panel Approves Trade Secrets Bill

Intellectual Property: Measure would authorize U.S. companies to pursue alleged thieves in federal court

by Glenn Hess, special to C&EN
February 1, 2016

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Credit: Shutterstock
DuPont sued after trade secrets for its Kevlar fibers, used in bulletproof vests, were stolen.
Photograph of a Kevlar vest.
Credit: Shutterstock
DuPont sued after trade secrets for its Kevlar fibers, used in bulletproof vests, were stolen.

Bipartisan legislation recently approved by the Senate Judiciary Committee would provide new recourse for U.S. companies victimized by theft of their corporate trade secrets.

The measure is backed by a broad industry coalition that includes DuPont, Boston Scientific, Eli Lilly & Co., Pfizer, and the Biotechnology Innovation Organization, a biotech industry trade group.

Sen. Orrin Hatch (R-Utah), coauthor of the proposed Defend Trade Secrets Act (S. 1890), says the bill would give businesses more consistent legal protections when their trade secrets are stolen.

“Trade secrets are the only form of intellectual property that lack protection under federal civil law,” Hatch points out.

The legislation would allow companies to file civil complaints in federal court alleging trade-secret misappropriation. Currently, companies have to rely on state courts or federal prosecutors to bring legal action. Plus, the U.S. Department of Justice lacks the resources to prosecute all trade-secret theft cases.

Federal courts are better equipped to address the interstate and international nature of trade-secret theft than are state courts, the bill’s supporters argue.

State laws also vary. “In many cases, the existing patchwork of state laws governing trade-secret theft presents difficult procedural hurdles for victims,” says Sen. Charles Grassley (R-Iowa), chairman of the Judiciary Committee.

At a hearing on the bill in December 2015, DuPont’s Chief IP Counsel Karen Cochran described to lawmakers DuPont’s defense of trade secrets for its proprietary Kevlar fiber technology. That case took six years to resolve.

“This experience brought about our realization of the importance of S. 1890 and updating trade-secret protection and remedies,” Cochran said. A federal civil remedy, she testified, “would eliminate jurisdictional complications and provide the full spectrum of legal options available to owners of other forms of intellectual property.”

A similar bill (H.R. 3326) sponsored by Rep. Doug Collins (R-Ga.) has been introduced in the House of Representatives and has 107 cosponsors.

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