Senate easily passes trade secrets bill

The Senate on Monday easily passed on an 87-0 vote a long-awaited measure that would strengthen federal law and provide damages for U.S. companies affected by the theft of corporate intellectual property.

Sens. Orrin HatchOrrin Grant HatchTrump awards Medal of Freedom to racing industry icon Roger Penske Trump holds more Medal of Freedom ceremonies than predecessors but awards fewer medals Trump to award Medal of Freedom to former Attorney General Edwin Meese MORE (R-Utah) and Chris CoonsChristopher (Chris) Andrew CoonsCentrist Democrats seize on state election wins to rail against Warren's agenda Bill Gates visits Capitol to discuss climate change with new Senate caucus The Memo: ISIS leader's death is no game-changer for Trump MORE (D-Del.), who have worked together on the measure for the past two years, said their bill would harmonize federal law and give businesses more consistent legal protections when their trade secrets are stolen and they are facing billions in losses. 


Coons said that trade secrets, a critical form of intellectual property and the "lifeblood" of many companies, "has somehow slipped through the cracks of federal protection."

"This bill is a commonsense solution to a very serious problem," he said.

Trade secrets include everything from customer lists, formulas, software codes, unique designs, industrial techniques and manufacturing processes. 

"The bill would establish a federal civil private cause of action for trade secret theft that would provide businesses with a more uniform, reliable, and predictable way to protect their valuable trade secrets anywhere in the country," the Office of Management and Budget said in a statement in support. 

Hatch said that state laws have proven inadequate to protect victims of trade secret theft mostly because differing laws have made it expensive and complicated for U.S. companies to recoup their losses.

“This mixed bag of differing legal regimes forces victims of trade secret theft to wade through a quagmire of procedural hurdles in order to recover their losses,” Hatch said. 

Hatch said that since most businesses operate in more than one state, "having a uniform set of standards that defines legal protections for trade secrets is crucial."

The lawmakers argued that technology has made it even easier for thieves to steal intellectual property, driving up theft to an all-time high.

“American companies spend billions every year in research and development and in the creation of products we use every day," said Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellGOP senators balk at lengthy impeachment trial Graham: Senate trial 'must expose the whistleblower' Graham says Schiff should be a witness in Trump impeachment trial MORE (R-Ky.) on the Senate floor. 

"But some thieves would rather not go through the trouble of developing products themselves, they’d rather just steal the fruits of others’ creativity and innovation instead," McConnell said.

"That’s more than just wrong — it puts American jobs and the American economy at risk."

Trade secrets are worth $5 trillion to the U.S. economy and losses can cost between $160 billion and $480 billion a year, the senators said.

"Senator Hatch and I saw a problem, found a coalition that wanted to fix it," Coons said. "We came together to find a solution."

The bill has 65 co-sponsors in the Senate and an identical measure in the House, sponsored by Reps. Doug Collins (R-Ga.) and Jerrold Nadler (D-N.Y.) has 128, according to Coons. 

Coons called on the House to pass the legislation as quickly as possible. The House returns next week from spring recess.

Last year, the Justice Department brought only 15 criminal cases for trade secret theft, the lawmakers said.

Until this bill, the only federal vehicle for trade secret protection is the 1996 Economic Espionage Act, which makes trade secret theft by foreign nationals a criminal offense.

Ahead of the vote, Senate Minority Leader Harry ReidHarry Mason ReidThe Memo: Democrats confront prospect of long primary Bottom Line Lobbying world MORE (D-Nev.) chastised McConnell for applauding Senate Judiciary Committee Chairman Chuck GrassleyCharles (Chuck) Ernest GrassleySpeaker Pelosi, it's time to throw American innovators a lifeline Barr: Inspector general's report on alleged FISA abuses 'imminent' Pelosi aide hopeful White House will support drug-pricing bill despite criticism MORE’s efforts to move the trade secrets bill along with several other measures this year amid the prickly Supreme Court nominee fight.

Reid said the panel doesn’t deserve a pat on the back for a popular bipartisan measure while President Obama’s Supreme Court nominee languishes in the Senate. 

"This would have passed unanimous consent,” Reid said Monday on the Senate floor. “Everybody knows that. We don't need to take up time of the Senate on a bill that would pass just like that. We're doing that because it focuses less attention on the inadequacy of the Judiciary Committee," Reid said.

Jay Timmons, president and CEO of the National Association of Manufacturers, said the theft of trade secrets is a critical issue facing manufacturers and “one that will define competition and success in the 21st century."

"That’s why we need all the tools possible to protect the superior knowledge and products that set our industry apart," he said.

Timmons said that intellectual property can comprise up to 80 percent of the value of a company’s knowledge portfolio.

"Manufacturers need a strong, unified federal policy that will enforce strict laws to protect what many businesses consider their most valued corporate assets."