House clears trade secrets bill for Obama's signature

The House on Wednesday easily passed a measure that would provide a federal remedy for U.S. companies seeking relief from the theft of trade secrets. 

The vote of 410-2 clears the measure for President Obama’s signature, wrapping up about two years of work to craft the measure aimed at harmonizing federal law and giving businesses more consistent legal protections when their trade secrets are stolen.


The Senate passed the measure on an 87-0 vote on April 4. 

House Judiciary Committee Chairman Bob GoodlatteRobert (Bob) William GoodlatteThe Hill's Morning Report — Sponsored by United Against Nuclear Iran — Kavanaugh, accuser say they’re prepared to testify Goodlatte: Administration undercut law, Congress by setting refugee cap Virginia reps urge Trump to declare federal emergency ahead of Hurricane Florence MORE (R-Va.), whose committee approved the measure by voice voice last week, said that trade secrets include everything from Kentucky Fried Chicken’s secret spices to Coca-Cola's soda formula and algorithms for search engines like Google.

The measure would “build on efforts over the past two years and take a significant and positive step toward improving our nation’s trade secret laws and continuing to build on our important work in this area of intellectual property,” Goodlatte said on the House floor.

Goodlatte and one of the bill’s authors, Rep. Jerrold Nadler (D-N.Y.), expressed concern that technology has made it even easier for thieves to steal intellectual property, driving up theft to an all-time high

Nadler called the bill a long-overdue remedy to protect businesses across the country from “the growing threat of trade secret theft by creating a uniform federal civil cause of action for theft of trade secrets."

The value of U.S. trade secrets amounts to around $5 trillion, and about $300 billion is stolen every year, Nadler said.

The lawmakers said that state laws have proven inadequate to protect victims of trade secret theft mostly because there are different approaches that make it expensive and complicated for U.S. companies to recoup their losses.

Rep. John Conyers (D-Mich.), the ranking member on the House Judiciary Committee, said that the measure reflects the input of constructive feedback from a broad spectrum of stakeholders "and is an excellent example of what can be achieved when there is bipartisan collaboration."

In the Senate, Sens. Orrin HatchOrrin Grant HatchJudiciary Dems say GOP treating Kavanaugh accuser worse than Anita Hill Dem vows to probe 'why the FBI stood down' on Kavanaugh Senate Democrats increase pressure for FBI investigation of Kavanaugh MORE (R-Utah) and Chris CoonsChristopher (Chris) Andrew CoonsJudiciary Democrat calls for additional witnesses to testify on Kavanaugh Kavanaugh allegations could be monster storm brewing for midterm elections      Sunday shows preview: White House officials on offensive in wake of anonymous NY Times op-ed MORE (D-Del.) worked together on the measure for the past two years.

“Enacting this bill into law will help address the critical problem of trade secret theft, which stifles innovation and costs American companies billions of dollars annually,” Hatch said.

“I hope our success in acting to protect trade secrets will serve as a spring board for additional congressional action to safeguard other forms of intellectual property," he said.

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

Business groups have said that the theft of trade secrets is a critical issue that must be solved. 

“Creativity and innovation are the heart and soul of the products made in this country, and when competitors steal that knowledge, it undercuts our ability to succeed in the global economy,” said Jay Timmons, president and CEO of the National Association of Manufacturers.

The U.S. Chamber of Commerce’s Global Intellectual Property Center (GIPC) worked with more than 40 associations and companies to push through the measure.

“American innovators have changed the world by introducing thousands of cutting edge products and technologies into the marketplace,” said David Hirschmann, president and CEO of the GIPC.

“The trade secrets, unique formulas and know-how that set these companies apart are constantly under attack from other countries and those wishing to steal their success," Hirschmann said.

“We urge President Obama to sign this legislation into law as soon as possible."