Opening Statement

Statement of the Honorable John Conyers, Jr.
Markup of H.R. 5233, the “Trade Secrets Protection Act of 2014"
Before the Committee on the Judiciary

Wednesday, September 10, 2014, at 10:00 a.m.
2141 Rayburn House Office Building

     H.R. 5233, the "Trade Secrets Protection Act of 2014," which amends the Economic Espionage Act of 1996 to create a federal civil cause of action for trade secret misappropriation.  I am an original cosponsor of this bipartisan legislation for several reasons.

     To begin with, this legislation will enhance the protection of trade secrets, which is integral to the success of any business.  Trade secrets are also very valuable.  As of 2009, the value of trade secrets owned by U.S. companies was estimated to be about $5 trillion.

     Unfortunately, it is becoming more difficult for U.S. companies to protect trade secrets.  The loss of intellectual property as a result of cyber espionage of trade secrets costs these businesses between $200 billion and $300 billion, annually.

     Thieves take advantage of ever evolving, innovative technologies to access sensitive trade secret information and to distribute it immediately.  In the last Congress, two laws were enacted to increase trade secrets protection.  More needs to be done.

     The Theft of Trade Secrets Clarification Act of 2012 closed a gap in the Economic Espionage Act that had allowed the theft of trade secret source code.  And, the Foreign and Economic Espionage Penalty Enhancement Act of 2012 increased criminal penalties for economic espionage as well as directed the Sentencing Commission to consider adjusting offense levels for trade secret crimes.

     Nevertheless, technological advancements continue to facilitate theft of trade secrets to cross state borders instantaneously, despite these legislative enhancements.  While federal law protects other forms of intellectual property by providing access to federal courts for aggrieved parties to seek redress, there is no federal civil cause of action for enforcement of trade secrets protection.

     H.R. 5233 addresses this need by establishing a federal cause of action for trade secret owners to obtain injunctive and monetary relief.  This gives U.S. companies a powerful new tool to protect their intellectual property and help them compete on a global stage.

     Another reason why I support this bill is that it is carefully rafted to protect innocent third parties from overly broad or excessive use of seizure orders.  As discussed at an Intellectual Property Subcommittee hearing on trade secrets held earlier this year, concerns were expressed about the potential of seizure remedy legislation that inappropriately could be used against entities that are not culpable.

     In response to that concern, H.R. 5233 requires a court – before it may issue a seizure order – to find that seven conditions have been met.  These include considering the potential harm to any thidrd parties who may be harmed by the seizure, and requiring the application for a seizure order to describe with reasonable particularity the matter to be seized and its location.

     The legislation also provides for a cause of action for anyone who suffers damage because of a wrongful or excessive seizure.  The specific conditions will protect the innocent third parties who have to respond to a seizure order.

     Finally, I support this bill because it reflects constructive feedback from various stakeholders, including suggestions from the witnesses who testified at the subcommittee hearing I referenced earlier.

     This legislation is an excellent example of what can be achieved when there is bipartisan collaboration.  In fact, the bill will be fukrther perfected if the anticipated amendment by the author of this measure is adopted.

     I urge my colleagues to support this legislation.