Goodlatte Floor Statement on Trade Secrets Legislation

Chairman Goodlatte: Today we are here to consider S.1890, the “Defend Trade Secrets Act of 2016.” This bill puts forward enhancements to our federal trade secrets law, creating a federal civil remedy for trade secret misappropriation that will help American innovators protect their intellectual property from criminal theft by foreign agents and those engaging in economic espionage. This bill will help U.S. competiveness, job creation, and our nation’s future economic security. Our intellectual property laws cover everything from patents, copyrights and trademarks, and include trade secrets. But what are trade secrets? Trade secret law is used to protect some of the most iconic inventions in America. For example, a trade secret can include recipes like Colonel Sanders’ secret recipe of 11 herbs and spices, and the 125-year old formula for Coca Cola, housed in a vault at the World of Coca-Cola in Atlanta, Georgia. However, trade secrets are not simply isolated to the realm of food and beverages. They can include confidential formulas, like the formula for WD-40, manufacturing techniques, customer lists, and algorithms, like Google’s search engine. Trade secrets occupy a unique place in the IP portfolios of our most innovative companies. But because they are unregistered and not formally reviewed like patents, there are no limitations on discovering a trade secret by fair, lawful methods, such as reverse engineering or independent development.  In innovative industries, that is simply the free market at work. Though trade secrets are not formally reviewed, they are protected from “misappropriation,” which includes obtaining the trade secret through improper or unlawful means. “Misappropriation” can take many forms, whether it is an employee selling blueprints to a competitor or a foreign agent hacking into a server. In addition, one could argue that even a foreign government’s policies to require forced technology transfer is a form of “misappropriation.” Though most states base their trade secret laws on the Uniform Trade Secrets Act, the federal government protects trade secrets through the Economic Espionage Act(“EEA”). In the 112th Congress, the Judiciary Committee helped enact two pieces of legislation to improve the protection of trade secrets. And in the 113th Congress we introduced and passed out of Committee the first version of this trade secrets bill unanimously. Today we build on our efforts over these past two years, and are taking a significant and positive step toward improving our nation’s trade secrets laws and continuing to build on our important work in this area of intellectual property. I urge all of my colleagues to support this bill. ###