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Bipartisan Trade Secrets Bill Passes U.S. Senate

In a major win for the American innovative economy, the U.S. Senate on Monday unanimously passed S. 1890, the Defend Trade Secrets Act (DTSA), 87-0. The bill stands a good chance of getting enacted into law, which would be a significant milestone for intellectual property protection particularly in this election year.

Trade secrets are increasingly valuable to companies in all industry sectors and all sizes. From product designs to computer algorithms, trade secrets are an essential form of intellectual property. Often developed at great cost, they can give companies a competitive edge in today’s challenging global markets and drive key segments of the U.S. economy. But trade secret federal legal protections are inadequate and trade secret theft is estimated to cost the U.S. economy $300 billion annually.

Currently, while owners of patents, copyrights, and trademarks can enforce their rights under federal law, a victim of trade secret theft must rely on an array of state laws to protect their rights when their know-how is stolen.  The DTSA would amend the Economic Espionage Act of 1996 (“EEA”) to create a federal civil claim and remedy for trade secret misappropriation.  This critical update will modernize trade secret protection by creating a unified, consistent body of law nationwide, without preempting existing state laws.

In addition to providing federal court jurisdiction and streamlining the discovery and subpoena process in multi-jurisdictional cases, DTSA provides expedited relief on an ex parte basis in “extraordinary” circumstances when time is of the essence and the thief would not obey an injunction. By allowing a limited seizure of the allegedly stolen trade secret from a party accused of misappropriation, DTSA facilitates the immediate, cross-jurisdictional action often necessary to prevent destruction or dissemination of stolen trade secrets. The bill includes appropriate safeguards to ensure this relief is not abused.

The bipartisan Senate bill, introduced by Senators Orrin Hatch (R-UT) and Christopher Coons (D-DE), is overwhelmingly supported by U.S. businesses.  Covington represents the Protect Trade Secrets Coalition, a cross-industry group of leading American companies working in support of a federal civil remedy for trade secret theft.  The coalition includes innovative businesses in a wide range of industries, including biotech, software, semiconductors, consumer goods, medical devices, automobiles, aerospace, and agriculture.  The legislation is supported by a large number of corporations, trade associations and industry groups, including the U.S. Chamber of Commerce; the National Association of Manufacturers; BSA The Software Alliance; the Information Technology Industry Council; the Alliance of Automobile Manufacturers; the Association of Global Automakers; the Internet Commerce Coalition; the New England Council; the Semiconductor Industry Association; the Software and Information Industry Association; and the Telecommunications Industry Association.  Importantly, the White House has also voiced strong support for the DTSA.

Supporters of S. 1890 now turn to the U.S. House of Representatives, where companion legislation (H.R. 3326) has been introduced by Representatives Doug Collins (R-GA) and Jerrold Nadler (D-NY), and already has the support 128 bipartisan cosponsors. Monday’s overwhelming Senate vote of support hopefully will provide momentum for quick approval in the House, so this important bill can be sent to the President’s desk.

© 2022 Covington & Burling LLPNational Law Review, Volume VI, Number 97
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About this Author

Richard Hertling, Covington, public policy lawyer
Of Counsel

Richard Hertling provides regulatory and legislative advice and guidance and lobbying to a diverse set of clients in a range of industries. He joined the firm after more than 27 years of federal government service that included senior positions in both Houses of Congress and the Justice Department, during which he was respected for developing strategic and tactical approaches to advance legislation. He brings those same skills to bear for clients with complex policy challenges.

While holding senior positions on Capitol Hill and at the Department of Justice, Mr....

202-662-5669
Layth Elhassani, Covington Burling, Regulatory Landscape Attorney, National Security Lawyer
Of Counsel

With significant experience in the U.S. Congress and White House, Layth Elhassani helps clients around the world navigate the U.S. political and regulatory landscape so they can achieve key business goals.

Mr. Elhassani most recently served as Special Assistant to President Obama in the White House Office of Legislative Affairs from 2012 to 2015. In his role as a White House liaison, he maintained relationships with roughly 20 Democratic and Republican Senate offices and attended weekly Senate Democratic Chiefs of Staff strategy meetings. He also played a critical role in advocating...

202 662 5063
Kaitlyn McClure, Public policy lawyer, Covington
Policy Advisor

Kaitlyn McClure is a policy advisor in Covington’s Public Policy Practice, leveraging her experience in government and politics to provide strategic advisory services and support to clients with legislative matters before government agencies and Congress.

Before joining the firm, Ms. McClure was the Associate Vice President of Client Relations at DDC Advocacy. Prior to working for DDC, Ms. McClure served as the strategy assistant for former presidential candidate Governor Mitt Romney. Her experience also includes working in the U.S. Senate as a legislative...

202 662 6627
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