In today’s partisan political climate, it’s rare to see an issue that unites members of both parties. But trade-secrets theft has become such a significant threat to our economy that there is now a bipartisan effort to pass federal trade-secret legislation.
Last week, Congressmen Hakeem Jeffries (D-NY), Howard Coble (R-NC), John Conyers Jr. (D-MI), Steve Chabot (R-OH), Jerrold Nadler (D-NY), and George Holding (R-NC), all members of the House Judiciary Committee, published an article explaining why they introduced the “Trade Secrets Protection Act of 2014.”
The Congressmen’s article does a great job detailing the threat that companies face.
They start off with a sobering statistic: “The devastating reality is that theft of trade secrets costs the American economy billions of dollars per year.” They cite to a 2013 study by the Executive Office of the President that found that “the pace of economic espionage and trade secret theft against U.S. corporations is accelerating.” That study gave examples of large-scale trade-secret theft, including stolen trade secrets from Dupont and Goldman Sachs valued at $400 million and $500 million, respectively.
They close by making the point that the current scheme, under which each state has its own trade-secret-misappropriation laws, is inadequate to confront the threat:
The current patchwork is simply not enough to combat organized trade secret theft. All other forms of intellectual property – patents, copyrights, and trademarks – are afforded a civil cause of action in federal law. It is time we confer trade secrets with a similar level of protection to substantially mitigate the billions of dollars lost annually through theft of our intellectual property.
Hopefully, either this or the similar Defend Trade Secrets Act (discussed here and here) will pass. But regardless, companies must be proactive about protecting their trade secrets. State and federal laws creating causes of action for trade-secret theft are great, but litigation is never ideal. You should consult with an attorney with expertise in this area to make sure you are taking all reasonable steps to protect your proprietary information. Doing so will help you avoid the need for expensive and time-consuming litigation.