Federalizing state trade secret law

From a post by Jessica Mendelson and Robert Milligan on the "Trading Secrets" blawg, I learned about proposed legislation in the US Senate that seeks to, in the words of the writers, "allow American companies dealing with economic espionage and trade secret theft to seek redress in federal courts, rather than having to file suit in individual state courts."

Alfred_hitchcock_secret_agent_argentine_movie_poster_2aMendelson and Milligan place their discussion of this bill in the context of a reminder that Congress is awash in concern about "foreign espionage," and that we don't yet know which of various alternative initiatives may take hold in federal law.

So no need to get worked up about this particular bill. Possibly.

Though I'd like to raise one hand and ask, is it really necessary to keep tacking to policy reforms that essentially privatize law enforcement? (This is something that the motion picture industry and the music industry keep pressing for; and they are succeeding, too, to the extent they strike private agreements with cable companies and other internet service providers to blacklist people they don't like, bypassing courts and due process altogether!)

There is already a federal trade secret statute on the books, a law that makes it a crime to steal trade secrets knowing that the theft will "benefit any foreign government, foreign instrumentality, or foreign agent." That's pretty heady stuff.

There's also a right of civil action in federal courts, today, for the Attorney General to obtain "appropriate injunctive relief."

This new Senate bill would expand the right of civil action in federal court, bestowing it also upon any person who is "aggrieved." Not only that, but - if I am reading the legislation correctly - it would give the private litigant more grounds for complaint than the Attorney General has, and it would allow persons to sue domestic defendants, too - products "produced for or placed in interstate or foreign commerce" would be entitled to protection.

In addition to the stuff the Attorney General can sue about, the Senate bill would grant an exclusively private right of action for "misappropriation." What's "misappropriation?" A lot of stuff that's not criminal, including use of a trade secret when you "had reason to know" that your knowledge of the trade secret was via a person who "owed a duty to the person seeking relief." Because the action is not limited to "foreign espionage," it may not be overly dramatic to wonder if this bill would essentially federalize trade secret law.

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