On Tuesday, the House of Representatives by a vote of 388-4 overwhelmingly approved a one-page bill that broadens the scope of what constitutes an employer’s trade secret under the Economic Espionage Act (EEA). Introduced by Sen. Patrick Leahy (I-VT), the Theft of Trade Secrets Clarification Act of 2012 (S. 3642) amends the EEA by clarifying that a trade secret includes information related to “a product or service used in or intended for use in” interstate or foreign commerce.
The impetus for this legislation was a 2011 decision issued by the U.S. Court of Appeals for the Second Circuit holding that the EEA applies to a company’s trade secrets that are part of a product intended to be placed in interstate commerce only. In that case, United States v. Aleynikov, (pdf) a software programmer had copied internal proprietary company source code from his office in New York to a server in Germany, downloaded the code to his home computer in New Jersey, and subsequently taken the information with him to use at his new job in Illinois. The Second Circuit determined that this theft did not meet the EEA’s requirement that the secret be “produced for” or “placed in” interstate commerce – even though the stolen source code was eventually used in interstate commerce – because the company from which it was stolen created it for internal use only.
In a press release, Leahy said that the bill:
corrects the court’s narrow reading to ensure that our federal criminal laws adequately address the theft of trade secrets related to a product or service used in interstate commerce. It is a straightforward fix, but an important one, as we work to ensure that American companies can protect the products they work so hard to develop, so they may continue to grow and thrive.
The Senate unanimously approved this bill last month. The President is expected to sign this measure into law.