Amendment to EEA Would Create Civil Cause of Action for First Time

A newly proposed amendment stands to modify the Economic Espionage Act (“EEA”), 18 U.S.C. 1831 et seq., which criminalizes trade secret theft, to allow a private civil cause of action for injunctive or monetary relief. The amendment would create a federal statute governing trade secret misappropriation in certain limited circumstances and offer federal protection for trade secrets as in the case of other types of intellectual property.

Currently, civil litigants bring trade secret misappropriation actions under state statutes or common law. Federal actions under the EEA may be brought when related to interstate or foreign commerce but only by the Attorney General as a criminal matter under 18 U.S.C. §1832(a).

Senator Christopher Coons (D-Delaware), along with Senator Herb Kohl (D-Wisconsin), has proposed an amendment to §1832 that would allow for the option of a private civil action. However, a special affidavit would be required of the plaintiff that demonstrates either: (1) a substantial need for nationwide service of process; or (2) theft of trade secrets in the United States with transfer to a foreign state. These new amendments would become §1832(b).

The amendment would allow a private entity to pursue a Federal cause of action in the above instances rather than rely on state laws, which tend to vary greatly – even the Uniform Trade Secrets Act, followed by most states, has suffered from uneven implementation. The goal is ostensibly to make protection of American trade secrets easier as long as the affidavit requirements are met. The requirements would limit the amendment’s application to cases of interstate or foreign theft.

The proposed amendment, if accepted, will be attached to the Currency Exchange Rate Oversight Reform Act of 2011.