r. mark halligan- review of intellectual property law

Download R. MARK HALLIGAN- REVIEW OF INTELLECTUAL PROPERTY LAW

Post on 16-Jan-2017

129 views

Category:

Law

1 download

Embed Size (px)

TRANSCRIPT

  • THE JOHN MARSHALL

    REVIEW OF INTELLECTUAL PROPERTY LAW

    REVISITED 2015: PROTECTION OF U.S. TRADE SECRET ASSETS: CRITICAL AMENDMENTS

    TO THE ECONOMIC ESPIONAGE ACT OF 1996

    R. MARK HALLIGAN

    ABSTRACT

    In order to protect the national and economic interests of the United States, the Economic

    Espionage Act was enacted in 1996. Although intended to prevent and deter trade secret theft, the

    EEA is limited to criminal prosecutions. Critical amendments to the EEA are required to create a

    civil cause of action in the new information-based economy and the international marketplace. In

    2008, the author recommended two critical amendments to the Economic Espionage Act that have

    been vetted and have been the subject of legislative proposals for the past 7 years. The author now

    revisits developments since 2008 and underscores the urgency and the compelling national and

    economic interests in amending the Economic Espionage Act of 1996 in the 114th Congress.

    Copyright 2015 The John Marshall Law School

    Cite as R. Mark Halligan , Revisited 2015: Protection of U.S. Trade Secret Assets:

    Critical Amendments to the Economic Espionage Act of 1996, 14 J. MARSHALL REV.

    INTELL. PROP. L. 656 (2015).

  • 656

    REVISITED 2015: PROTECTION OF U.S. TRADE SECRET ASSETS: CRITICAL

    AMENDMENTS TO THE ECONOMIC ESPIONAGE ACT OF 1996

    R. MARK HALLIGAN

    I. INTRODUCTION............................................................................................................. 657

    II. THE LEGISLATIVE HISTORY OF THE EEA .................................................................. 658

    III. PROPRIETARY INFORMATION LOSSES ....................................................................... 661

    IV. FEDERAL PROTECTION OF INTELLECTUAL PROPERTY ASSETS ................................. 663

    V. PRIVATE ENFORCEMENT ............................................................................................. 665

    VI. THE EEA STATUTORY FRAMEWORK........................................................................... 668

    A. Prohibited Acts .................................................................................................. 668

    VII. PROSECUTION UNDER THE EEA .............................................................................. 671

    VIII. NO PREEMPTION .................................................................................................... 672

    IX. NATIONAL SERVICE OF PROCESS .............................................................................. 674

    X. EX PARTE SEIZURE ORDERS ....................................................................................... 675

    XI. EXTRATERRITORIAL JURISDICTION ........................................................................... 675

    XII. UNIFORMITY ............................................................................................................ 676

    XIII. INTERNATIONAL TRADE AND TREATY OBLIGATIONS ............................................. 677

    XIV. MORE EFFECTIVE PROTECTION OF TRADE SECRET ASSETS .................................. 679

    XV. COMPARISONS TO THE COMPUTER FRAUD AND ABUSE ACT ................................... 681

    XVI. OTHER ADVANTAGES OF AN EEA CIVIL CAUSE OF ACTION ................................... 683

    XVII. CONCLUSION ......................................................................................................... 684

  • [14:656 2015] Revisited 2015: Protection of U.S. Trade Secret Assets: 657

    Critical Amendments to the Economic Espionage Act of 1996

    REVISITED 2015: PROTECTION OF U.S. TRADE SECRET ASSETS: CRITICAL

    AMENDMENTS TO THE ECONOMIC ESPIONAGE ACT OF 1996

    R. MARK HALLIGAN *

    I. INTRODUCTION

    On October 11, 1996, President Clinton signed The Economic Espionage Act of

    1996 (EEA) into law.1 The EEA made theft of trade secrets a federal criminal

    offense.2 In 2008, this author recommended two critical amendments to the Economic

    Espionage Act of 1996: (1) the addition of a private civil cause of action; (2) the

    addition of a civil ex parte seizure provision.3 Alarm bells were ringing loud and clear

    in 2008: trade secret theft had become rampant, United States industry had become

    the equivalent of a giant cookie jar permitting foreign agents and unscrupulous

    competitors to steal American know-how with a low probability of detection or

    prosecution.4 Senator Kohl and others read the 2008 article and proposed legislation

    to add a private civil cause of action to the Economic Espionage Act and to add ex

    parte provisions to the EEA.5 Various bills have been introduced in Congress in the

    * R. Mark Halligan 2015. Mr. Halligan is an accomplished trial lawyer who focuses his

    practice on intellectual property litigation and complex commercial litigation, including antitrust

    and licensing issues.Mr. Halligan has successfully represented both individuals and corporations as

    plaintiffs and defendants in federal and state courts throughout the United States and Mr. Halligan

    is recognized as a one of the leading lawyers in trade secrets litigation in the United States by Legal

    500 and he is recognized by Chambers USA: Americas Leading Lawyers for Business for his

    exceptional standing in intellectual property law. In recent years, Mr. Halligan has been at the

    forefront of international developments in intellectual property law and he is a recognized thought

    leader in the ever-growing area of trade secrets law having spoken worldwide to numerous

    organizations and corporations on the topic.

    1 Pub. L. No. 104-294, 110 Stat. 3488 (1996) (codified at 18 U.S.C. 1831-39 (2006)). 2 Id. at sec. 101, 110 Stat. 3489 (codified at 18 U.S.C. 1832(a) (2006)). 3 R. Mark Halligan, Protection of U.S. Trade Secret Assets: Critical Amendments to the

    Economic Espionage Act of 1996, 7 J. MARSH. REV. INTELL. PROP. L. 656 (2008). 4 See Michael L. Rustad, The Negligent Enablement of Trade Secret Misappropriation, 22

    SANTA CLARA COMPUTER & HIGH TECH. L.J. 455, 463 (2006) (noting that there are over 3,000

    Chinese "front companies" that attempt to steal U.S. technologies); see also NAT'L

    INTELLECTUAL. PROP. LAW. ENFORCEMENT COORDINATION COUNCIL, REPORT TO THE

    PRESIDENT AND CONGRESS ON COORDINATION OF INTELLECTUAL PROPERTY

    ENFORCEMENT AND PROTECTION at viii (2008), available at

    www.commerce.gov/NewsRoom/TopNews/ssLINK/prod01_005189 [hereinafter NIPLECC Report]. In

    the Letter of Transmittal, Chris Isreal, U.S. Coordinator for International Intellectual Property

    Enforcement, states: "[r]ampant piracy remains all too common in major markets throughout the

    world, and IP theft continues to be a serious problem here at home." Id. 5 See 142 CONG. REC. S12,207 (statement of Sen. Specter):

    In an increasingly complex and competitive economic world, intellectual property

    forms a critical component of our economy. As traditional industries shift to low-

    wage producers in developing countries, our economic edge depends to an ever-

    increasing degree on the ability of our businesses and inventors to stay one step

    ahead of those in other countries. And American business and inventors have

    been extremely successful and creative in developing intellectual property and

  • [14:656 2015] The John Marshall Review of Intellectual Property Law 658

    112th and 113th Congress culminating with the mark-up of H.R. 5233 which was

    reported favorably out of the House Judiciary Committee, with 23 co-sponsors last

    September, 2014.6 Time expired in the 113th Congress.7 However, the impact of the

    failure to enact these two critical amendments to the EEA continues unabated and

    continues to harm the national and economic interests of the United States.8

    II. THE LEGISLATIVE HISTORY OF THE EEA

    The EEA legislative history illustrates that the Economic Espionage Act of 1996

    was enacted to fill existing gaps in existing federal and state law and to create a

    national scheme to protect U.S. proprietary economic information.9 Congress

    recognized that protecting U.S. trade secrets was necessary to "maintain our

    industrial and economic edge and thus safeguard our national security." 10 According

    to Senator Herbert H. Kohl, a company's proprietary information is incredibly

    important:

    [B]usinesses spend huge amounts of money, time, and though developing

    proprietary economic information -- their customer lists, pricing schedules,

    business agreements, manufacturing processes. This information is literally

    a business's lifeblood. And stealing it is the equivalent of shooting a

    company in the head. . . . The economic strength, competitiveness, and

    security of our country relies [sic] upon the ability of industry to compete

    without unfair interference from foreign governments and from their own

    trade secrets. America leads the nation's [sic] of the world in developing new

    products and new technologies. Millions of jobs depend on the continuation of the

    productive minds of Americans, both native born and immigrants who find the

    freedom here to try new ideas and add to our econ