New Senate Bill Seeks to Increase Penalties for Theft of Trade Secrets
On March 30, U.S. Senator Herb Kohl (D.-WI) introduced the “Economic Espionage Penalty Enhancement Act of 2011.” The bill seeks to increase the maximum penalty for stealing trade secrets or other proprietary information for the benefit of any foreign government, instrumentality, or agent from 15 years to 20 years. The bill also directs the U.S. Sentencing Commission to consider increasing the penalty range for trade secret theft and economic espionage. Kohl’s bill builds off of recommendations made by the U.S. Intellectual Property Enforcement Coordinator, the U.S. Trade Representative, and the departments of Commerce, Homeland Security, Justice and State.
The bill has been co-sponsored by Senators Coons (D.-DE) and Whitehouse (D.-RI) and has been referred to the Senate Judiciary Committee. At a recent Senate Judiciary Committee hearing, Senator Kohl asked the Director of the FBI, Robert Mueller III, if he supported the proposed legislation to increase penalties for stealing trade secrets. Director Mueller indicated that he expected that enhanced penalties would be looked upon favorably.
The original Economic Espionage Act was enacted by Congress in 1996; it made stealing a trade secret a federal crime. Despite the federal criminalization of trade secret theft, incidences of trade secret theft have continued to grow over the past 15 years.
I’m skeptical as to how much a five year increase in the maximum penalty would dampen international trade secret theft. If a trade secret thief is not dissuaded by the prospect of 15 years in prison, will expanding the penalty to 20 years really alter the would-be thief’s decision calculus that much? Senator Kohl’s press release indicates that the bill is “intended to be a starting point for a larger discussion about the implementation of the Economic Espionage Act and whether additional updates and improvements are needed in light of the global economy and advances in technology.”
While I support Senator Kohl’s efforts to update the Economic Espionage Act and enhance its effectiveness, the bill will likely need to tackle much more than just increasing the maximum for prison time for violations.