Industrial Espionage Act of 1996
S 1556 IS
104th CONGRESS
2d Session
To prohibit economic espionage, to provide for the protection of United
States proprietary economic information in interstate and foreign commerce,
and for other purposes.
IN THE SENATE OF THE UNITED STATES
February 1, 1996
Mr. KOHL (for himself and Mr. SPECTER) introduced the following bill; which
was read twice and referred to the Committee on the Judiciary
A BILL
To prohibit economic espionage, to provide for the protection of United
States proprietary economic information in interstate and foreign commerce,
and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States
of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `Industrial Espionage Act of 1996'.
SEC. 2. FINDINGS AND PURPOSES.
(a) FINDINGS- Congress finds that--
(1) sustaining a healthy and competitive national economy is imperative;
(2) the development and production of proprietary economic information involves
every aspect of interstate commerce and business;
(3) the development, production, protection, and lawful exchange, sale,
and transfer of proprietary economic information is essential to maintaining
the health and competitiveness of interstate commerce and the national economy;
(4) much proprietary economic information moves in interstate and foreign
commerce and proprietary economic information that does not move in interstate
or foreign commerce directly and substantially affects proprietary economic
information that does;
(5) the theft, wrongful destruction or alteration, misappropriation, and
wrongful conversion of proprietary economic information substantially affects
and harms interstate commerce, costing United States firms, businesses,
industries, and consumers millions of dollars each year; and
(6) enforcement of existing State laws protecting proprietary economic information
is frustrated by the ease with which stolen or wrongfully appropriated proprietary
economic information is transferred across State and national boundaries.
(b) PURPOSE- The purpose of this Act is to promote the development and lawful
utilization of United States proprietary economic information produced for,
or placed in, interstate and foreign commerce by protecting it from theft,
wrongful destruction or alteration, misappropriation, and conversion.
SEC. 3. PREVENTION OF ECONOMIC ESPIONAGE AND PROTECTION OF
PROPRIETARY ECONOMIC INFORMATION IN INTERSTATE AND FOREIGN COMMERCE.
(a) IN GENERAL- Title 18, United States Code, is amended by inserting after
chapter 89 the following new chapter:
`CHAPTER 90--PROTECTION OF PROPRIETARY ECONOMIC INFORMATION
`Sec.
`1831. Definitions.
`1832. Criminal activities affecting proprietary economic information.
`1833. Criminal forfeiture.
`1834. Import and export sanctions.
`1835. Extra territoriality.
`1836. Construction with other laws.
`1837. Preservation of confidentiality.
`1838. Law enforcement and intelligence activities.
`Sec. 1831. Definitions
`As used in this chapter:
`(1) The term `person' means a natural person, corporation, agency, association,
institution, or any other legal, commercial, or business entity.
`(2) The term `proprietary economic information' means all forms and types
of financial, business, scientific, technical, economic, or engineering
information, including, but not limited to, data, plans, tools, mechanisms,
compounds, formulas, designs, prototypes, processes, procedures, programs,
codes, or commercial strategies, whether tangible or intangible, and however
stored, compiled, or memorialized, if--
`(A) the owner has taken reasonable measures to keep such information confidential;
and
`(B) the information derives independent economic value, actual or potential,
from not being generally known to, and not being readily ascertainable,
acquired, or developed by legal means by the public.
`(3) The term `owner' means the United States person or persons in whom,
or United States Government component, department, or agency in which, rightful
legal, beneficial, or equitable title to, or license in, proprietary economic
information is reposed.
`(4) The term `United States person' means--
`(A) in the case of a natural person, a United States citizen or permanent
resident alien; and
`(B) in the case of a non natural person, an entity substantially owned
or controlled by the United States Government or by United States citizens
or permanent resident aliens, or incorporated in the United States.
`Sec. 1832. Criminal activities affecting proprietary economic information
`(a) Any person, with intent to, or reason to believe that it will, injure
any owner of proprietary economic information having a value of not less
than $100,000 that is produced for, or placed in, interstate commerce, and
with intent to convert it to his or her own direct use or benefit or the
direct use or benefit of another, knowingly--
`(1) steals, wrongfully appropriates, takes, carries away, or conceals,
or by fraud, artifice, or deception obtains such information;
`(2) wrongfully copies, duplicates, sketches, draws, photographs, downloads,
uploads, alters, destroys, photocopies, or replicates such information;
`(3) receives, buys, or possesses such information, knowing the same to
have been stolen or wrongfully appropriated, obtained, or converted;
`(4) attempts to commit any offense described in paragraphs (1) through
(3);
`(5) wrongfully solicits another to commit any offense described in paragraphs
(1) through (3); or
`(6) conspires with one or more other persons to commit any offense described
in paragraphs (1) through (3), and one or more of such persons do any act
to effect the object of the conspiracy, shall, except as provided in subsection
(b), be fined not more than $250,000 or imprisoned not more than 15 years,
or both.
`(b) Any corporation that commits any offense described in paragraphs (1)
through (6) of subsection (a) shall be fined not more than $10,000,000.
`Sec. 1833. Criminal forfeiture
`(a) Notwithstanding any provision of State law, any person convicted of
a violation under this chapter shall forfeit to the United States-
`(1) any property constituting or derived from, any proceeds the person
obtained, directly or indirectly, as the result of such violation; and
`(2) any of the person's property used, or intended to be used, in any manner
or part to commit or facilitate the commission of such violation.
`(b) The court, in imposing a sentence on such person, shall order, in addition
to any other sentence imposed described in this section.
`(c) Property subject to forfeiture under this section, any seizure and
disposition thereof, and any administrative or judicial proceeding in relation
thereto, shall be governed by section 413 of the Comprehensive Drug Abuse
Prevention and Control Act of 1970 (21) U.S.C. 853), except for subsection
413(d) which shall not apply to forfeitures under this section.
`(d) Notwithstanding section 524(c) of title 28, there shall be deposited
in the Crime Victims Fund established under section 1402 of the Victims
of Crime Act of 1984 (42 U.S.C. 10601) all amounts from the forfeiture of
property under this section remaining after the payment of expenses and
sale authorized by law.
`Sec. 1834. Import and export sanctions
`(a) The President may prohibit for a period of up to 3 years, the importation
into, or exportation from, the United States of any product produced, made,
assembled, or manufactured by a person convicted of any offense described
in section 1832.
`(b) The Attorney General may impose a civil penalty not to exceed 5 times
the value of the exports or imports involved or $100,000, whichever is greater,
against any person who knowingly violates any order of the President issued
under the authority of this section. Such penalty may be imposed only after
notice and opportunity for a hearing on the record in accordance with sections
554 through 557 of title 5.
`Sec. 1835. Extra territoriality
`(a) This chapter applies to conduct occurring within the United States.
`(b) This chapter applies to conduct occurring outside the territorial and
special maritime jurisdiction of the United States, its territories, and
possessions if--
`(1) the offender is a United States person; or
`(2) the victim of the offense is an owner (as defined in section 1831),
and the offense was intended to have, or had, an effect in the United States.
`Sec. 1836. Construction with other laws
`This chapter shall not be construed to preempt or displace any other Federal
or State remedies, whether civil or criminal, for the misappropriation of
proprietary economic information, or to affect the otherwise lawful disclosure
of information by any government employee under section 552 of title 5 (commonly
known as the Freedom of Information Act).
`Sec. 1837. Preservation of confidentiality
`In any prosecution under this chapter, the court may enter such orders
and take such other action as may be necessary and appropriate to preserve
the confidentiality of proprietary economic information, consistent with
rule 16 of the Federal Rules of Criminal Procedure, the Federal Rules of
Evidence, and other applicable laws. An interlocutory appeal by the United
States shall lie from a decision or order of a district court authorizing
the disclosure of proprietary economic information.
`Sec. 1838. Law enforcement and intelligence activities
`This chapter does not prohibit any lawfully authorized investigative, protective,
or intelligence activity of a law enforcement agency of the United States,
a State, or a political subdivision of a State, or an intelligence agency
of the United States.'.
(b) TECHNICAL AMENDMENT- The table of chapters for title 18, United States
Code, is amended by inserting after the item relating to chapter 89 the
following new item: 1831'.
SEC. 4. WIRE AND ELECTRONIC COMMUNICATIONS INTERCEPTION AND INTERCEPTION
OF ORAL COMMUNICATIONS.
Section 2516(1)(a) of title 18, United States Code, is amended by inserting
`chapter 90 (relating to economic espionage and protection of proprietary
economic information in interstate and foreign commerce),' after `title:'.
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