Washington, D.C. — House Judiciary Committee Chairman Bob Goodlatte (R-Va.) today gave the following statement during the Courts, Intellectual Property, and the Internet Subcommittee hearing on “Safeguarding Trade Secrets in the United States.”

Chairman Goodlatte: For the last several years, the House Judiciary Committee has been working tirelessly to protect American innovators’ inventions while also ensuring that companies are free to innovate without fear of being harassed. One form of invention that deserves strong protection is trade secrets.

Trade secrets are the formulas, algorithms and recipes that give companies an edge over their competition, like the recipes that make Little Debbie Oatmeal Creme Pies and Hershey’s Heath Bars so delicious. Roald Dahl’s fictional Willie Wonka character and his “everlasting gobstopper” teach even children that valuable business information must be kept secret from the competition, and for good reason. Estimates show that trade secret theft costs the U.S. economy between $180 billion and $540 billion. The threat posed by trade secret theft is real and significant. Protecting trade secrets is a national priority, and this committee has demonstrated its commitment to doing so.

Through the enactment of the Defend Trade Secrets Act (DTSA), Congress dramatically improved protections for U.S. trade secrets. That legislation established for the first time in our history a federal right of action for companies to seek redress for the harm caused them through the theft of a trade secret. It also established a new mechanism for companies to obtain the assistance of federal courts and federal law enforcement in securing a lost trade secret before it is disseminated or disclosed. But, given the vital importance of trade secrets to the U.S. economy, Congress must continue to closely monitor the effectiveness of our trade secret protections and do all that it can to protect America’s most valuable technologies from theft.

Unfortunately, some of the same technologies that have done so much to improve our lives continue to make it easy to steal valuable trade secrets. A 32 GB USB flash drive can store 640,000 Word document pages, and file sharing and storage facilities allow users to share files at the mere click of a mouse. Using these technologies, thieves continue to steal the crown jewels of large and small companies alike. Recent examples involve the theft of: marine construction technology, the designs for underwater vehicles developed by a defense contractor, the theft of technology used for printing on any type of material, and even rice seeds genetically programmed to express recombinant human proteins extracted for therapeutic uses.

In this hearing, we will investigate whether the Defend Trade Secrets Act is in fact working as intended. We will also investigate whether additional safeguards are needed to further prevent the theft of U.S. trade secrets.

28 U.S.C. §1782 allows foreign entities with merely an interest in foreign litigation to compel discovery from U.S. companies. The only protections expressly afforded U.S. companies in the statute are limited to “legally applicable privilege[s],” such as the attorney-client privilege. As applied to foreign technology disputes, court interpretations of the statute unquestionably expose the technologies and confidential business information of U.S. companies to possible theft or, at a minimum, disclosure to competitors.

This hearing will provide an opportunity to discuss the need to amend 28 U.S.C. § 1782 to prevent foreign entities from abusing U.S. discovery laws to impermissibly gain access to U.S. trade secrets.

I thank Chairman Issa for overseeing this hearing, and I thank the witnesses for their participation. I look forward to delving into this very important issue.