American Coatings Association

The U.S. House of Representatives approved new legislation addressing the enforcement of U.S. intellectual property laws, the Foreign Economic Espionage Penalty Enhancement Act of 2012 (H.R. 6029), on Jan. 1, 2013. Passage of this legislation will ensure that the penalties under the Economic Espionage Act correctly take into account the harm inflicted on U.S. companies that have had intellectual property stolen by individuals acting on behalf of a foreign government. The House action followed the passage of legislation by the Senate on Dec. 19, 2012.

This legislation follows the passage of the Theft of Trade Secrets Clarification Act of 2012, which was signed by the President on Dec. 28, 2012. This new law was first introduced as S. 3642 in response to a decision of the Second Circuit Court of Appeals in United States v. Aleynikov, in which the court overturned a jury verdict in a case involving the theft of valuable source code. The law clarified the language of the Economic Espionage Act so that trade secret thieves can no longer take advantage of this loophole.

Some ACA member companies have been victims of intellectual property and trade secret espionage.

The threat to U.S. business by economic espionage coordinated by foreign governments is a very real one. The misappropriation of trade secrets can cripple a company’s competitive advantage in foreign markets, diminish export prospects around the globe, and put American jobs in jeopardy. Passage of this legislation is an important step in providing tougher penalties, and serves as deterrence to individuals who would pass trade secrets to foreign governments. 

The bill was presented to President Obama on Jan.3, and he is expected to sign it.

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