June 13, 2019

Harris Reintroduces Bill to Combat Economic Espionage

WASHINGTON, D.C. — U.S. Senator Kamala D. Harris (D-CA) on Thursday reintroduced the Deterring Espionage by Foreign Entities through National Defense (DEFEND) Act, legislation to expand the legal tools available to American victims of trade theft. In response to the growing and increasingly sophisticated threat of economic and industrial espionage, the legislation would act as a strong deterrent to foreign actors, such as China, committing these acts in the first place.

“As the threat of economic espionage continues to evolve and expand in scope, we must be committed to modernizing our laws to secure our economy and give Americans tools to respond to trade theft,” said Harris. “This legislation would ensure that foreign actors who seek to steal American trade secrets understand that their actions will be met with serious consequences.”

The DEFEND Act would:

  • Increase available punitive damages available to victims under the Economic Espionage Act (EEA) from two times the amount of damages awarded to three times the amount of damages awarded. This increase in available damages improves the deterrent effect of the EEA while ensuring that victims of trade theft are properly compensated for their injuries.
  • Extend the statute of limitations for civil actions from 3 to 5 years after the “misappropriation” was discovered or should have been discovered.
  • Expand the extraterritorial scope of the EEA to include offenses occurring abroad that have “substantial economic effect” in the United States, ensuring that victims can still be made whole if an offense causes significant economic harm but does not occur on United States soil.

“The move to expand extraterritorial scope is a critical step to align the law with how foreign threat actors target U.S. organizations. We have observed adversary groups stealing sensitive business information from a foreign partners, subsidiaries, suppliers, and customers of many U.S. companies. From a victim organization's perspective, the threat to their business is still the same as if those threats occurred in the territorial United States, but under current law, they are not provided appropriate protection. This bill would help ensure legal mechanisms are available worldwide for U.S. companies targeted by state-backed groups who might otherwise operate without risk or repercussion,” said Christopher Porter, CTO for Global Cybersecurity Policy, FireEye, Inc.

“The DEFEND Act would represent a vital step towards ensuring that American companies doing business abroad, or whose trade secrets are misappropriated abroad, will have better options in U.S. courts to redress misappropriation committed on foreign soil. Expanding the extraterritorial scope of the law would provide U.S. businesses with necessary legal mechanisms to counter the threat of trade secret theft, and I applaud Senator Harris for her leadership on this issue,” said Professor Elizabeth Rowe, University of Florida Levin College of Law

“Senator Harris has a long history of wrestling with the challenges prosecutors face in dealing with cybercriminals. Her DEFEND Act clarifies a critical gap in our nation’s ability to bring cybercriminals to justice. All too often, cybercriminals abroad operate with a sense of impunity because they think they are beyond the reach of the law. American victims of cybercrime have little hope that their attackers will ever see a courtroom. This legislation is intended to allow the government more time to find and indict those who steal our nations’ intellectual property, increase the penalties that they would face for these crimes, and allow the government to bring charges even when the perpetrator does not enter the U.S. With this act, the long arm of the law gets even longer,” said Mieke Eoyang, Vice President for the National Security Program, Third Way 

For full bill text, click here.

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