Economic Espionage and Protection of Proprietary Economic Information Act of 1995

[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 1525 Introduced in Senate (IS)]

  2d Session
                                S. 1525

    To amend title 18 of the United States Code to prevent economic
     espionage and 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

                            January 25, 1996

   Mr. Cohen introduced the following bill; which was read twice and
               referred to the Committee on the Judiciary

_______________________________________________________________________

                                 A BILL

    To amend title 18 of the United States Code to prevent economic
     espionage and 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 ``Economic Espionage and Protection of
Proprietary Economic Information Act of 1995''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--Congress finds that--
            (1) sustaining a healthy and competitive national economy
        is imperative to maintaining the security of the Nation;
            (2) the development and production of proprietary economic
        information is an integral part of virtually every aspect of
        United States trade, 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 critical segments of United States business
        and industry, and hence to the national economy and the
        national security;
            (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 affects that which does;
            (5) the theft, misappropriation, and wrongful receipt,
        transfer, exchange, and use of stolen or misappropriated
        proprietary economic information by foreign governments and
        their agents or instrumentalities costs the United States
        Government and United States firms, businesses, industries, and
        consumers millions of dollars each year;
            (6) the theft, misappropriation, and wrongful receipt,
        transfer, and use of proprietary economic information belonging
        to the United States Government and United States firms,
        businesses, and industry by foreign governments and their
        agents or instrumentalities directly and substantially
        threatens the health and competitiveness of critical segments
        of the United States economy and, consequently, the Nation's
        security; and
            (7) 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) Purposes.--
            (1) Primary purpose.--The primary purpose of this Act is to
        protect the national security by preventing economic espionage
        and furthering the development and lawful use of United States
        proprietary economic information by protecting it from theft,
        wrongful destruction or alteration, misappropriation, and
        conversion by foreign governments and their agents or
        instrumentalities. This Act is intended to protect the
        proprietary economic information of the United States
        Government and United States firms, businesses, industries, and
        individuals both domestically and abroad by punishing
        individuals, corporations, and institutions which engage in
        economic espionage with the intent or purpose of aiding foreign
        nations or governments and their instrumentalities.
            (2) Secondary purpose.--The secondary purpose of this Act
        is to affirm that proprietary economic information is included
        in the term ``goods, wares, or merchandise'' as that term is
        used in Federal laws relating to stolen property.

SEC. 3. PREVENTION OF ECONOMIC ESPIONAGE AND PROTECTION OF PROPRIETARY
              ECONOMIC INFORMATION IN INTERSTATE AND FOREIGN COMMERCE.

    (a) Economic Espionage.--Part I of title 18, United States Code, is
amended by adding after chapter 27 the following new chapter:

``CHAPTER 28--ECONOMIC ESPIONAGE AND PROTECTION OF PROPRIETARY ECONOMIC
                              INFORMATION

``Sec.
``570. Definitions.
``571. Engaging in economic espionage to aid foreign governments,
                            corporations, institutions, or
                            instrumentalities.
``572. Vicarious liability.
``573. Forfeiture.
``574. Extraterritoriality.
``575. Construction with other laws.
``576. Preservation of confidentiality.
``577. Nonapplicability to lawfully authorized law enforcement or
                            intelligence activities.
``Sec. 570. Definitions
    ``As used in this chapter:
            ``(1) The term `foreign corporation, institution, or
        instrumentality' means any corporation, agency, component,
        institution, association, instrumentality, or legal,
        commercial, or business entity that is substantially owned,
        controlled, sponsored, commanded, managed, patronized,
        dominated, or chartered by a foreign government or subdivision
        of a foreign government.
            ``(2) The term `foreign agent' means any officer, employee,
        proxy, servant, delegate, or representative of a foreign nation
        or government.
            ``(3) The term `person' means a natural person,
        corporation, agency, association, institution, or any other
        legal, commercial, or business entity.
            ``(4) 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
        whether stored, compiled, or memorialized physically,
        electronically, graphically, photographically, or in writing
        provided that:
                    ``(A) the owner thereof has taken reasonable
                measures to keep such information confidential; and
                    ``(B) the information is not available generally
                to, or accessible by, the public.
            ``(5) 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.
            ``(6) 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. 571. Engaging in economic espionage to aid foreign nations
              governments, corporations, institutions, or
              instrumentalities
    ``(a) Any person who, with intent to, or reason to believe that it
will injure or disadvantage any owner and benefit or advantage any
foreign nation, government, corporation, institution, or
instrumentality who--
            ``(1) steals, wrongfully appropriates, takes, carries away,
        or conceals, or by fraud, artifice, or deception obtains
        proprietary economic information;
            ``(2) wrongfully copies, duplicates, sketches, draws,
        photographs, downloads, uploads, alters, destroys, photocopies,
        replicates, transmits, delivers, sends, mails, communicates, or
        conveys proprietary economic information;
            ``(3) being entrusted with, or having lawful possession or
        control of, or access to, proprietary economic information,
        wrongfully copies, duplicates, sketches, draws, photographs,
        downloads, uploads, alters, destroys, photocopies, replicates,
        transmits, delivers, sends, mails, communicates, or conveys the
        same;
            ``(4) receives, buys, or possesses proprietary economic
        information, knowing the same to have been stolen or wrongfully
        appropriated, obtained, or converted;
            ``(5) attempts to commit any offense described in paragraph
        (1), (2), (3), or (4);
            ``(6) wrongfully solicits another to commit any offense
        described in paragraph (1), (2), (3), or (4); or
            ``(7) conspires with one or more other persons to commit
        any offense described in paragraph (1), (2), (3), or (4), 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
$1,000,000, imprisoned not more than 25 years, or both.
    ``(b) Any corporation that commits any offense described in
subsection (a) shall be fined not more than $50,000,000.
``Sec. 572. Vicarious liability
    ``Any officer, director, manager, or other person occupying a
position of authority and responsibility for the acquisition, use, or
management of proprietary economic information for any corporation or
other business or commercial entity who--
            ``(1) knows or has reason to know that agents or employees
        of the corporation or entity have wrongfully acquired or
        manipulated proprietary economic information in violation of
        section 571(a); and
            ``(2) directly or indirectly authorizes, permits, or
        suffers the information wrongfully acquired or manipulated to
        be used to injure or disadvantage any owner and benefit or
        advantage any foreign nation, government, corporation,
        institution, or instrumentality,
shall be fined not more than $5,000,000, imprisoned not more than 25
years, or both.
``Sec. 573. Forfeiture
    ``(a) Notwithstanding any provision of State law, any person
convicted of a violation of this chapter shall forfeit to the United
States--
            ``(1) any property constituting, or derived from, any
        proceeds the person obtained, directly or indirectly, as a
        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 to facilitate the
        commission of a violation of this chapter.
    ``(b) The court, in imposing sentence on a defendant for the
conviction of a violation of this chapter, shall order that the
defendant forfeit to the United States all property described in
subsection (a).
    ``(c) Except as provided in subsection (d), the provisions of
subsections (b), (c), and (e) through (p) of section 413 of the
Comprehensive Drug Abuse Prevention and Control Act of 1970 (21 U.S.C.
853 (b), (c), and (e)-(p)) shall apply to--
            ``(1) property subject to forfeiture under this section;
            ``(2) any seizure or disposition of such property; and
            ``(3) any administrative or judicial proceeding in relation
        to such property, if consistent with 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. 574. Extraterritoriality
    ``(a) This chapter applies to conduct occurring within the
territorial and special maritime jurisdiction of the United States, its
territories, and possessions.
    ``(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 citizen; or
            ``(2) the victim of the offense is an `owner,' as defined
        in section 570, and the offense was intended to have, or had,
        an effect in the United States.
``Sec. 575. 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.
``Sec. 576. Preservation of confidentiality
    ``In any prosecution under this chapter, the court shall preserve
the confidentiality of alleged proprietary economic information by any
reasonable and lawful means including, but not limited to--
            ``(1) the granting of protective orders in connection with
        discovery proceedings; and
            ``(2) the holding of in camera hearings, sealing relevant
        portions of the record, and the ordering of any person involved
        in the proceedings not to disclose the alleged proprietary
        economic information without prior court approval. Any owner of
        the proprietary economic information which is the subject of
        the offense may request the prosecution to seek such protective
        action.
``Sec. 577. Nonapplicability to lawfully authorized law enforcement or
              intelligence activities
    ``Any act in which information is seized, taken, transported,
transmitted, or transferred pursuant to or in furtherance of 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, shall not be considered a violation of section 571(a) or
572.''.
    (b) Table of Chapters.--The table of chapters for part I of title
18, United States Code, is amended by inserting after the item for
chapter 27 the following:

``28. Economic Espionage....................................     570''.

SEC. 4. RELATED AMENDMENTS.

    (a) Stolen Property.--Section 2311 of title 18, United States Code,
is amended by inserting between the items for ``Cattle'' and
``livestock'' the following:
    ```Goods, wares, or merchandise' means all forms and types of
personal property and chattels--
            ``(1) including all forms and types of financial, business,
        scientific, technical, economic, or engineering information
        including data, plans, tools, mechanisms, compounds, formulas,
        designs, prototypes, processes, procedures, programs, codes, or
        commercial strategies, whether tangible or intangible, and
        whether stored, compiled, or memorialized physically,
        electronically, graphically, photographically, or in writing
        if--
                    ``(A) the owner thereof has taken reasonable
                measures to keep such property confidential, and
                    ``(B) the property is not available generally to,
                or accessible by, the public; and
            ``(2) not including any property or chattel seized, taken,
        transported, transmitted, or transferred pursuant to or in
        furtherance of 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 of an intelligence agency of the
        United States.''.
    (b) Racketeer Influenced and Corrupt Organizations.--Section
1961(1)(B) of title 18, United States Code, is amended by inserting
between ``sections 471, 472, and 473 (relating to counterfeiting),''
and ``section 659 (relating to theft from interstate shipment)'' the
following: ``sections 571 and 572 (relating to economic espionage and
protection of proprietary economic information in interstate and
foreign commerce),''.
    (c) Wire and Electronic Communications Interception and
Interception of Oral Communications.--Section 2516(1)(a) of title 18,
United States Code, is amended by inserting the following between ``or
under the following chapters of this title:'' and ``chapter 37
(relating to espionage)'' the following: ``chapter 28 (relating to
economic espionage and protection of proprietary economic information
in interstate and foreign commerce),''.
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