Following up on yesterday’s post, I would like to detail the terrific Trade Secret Law Committee Meeting we had on Thursday with Assistant U.S. Trade Representative (AUSTR) Stanford McCoy. AUSTR McCoy had spoken earlier in the day on a panel about protecting intellectual property through foreign trade agreements and emphasized how trade secrets had emerged from an “obscure” issue to a “big priority” within the Administration. Afterwards, I approached him in the hope that he might join our Committee meeting; he told me he would have liked to but he was committed to another meeting while in Seattle.
Peter Toren’s Presentation on the Obama Trade Secret Initiative and Strategy
At the Committee Meeting, Peter Toren provided a summary of the Obama Trade Secret Strategy announced on February 20, 2013 and shared his concerns that the Administration presently lacked the resources to prosecute trade secret theft under the Economic Espionage Act (EEA). He provided some sobering statistics that showed that there had been only 127 prosecutions under the EEA since its inception in 1996, and that with the exception of the Northern District of California, the majority of U.S. Attorney’s offices had not been vigorously pursuing those prosecutions (for example, less than 45% had prosecuted a single EEA case).
Peter emphasized that while the Obama Administration’s action items certainly represented a step in the right direction, its success would depend on whether the government actually followed through with the proposed action. Moreover, Peter noted that even if the Administration implemented the programs and increased protection of trade secrets, it could only do so much in this era of government cutbacks, a fact evidenced by his statistics on the EEA. Peter ultimately concluded that businesses must do more to protect their trade secrets. A copy of Peter’s blog post on the presentation and his PowerPoint can be found here.
The Panel Discussion and AUSTR McCoy’s Surprise Visit
After Peter’s presentation, I moderated a panel discussion with Peter, Dan Westman of Morrison & Foerster, John Durham of Poyner Spruills, and Seth Hudson of Clements Bernard regarding our thoughts over the recent Obama initiative. The concensus was that it was a welcome step but that a private right of action was needed.
About mid-way through the panel discussion, AUSTR McCoy joined us unexpectedly. He participated in the discussion and after listening to our initial comments, he advised that he appreciated our comments but indicated that the administration needed to hear from the Committee more often. He said the administration would like to have had our input on recent requests for input on Section 301 proceedings and he asked that we work with Victoria Espinel, the U.S. Intellectual Property Enforcement Coordinator (IPEC) to provide comments to legislation affecting trade secrets.
Dan Westman then spoke, emphasizing that there was a serious need for a civil remedy under the EEA. Dan said it was his understanding that the Administration might be privy to even more about China’s role in the cyberattacks and trade secret theft than had been reported or suspected in recent months. For this reason, Dan noted that the time was right, especially given the fact that leading IP associations like the AIPLA and IPO had supported the civil remedy in their public comments. AUSTR McCoy indicated that he obviously could not comment other than to note that the Administration was obviously very concerned and that trade secret theft was now a big issue for the Administration.
Consistent with his presentation, Peter echoed that the Justice Department simply did not have the resources or the manpower to pursue the trade secret claims that were out there and that a private right of action would be the most effective way to ensure that American trade secrets were protected. I of course eventually chimed in and noted that in my experience, foreign companies were not enamored with American litigation and discovery. I said that arming American companies and their attorneys with a private right of action would allow the Administration to unleash the proverbial army of private attorney generals to enforce American trade secret laws much to the chagrin of those foreign companies who so loathe and fear the American court system.
In terms of a timetable on the public comments, AUSTR McCoy said the IPEC was reviewing the public comments (13 of which were filed by the April 22 deadline), would circulate her thoughts to relevant constituencies within the Administration (with special emphasis with the Justice Department) and make a recommendation regarding the legislative proposals.
It was a marvelous and fun discussion. Members of the Committee that were present were active participants as well and asked questions not only of the panel but also AUSTR McCoy. We look forward to working with AUSTR McCoy and his office in the future.