House Judiciary Committee hearing on trade secret legislation, and the revolving door

On September 17, the House Judiciary marked up H.R. 5233, “The Trade Secret Protection Act of 2014.” The bill would create a civil right on action in federal courts for misappropriation of trade secrets, as defined in the bill. [Link to hearing, bill and transcript of markup]. This controversial effort to federalize litigation over trade secrets has opposition, including, for example, from 31 law professors who signed an August 26, 2014 letter opposing the bill.

[Link here: https://s3.amazonaws.com/ftt-uploads/tradesecretletter2014.pdf. See the annex for more context on the debate over the bill.]

On June 24, 2014, the House Judiciary Committee held a hearing on trade secret legislation, focusing on the international aspects of the legislation. Witnesses at the hearing supported action on a federal bill, in part to give the United States Trade Representative (USTR) a stronger mandate to create higher global standards for trade secret protections. Recently, corporate lobbying on trade secret norms in trade agreements has increased.

The House Judiciary Committee invited four witnesses to testify. What are the odds that a witness formerly worked on trade and IPR issues for either the Congress or a federal executive agency, and now lobbies for corporate right holders? Apparently 3 out of 4, or 75 percent.

Of the four witnesses, one previously worked for the United States Congress, and two previously worked for USTR and other federal agencies.

Here are the details for those 3 witnesses.

Richard Hertling

Richard Hertling works for Covington & Burling, a firm he joined in 2013. Hertling worked in varying capacities for the U.S. House of Representatives, the U.S. Senate and the U.S. Department of Justice (USDOJ). The Senate roles included Chief Counsel for Senator Specter (R-Pa) and Chief of Staff for Senator Fitzgerald (R-IL). Most recently, he served as the Staff Director and Chief Counsel for the very committee to which he was testifying, the House Judiciary Committee.

Hertling testified in support of the bill, saying, “[recent legislative successes] still have not put trade secrets — so valuable to America’s most innovative companies — on par with other forms of intellectual property, including patents, trademarks, and copyrights, all of which enjoy protection under a federal civil remedy.”

“A consistent, harmonized legal framework will provide a more efficient and effective legal structure to protect the valuable intellectual property of American businesses and help protect and promote U.S. global competitiveness and preserve high-quality U.S. jobs. It will also put trade secret protection in-line with the remedies available for owners of other forms of intellectual property”

Thaddeus Burns

Thaddeus Burns is currently Senior Counsel on IP and Technology Policy for General Electric. Before moving into the private sector, Burns worked for the United States Patent Trade Office (USPTO) and the United States Trade Representative (USTR).

Burns testified on behalf of the Intellectual Property Owners Association (IPO) saying, “The United States must be a leader in trade secret protection. A federal civil remedy for trade secret misappropriation is important for our global trade agenda. To date, the United States has not consistently received cooperation from international jurisdictions in protecting trade secrets in part because it does not have its own federal civil statute to reference in encouraging the adoption and enforcement of similar legislation by its treaty partners… Establishing such a remedy is particularly important as the European Union considers its Trade Secrets Directive and as the United States negotiates multilateral trade agreements and bilateral investment treaties.”

(Not directly related, but interesting: At GE, Burns was a major opponent of the treaty for the blind, on the grounds it would set a precedent in global trade negotiations on patent rights.)

Chris Moore

Chris Moore has held several government positions dealing with trade and IPR issues. He worked for the United States Department of Commerce (DOC) as an International Trade Specialist. From 2003 to 2005, he worked at the Office of the U.S. Trade Representative as a Senior Policy Advisor to the Deputy USTR. From 2005 to 2007, he was Deputy Assistant Secretary for Trade Policy and Programs U.S. Department of State.

After leaving the government, he became an Executive Vice President for Romulus Global Issues Management, then a policy advisor at the United Nations World Food Programme. Now he works for the National Association of Manufacturers, where he is currently Senior Director for International Business Policy. Earlier this year Chris Moore was lobbying USTR to threaten trade sanctions on the compulsory licensing of patents on cancer drugs.

Moore’s testimony on trade secrets also called for Congressional passage of trade promotion authority (fast track).

David Simon

Simon was the only witness who did not previously work for the government. He is currently Senior Vice President for IP at Salesforce.com and testified in support of strong trade secret protection while also expressing concern about seizure provisions included in previous trade secret laws.

“Far more serious, however, is many countries’ failure to recognize trade secrets as a form of property. That refusal to recognize trade secrets as a species of property can have major consequences with enforcement authorities.”

“The lack of consistent protection means that in negotiations the USTR in trying to improve foreign trade secret protection in bilateral and multilateral talks can only seek the lowest common denominator of those state and federal laws.”

Additional Information.

Forbes article discussing the implications of a new Trade Secret law.
http://www.forbes.com/sites/ericgoldman/2014/09/16/congress-is-considering-a-new-federal-trade-secret-law-why/

Letter signed by several professors in opposition to a new Trade Secret law.
https://s3.amazonaws.com/ftt-uploads/tradesecretletter2014.pdf