Legislation Introduced to Strengthen USA’s Ability to Combat Economic Espionage

U.S. Senator Kamala D. Harris (D-CA), a member of the Senate Judiciary Committee, has introduced the Deterring Espionage by Foreign Entities through National Defense (DEFEND) Act, which would update the Economic Espionage Act (EEA) to better address the growing threat of economic and industrial espionage perpetrated by foreign actors.

This legislation increases the damages available for victims of trade theft, extends the statute of limitations, and expands the scope of the EEA to encompass a broader range of offences occurring outside of the United States, including cyber crime and hacking.

As foreign agents develop increasingly sophisticated methods of stealing American intellectual property and trade secrets, we must strengthen the tools Americans can use to respond to this growing threat and take steps to secure our economy,” said Harris. “It is absolutely vital that our approach to combating economic espionage is grounded in a modern-day understanding of the tactics employed by foreign actors and that our laws provide a strong deterrent to committing these acts in the first place.”

At a hearing of the Senate Judiciary Committee regarding China’s espionage efforts, Senator Harris expressed her concern about the potential harm to the United States economy and the threat to national security. Harris also questioned Assistant Attorney General John Demers about whether specific provisions of the DEFEND Act would be helpful in deterring trade theft and penalizing offenders.

Demers acknowledged that expanding the extraterritorial scope of the EEA and increasing damages available to victims could be helpful tools in combatting economic espionage and stated that he looked forward to the Department of Justice weighing in on the full bill.

The DEFEND Act would:

  • Increase available punitive damages available to victims under the 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.

Text of the DEFEND Act can be found here.