At the beginning of this year, President Biden signed the Protecting American Intellectual Property Act into law. We already have laws protecting intellectual property assets, as well as measures to punish those who flout those laws: civil lawsuits, the U.S. restricted parties list, and criminal prosecution. So what, exactly, is the point of this new act?
Specifically, the Protecting American Intellectual Property Act is designed to make foreign actors think twice about stealing U.S. trade secrets. The Act does this by promising economic sanctions on those who violate the act by committing trade secret theft.
How Does the New Act Deter Foreign Actors from Stealing Trade Secrets?
The gist of the law is that it requires the President to provide ongoing reports to Congress which identify foreign entities and individuals who:
- Engaged in trade secret theft from U.S. businesses
- Benefited from that theft
- Are involved with entities who engaged in such behavior
You can see the specifics of those who fall into these categories here.
The first of these reports is to be provided six months after the law is enacted, so roughly in early July. After that, new reports will be given to Congress each year.
Those entities listed in the report will be hit with a minimum of five sanctions, including such things as:
- Addition to the Entity List
- An inability to receive loans from U.S. financial institutions
- A prohibition on investing in those entities
- Entry into the U.S. blocked (for individuals listed)
The only exception to these sanctions: if the President believes waiving them for specific entities is in our national interest.
Will This New Law Be Successful in Protecting American Trade Secrets?
While it is impossible to say for sure until we see the law in action, it does seem like a potentially valuable enforcement tool for the owners of trade secrets.
Up until now, a number of hurdles have largely barred U.S. victims of trade secret theft from going after foreign actors. Those barriers, unfortunately, are not going anywhere – but having these sanctions as a deterrent might help.