A bipartisan group of senators has proposed a bill to stem the tide of intellectual property theft by foreign entities that has been plaguing the U.S. economy. On May 7th, Senators Carl Levin (D-Mich.), Jay Rockefeller (D-W.Va.), John McCain (R-Ariz.), and Tom Coburn (R-Okla.) put forth the Deter Cyber Theft Act. This bill would require the Director of National Intelligence (“DNI”) to compile an annual report detailing foreign economic and industrial espionage. The President could then rely on this report to block the import of products derived from stolen American trade secrets and IP.

Specifically, the DNI would have to prioritize the collection of relevant intelligence and include in the annual report lists of:

  • Foreign countries engaging in economic or industrial cyber-espionage against U.S. entities, including a “priority watch list” of the worst offenders;
  • Targeted and stolen U.S. technologies or proprietary information;
  • Products and services derived from such stolen information; and
  • Foreign companies benefitting from such theft.

The bill would also call for the DNI’s report to detail federal efforts to battle economic and industrial cyber-espionage.

Relying on the DNI report, the bill would then empower the President to prohibit the import of any:

  • Products that contain stolen U.S. technology;
  • Products made by state-owned enterprises of “watch list” nations that are similar to stolen U.S. technology; or
  • Products made by companies having benefitted from stolen U.S. technology.

The proposed bill comes just one day after unprecedented U.S. criticism of China’s economic cyber-espionage. Senator Levin echoed the criticisms in a press release regarding the proposed Deter Cyber Theft Act, characterizing China as “by far the largest source of theft attempts against U.S. companies.” This, coupled with the Obama Administration’s recently announced Strategy to Mitigate the Theft of U.S. Trade Secrets that commits to “mak[ing] sure our laws are as effective as possible” against trade secret theft means that the legislative effort of these four influential Senators bears monitoring.