The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
Prepared By: The Professional Staff of the Committee on Rules
BILL: CS/SB 1378
INTRODUCER: Judiciary Committee and Senator Bradley
SUBJECT: Corporate Espionage
DATE: March 23, 2021 REVISED:
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Cellon Jones CJ Favorable
2. Bond Cibula JU Fav/CS
3. Cellon Phelps RC Favorable
Please see Section IX. for Additional Information:
COMMITTEE SUBSTITUTE - Substantial Changes
I. Summary:
CS/SB 1378 creates the “Combating Corporate Espionage in Florida Act” within s. 812.081, F.S.
The bill creates, amends, and reorganizes current definitions in s. 812.081(1), F.S. The bill
amends the current third degree felony for theft of a trade secret to simplify language and move
the offense from level 1 to level 3 on the offense severity chart.
The bill also creates a new second degree felony for trafficking in trade secrets. A person who
traffics in, or attempts to traffic in, trade secrets commits the offense. Trafficking in trade secrets
is a level 5 offense on the offense severity ranking chart.
The bill adds that, if a person commits either of the felony offenses described above with the
intent to benefit a foreign government, foreign agent, or foreign instrumentality, the offense
felony is reclassified as one degree higher, and the reclassified offense is increased one level on
the offense severity ranking chart.
A court must order restitution if a person is convicted of violating s. 812.081, F.S., and the
restitution must include the value of the benefit derived from the offense. The value of the
benefit derived from the offense includes any expenses for research and design and other costs of
reproducing the trade secret which the person has avoided by committing the offense. The bill
also creates a civil cause of action for a victim of trade secret theft. The victim is entitled to
injunctive relief and, where an injunction is not equitable, the victim is entitled to royalties.
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The bill creates a defense to criminal and civil liability for a person who confidentially discloses
a trade secret to an attorney, law enforcement officer, or government official, for purposes of
reporting or investigating an offense. A disclosure made under seal in a legal proceeding is also
protected.
The bill may have a positive indeterminate (i.e. unquantifiable increase) prison bed impact on the
Department of Corrections. See Section V. Fiscal Impact Statement.
The bill is effective October 1, 2021.
II. Present Situation:
Trade Secrets
Section 812.081, F.S., defines a “trade secret” as information1 used in the operation of a
business, which provides the business an advantage or an opportunity to obtain an advantage,
over those who do not know or use it. The test provided in statute, and adopted by Florida
courts,2 requires that a trade secret be actively protected from loss or public availability to any
person not selected by the secret’s owner to have access thereto, and be:
 Secret;
 Of value;
 For use or in use by the business; and
 Of advantage to the business, or providing an opportunity to obtain an advantage, over those
who do not know or use it.3
Section 812.081(2), F.S., makes it a third degree felony4 for a person to deprive or withhold from
the owner the control of a trade secret or to intentionally misappropriate a trade secret from its
owner, including stealing or embezzling an article representing a trade secret or without authority
making or causing to be made a copy of an article representing a trade secret. It is not a defense,
if a person returned or intended to return the article stolen, embezzled, or copied.5
What is Corporate (or Economic) Espionage?
According to the Federal Bureau of Investigation (FBI), historically, economic espionage has
targeted defense-related and high-tech industries. But recent FBI cases have shown that no
industry, large or small, is immune to the threat. Any company with a proprietary product,
process, or idea can be a target; any unprotected trade secret is vulnerable to theft by those who
1
A trade secret may manifest as “any scientific, technical, or commercial information, including financial information, and
includes any design, process, procedure, list of suppliers, list of customers, business code, or improvement thereof” pursuant
to s. 812.081(1)(c), F.S.
2
See, e.g., Sepro Corp. v. Dep’t. of Envt’l. Prot., 839 So. 2d 781 (Fla. 1st DCA 2003).
3
Section 812.081(1)(c), F.S.
4
A third degree felony is punishable by up to 5 years imprisonment and a $5,000 fine. Sections 775.082 and 775.083, F.S.
5
Section 812.081(3), F.S.
BILL: CS/SB 1378 Page 3
wish to illegally obtain innovations to increase their market share at a victim company’s
expense.6 Examples of corporate espionage include:
 A person acting on behalf of himself or herself such as where a dissatisfied employee breaks
into company records of his or her employer in order to cause damage to the company; or
 A person acting on behalf of a competitor company, such as where a company hires an
employee (or an outside party) to illegally investigate a competitor’s business.7
Technology-based companies are prone to industrial espionage issues, especially with regards to
novel ideas or technology products. For instance, biotechnology companies, software firms, and
automobile companies tend to be the target of corporate espionage. Transferring stolen company
property or stolen trade secrets can also be considered espionage.8
The FBI reports that economic espionage is a problem that costs the American economy
hundreds of billions of dollars per year. While it is not a new threat, it is a growing one, and theft
attempts by foreign competitors and adversaries are becoming more brazen and varied. These
foreign competitors deliberately target economic intelligence in advanced technologies and
flourishing U.S. industries.9
Foreign Influence Uncovered in University Research Programs
According to a National Institutes of Health (NIH) Advisory Committee report, some foreign
governments have initiated systematic programs to unduly influence and capitalize on U.S.-
conducted research. Small numbers of scientists have committed serious violations of policies
and systems by not disclosing foreign support (i.e., grants), laboratories, or funded faculty
positions in other countries. These efforts by foreign governments to obtain a competitive
advantage in critical areas of research and innovation at the cost of the research enterprises and
those that fund them are few, but serious.10
For example, in 2019, four faculty members left the University of Florida (UF) after the
university and the National Institutes of Health found possible ties to foreign institutions that
may have violated funding and research rules.11 The NIH first reached out to universities across
the nation in August 2018 with a letter that expressed concerns about foreign entities trying to
influence U.S. research. The NIH later identified two UF faculty members who may have been
6
FBI, What We Investigate, Counterintelligence, Economic Espionage, available at
https://www.fbi.gov/investigate/counterintelligence (last visited March 5, 2021). See also FBI, What We Investigate,
Counterintelligence, Economic Espionage, News, Stories, Trade Secret Theft, Investigation into Theft of Intellectual Property
from GE Leads to Two Guilty Pleas, July 29, 2020, available at https://www.fbi.gov/news/stories/two-guilty-in-theft-of-
trade-secrets-from-ge-072920 (last visited Mar. 5, 2021).
7
LegalMatch, What is Industrial Espionage?, available at https://www.legalmatch.com/law-library/article/industrial-
espionage-lawyers.html (last visited Mar. 5, 2021).
8
Id.
9
FBI, What We Investigate, Counterintelligence, Economic Espionage, available at
https://www.fbi.gov/investigate/counterintelligence (last visited Mar. 5, 2021).
10
NIH Advisory Committee to the Director (ACD), ACD Working Group for Foreign Influences on Research Integrity,
December 2018 Report, p. 5, available at
https://acd.od.nih.gov/documents/presentations/12132018ForeignInfluences_report.pdf (last visited Mar. 4, 2021).
11
Emily Mavrakis, UF: Former faculty did not disclose China affiliations, THE GAINESVILLE SUN, January 22, 2020,
available at https://www.gainesville.com/news/20200122/uf-former-faculty-did-not-disclose-china-affiliations (last visited
Mar. 4, 2021).
BILL: CS/SB 1378 Page 4
connected to foreign entities. Through the university’s own assessments, two additional faculty
members raised concerns.12 For example:
 One faculty member (“Faculty 1”) had been employed by UF since 1995. In addition to
serving as the vice president at a China university since at least 2017, Faculty 1 was the
director of an institute at a different Chinese university. While conducting research at UF,
Faculty 1 served as the principal investigator for one NIH-funded project. None of Faculty
1’s foreign affiliations was reported to UF nor the NIH.
 “Faculty 3” joined UF as a postdoctoral associate in the College of Medicine, and was
appointed as a part-time research associate professor in 2012. The researcher focused on
virology, gene therapy and traditional Chinese medicine. Faculty 3 was the principal
investigator on one NIH-funded project and co-principal investigator for a second project
prior to termination. That faculty member received an undisclosed grant from China, had an
appointment at a Chinese university since 2017 and received a Chinese Thousand Talents
award.13
During a meeting of the Florida House Select Committee on the Integrity of Research
Institutions, a national security spokesman for the U.S. Department of Justice said in a prepared
statement that China is implicated in more than 80 percent of all economic espionage charges
brought by the department since 2012.14
Federal Law
The Economic Espionage Act of 1996
The Economic Espionage Act of 1996 (EEA) was the first federal law to define15 and punish the
theft or misappropriation of trade secrets. The EEA criminalizes theft of trade secrets and
economic espionage, as follows:
 Theft of trade secrets means the intentional conversion of a trade secret to the economic
benefit of someone other than the owner of the trade secret, with intent or knowledge that the
offense will injure the owner.16 Theft of trade secrets is punishable by up to 10 years in
federal prison and specified fines for an individual or a corporation.17
12
Id. The NIH provided UF with more than $208 million in research grant money in 2019.
13
Id.
14
Id. See also, Bill Gertz, ‘Economic Espionage’: Special DOJ unit cracks down on China’s illicit activities, THE
WASHINGTON TIMES, January 8, 2020, available at https://www.washingtontimes.com/news/2020/jan/8/justice-department-
special-china-unit-targets-beij (last visited Mar. 4, 2021).
15
Under the EEA, a trade secret means all forms and types of financial, business, scientific, technical, economic, or
engineering information, including patterns, plans, compilations, program devices, formulas, designs, prototypes, methods,
techniques, processes, procedures, programs, or codes, whether tangible or intangible, and whether or how stored, compiled,
or memorialized physically, electronically, graphically, photographically, or in writing if: the owner thereof has taken
reasonable measures to keep such information secret; and the information derives independent economic value, actual or
potential, from not being generally known to, and not being readily ascertainable through proper means by, the public.
18 U.S.C. 1839.
16
18 U.S.C. 1832.
17
An individual may be fined up to $250,000 or twice the value of the loss or gain associated with the offense, and a
corporation may be fined up to $5 million, twice the value of the loss or gain associated with the offense, or three times the
value of the stolen trade secret. 18 U.S.C. 1832(a), 3571(c). Here and elsewhere, 18 U.S.C. 3571(d) provides as a general
matter that the maximum for a criminal fine of any federal criminal offense is the greater of the standard amount set for the
particular offense (e.g., $250,000 for individuals convicted of a felony) or twice the gain or loss resulting from the offense.
BILL: CS/SB 1378 Page 5
 Economic espionage refers to theft of a trade secret with the intent or knowledge that such
theft will benefit a foreign government, foreign instrumentality, or foreign agent.18 Economic
espionage is punishable by up to 15 years in federal prison and specified fines for an
individual or corporation.19
The EEA requires a sentencing court to order restitution, provides that property derived from, or
used to facilitate, commission of the offense may be subject to confiscation under either civil or
criminal forfeiture procedures, and the court may issue an order to protect the confidentiality of a
trade secret during prosecution and the government may appeal its failure to do so.
Defend Trade Secrets Act
The Defend Trade Secrets Act of 201620 (DTSA) amended the remedies available under the EEA
by establishing additional remedies for theft of a trade secret or corporate espionage, including,
but not limited to, the following:
 The Attorney General may sue for injunctive relief.
 A trade secret’s owner may bring a private civil action for damages, equitable and injunctive,
court costs, and attorney fees.
 A civil seizure mechanism is available as a preventative measure prior to a formal finding
that a trade secret has been misappropriated.
 The court may require affirmative actions be taken to protect the trade secret.
 In exceptional circumstances rendering an injunction inequitable, the court may condition
future use of a trade secret on payment of a reasonable royalty for no longer than the period
of time for which such use could have been prohibited.21
Because the DTSA does not preempt existing state trade secret law, a trade secret owner may
choose to pursue a civil action for an offense in state or federal court.
III. Effect of Proposed Changes:
The bill creates the “Combating Corporate Espionage in Florida Act” in s. 812.081, F.S.
Definitions
The bill creates the following new definitions in s. 812.081(1), F.S.:
 “Endeavor” means to attempt or try.
 “Foreign agent” means any officer, employee, proxy, servant, delegate, or representative of a
foreign government.
 “Foreign instrumentality” means any agency, bureau, ministry, component, institution,
association, or any legal, commercial, or business organization, corporation, firm, or entity
that is substantially owned, controlled, sponsored, commanded, managed, or dominated by a
foreign government.
18
18 U.S.C. 1831(a).
19
An individual may be fined up to $5 million or twice the value of the loss or gain associated with the offense, and a
corporation may be fined up to $10 million, twice the value of the loss or gain associated with the offense, or three times the
value of the stolen trade secret. 18 U.S.C. 1831(a).
20
18 U.S.C. 1836.
21
Id.
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 “Obtain or use” has the same meaning as provided in s. 812.012(3), F.S.;22 and
 “Person” means a natural person, corporation, business trust, estate, trust, partnership,
association, joint venture, government, governmental subdivision or agency, or any other
legal or commercial entity.
 “Traffic” has the same meaning as provided in s. 812.012(8), F.S.23
The bill amends the definition of “trade secret” to specify that a trade secret may be in tangible
or intangible form; and is a trade secret regardless of whether or how it is stored, compiled, or
memorialized physically, electronically, graphically, photographically, or in writing.
The bill repeals definitions of the terms “article,” “representing,” and “copy.”
Criminal Offenses Related to Trade Secrets
The bill amends t