When Does Trade Secret Theft Become a Federal Crime?

Trade secret theft is generally addressed through the civil lawsuits. However, in some cases, the misappropriation of trade secrets can rise to the level of a federal crime. The Economic Espionage Act of 1996 criminalizes trade secret theft committed for personal benefit within the country or for the benefit of a foreign government.

Section 1831 addresses foreign economic espionage and requires that the theft of a trade secret be done to benefit a foreign government, instrumentality, or agent.  The elements of the crime include:

  • The defendant intended or knew his actions would benefit a foreign government, foreign instrumentality, or foreign agent;
  • The defendant knowingly received, bought, or possessed a trade secret, knowing the same to have been stolen or appropriated, obtained, or converted without authorization; and
  • The item/information was, in fact, a trade secret.

Meanwhile, Section 1832 involves the misappropriation of a trade secret with the intent to convert the trade secret to the economic benefit of anyone other than the owner and to injure the owner of the trade secret. The elements of the crime include:

  • The defendant intended to convert a trade secret to the economic benefit of anyone other than the owner;
  • The defendant knowingly received, bought, or possessed a trade secret, knowing the same to have been stolen or appropriated, obtained, or converted without authorization;
  • The item/information was, in fact, a trade secret;
  • The defendant intended, or knew, the offense would injure the owner of the trade secret; and
  • The trade secret was related to or included in a product that is produced for or placed in interstate or foreign commerce.

Of course, prosecutors will not pursue every case that meets the above criteria. As detailed by the Department of Justice, U.S. Attorneys will evaluate evidence of involvement by foreign agents, the type of trade secret involved, the degree of economic injury, the effectiveness of civil remedies, and the potential deterrent value before deciding whether to bring a criminal action.

How Can I Help?

Protecting against trade secret misappropriation should not just be an important priority for the federal government, but for all businesses. To make sure you are protected, please contact me for a free 30 minute consultation by sending me an email or call TOLL FREE at 1-855-UR IDEAS (1-855-874-3327) and ask for Norman.

– Ex astris, scientia –

I am and avid amateur astronomer and intellectual property attorney.  As a former Chief Petty Officer in the U.S. Navy, I am a proud member of the Armed Service Committee of the Los Angeles County Bar Association working to aid all active duty and veterans in our communities.  Connect with me on Google +

Norman

2 thoughts on “When Does Trade Secret Theft Become a Federal Crime?

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