Tag Archives: tradesecret

Tougher Trade Secret Penalties.

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While trade secret theft is generally addressed through civil suits, criminal punishment is increasingly being used as a deterrent by the federal government.

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. Two recent amendments to the law will broaden the government’s ability to prosecute these cases and impose tougher penalties.

The Theft of Trade Secrets Clarification Act of 2012 clarifies the scope of the Economic Espionage Act of 1996 in light of U.S. v. Aleynikov, 676 F.3d 71 (2d Cir. 2012). In that case, the Second Circuit Court of Appeals overturned the criminal conviction of a programmer who stole the source code of his employer to establish a competing firm. The court held that the computer code failed to satisfy the statute’s requirement that the “product” was “produced for” or “placed in” interstate or foreign commerce. Under the amendment, which was signed into law by President Obama in December, the prohibition against the theft of trade secrets will now apply to a trade secret that is related to a product or service used in or intended for use in interstate or foreign commerce.

The Foreign and Economic Espionage Penalty Enhancement Act of 2012 will enhance the penalties for misappropriating trade secrets to benefit a foreign government. For individual offenders, the monetary limit for financial penalties would increase from $500,000 to $5,000,000. For corporations, it would increase from $10,000,000 to the greater of $10,000,000 or 3 times the value of the stolen trade secret to the organization, including expenses for research and design and other costs of reproducing the trade secret that the organization has thereby avoided. The legislation was passed by Congress and is now awaiting the President’s signature.

we encourage you to contact one of our experienced intellectual property attorneys for a free 30-minute consultation.

How Can I Help?

As these new laws highlight, it is imperative for businesses to carefully guard all proprietary information and make sure that all employees understand what constitutes a protected trade secret. For more information about how to best protect your trade secrets, contact me for a free 30 minute consultation at nvantreeck@usip.com 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 in Pasadena, California and I am a Rising Star as rated by Super Lawyers Magazine.  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

When Does Trade Secret Theft Become a Federal Crime?

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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

Picture Day!

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It had to happen sometime.  Today was the day that we are taking new photos for the firm’s web site.  I’ll post the new one once the photographer has photshopped me into greatness!  Well, maybe not greatness, just handsome like Tom Cruise, Ashton Kutcher, or Channing Tatum.  Personally, I don’t think there are enough presets in to world to make that happen.  So, to assist my makeover the lovely Renee Garafano from Glendale SalonSpa worked on me for what seemed like hours, but was actually only a couple of minute.  She is really good, so you might want to go to her spa for some special treatment.

And so it begins!

A nose job.

What have I gotten myself into!  Like Picasso preparing to paint, Renee prepares to apply…I don’t actually know what is being applied.

A break in the action while Renee refilled the make case.  I’m sure she didn’t expect to have to cover THIS much real estate.

Finishing touches, then: Lights, Camera, Action!

If you need help determining how best to protect your ideas, or know someone that can use my help (with or without makeup!), please contact me for a free 30 minute consultation at nvantreeck@usip.com or call TOLL FREE at 1-855-UR IDEAS (1-855-874-3327) and ask for Norman.

Listen if You Dare!

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You can find my very interesting radio show here at www.AdrenalineRadio.com and visit the Podcast – Now Playing section of the website.
Or if you prefer you can listen and download via iTunes at http://itunes.apple.com/us/podcast/adrenalineradio.com-weekly/id469932916

Be kind, this was our first time.  I don’t think we did too bad considering the subject matter.

Danton Mak, a partner at the firm and I did a one hour show this past week discussing intellectual property in general.  However, if you have an idea that needs protecting, please contact me for your free 30 minute consultation at nvantreeck@usip.com or call TOLL FREE at 1-855-UR IDEAS (1-855-874-3327) and ask for Norman.

How to Copyright Software

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Software code can be registered as a literary work with the copyright office. In fact, copyright registration often affords the best legal protection for your software program. That’s because copyright registration not only ensures that no one may copy, distribute, or display the software without your permission, but also allows you to pursue legal action against infringers. In some cases, software copyright registration is a relatively easy process. In fact, if your application is filed online, the source code may be uploaded electronically in PDF format. Otherwise, you will need to print out the code and submit it with your paper application.  I don’t recommend that you file paperwork with the copyright office.  They have made statement to the effect that it will be years before they look at any paper filed copyright applications.  Use electronic filing (its cheaper too).

Here  are a few additional considerations-

1.  Software Programs Without Trade Secrets:

You are required to submit one copy identifying portions of the program (generally the first 25 and
last 25 pages of source code), together with the page containing the copyright notice (you should have a copyright notice placed in the header and footer of ALL your code). For a program less than 50 pages in length, applicants should send the entire source code.

2.  Software Programs With Trade Secrets:

If the software program contains trade secrets, you must include a cover letter stating that the claim contains trade secrets, along with the page containing the copyright notice (see above).  You  must also submit one of the following:

• First 25 and last 25 pages of source code with portions containing trade secrets blocked out,

• First 10 and last 10 pages of source code alone, with no blocked out portions,

• First 25 and last 25 pages of object code plus any 10 or more consecutive pages of source code, with no blocked- out portions, or

• For programs 50 pages or less in length, entire source code with trade secret portions blocked out.

Special Concerns for Web-Based Software:

If the software is available, online, you must submit identifying material for the screen displays in addition to the required source code.  The identifying material for the screen displays should be images or printouts clearly showing the screens. If using online registration, images of the screens may be uploaded electronically to the Copyright Office.

Revised Software Programs (ie. Version 2.0 of your software):

Each separately published version of a software program that contains new, copyrightable authorship must be registered separately, with a new application and fee. Registration of the first version may extend to the entire work if it contains no previously published or registered portions. Registration of any subsequent version covers only the new or revised material added to that version.

In many cases, it is advisable to consult with an experienced copyright attorney before seeking to register your software program to ensure your rights are protected.  Please contact me to schedule your free 30-minute consultation by email at nvantreeck@usip.com or call TOLL FREE at 1-855-UR IDEAS (1-855-874-3327) and ask for Norman.

How To Protect Your Trade Secrets

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As you may have heard, one of the country’s most closely guarded trade secrets has changed locations. Coca-Cola has created a high security vault in Atlanta to house its “secret formula” for the popular soft drink.

Until this week, the only official written copy was allegedly kept under lock and key in a bank vault. According to the myth surrounding the trade secret, only two people at any given time are allowed to be privy to secret recipe. The same two people are prohibited from taking the same plane in the event it crashes, and the trade secrets are taken to the grave.

Of course, not all businesses can afford to go to such great lengths to protect their trade secrets. However, you should take reasonable steps to protect your confidential information.

Below are a few practices that all businesses can employ:

  • Have all employees, independent contractors, and temporary personnel execute confidentiality agreements. These agreements should define the term trade secrets, limit how employees can utilize trade secrets, and outline the legal repercussions if they breach the agreement.
  • Train employees, independent contractors, and temporary personnel about how to manage confidential information.
  • Clearly designate any information that the company considers confidential. This can be as easy as stamping “confidential and proprietary” on it.
  • Limit access to confidential information to a “need to know” basis. Use security measures such as locked file cabinets or password protection to prevent others from accessing it.
  • Require vendors, suppliers, and potential customers to sign non-disclosure agreements if they will encounter confidential and proprietary information.
  • Advise employees, independent contractors, and temporary personnel that any confidential information that they create on behalf of the company is the property of the company.
  • Take steps to ensure that all confidential information is returned or destroyed when employees, independent contractors, and temporary personnel terminate their relationship with the company.

Of course, these are only a few general tips. To ensure that your company’s trade secrets are thoroughly protected, it is a good idea to consult with an experienced intellectual property attorney.  If I can help you in any way, please contact me.