When Does Trade Secret Theft Become a Federal Crime?

handcuffsTrade secret theft is generally addressed through 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.

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, contact us today by phone or email to schedule your free 30-minute consultation.

Leech Tishman’s Intellectual Property attorneys are dedicated to the protection and monetization of your ideas and innovations. Many of our registered patent attorneys have advanced degrees enabling him or her to truly understand the complex technical details of your idea.  Several bring engineering expertise, others molecular biology, manufacturing and business to your trademark, copyright, patent prosecution and litigation and trade secret issues, both domestic and international.
Our clients range from individual inventors, authors and owners of creative works to entrepreneurial enterprises, government entities, mid-sized corporations and Global 500 companies with operations throughout North and Central America, Europe, South Asia, the Far East and Australia.
We have serviced a vast array of industries including automotive, cosmetics, e-commerce, electronics, entertainment, fashion, food and beverage, furniture, internet, manufacturing, networks, optics, publishing, software, technology, toys, and wireless.
We are committed to providing you with strategic counseling and personal attention throughout the entire life cycle of your project.
We are proud of our longstanding relationships with local innovation communities and enjoy working with entrepreneurs and businesses who wish to protect their ideas and good names.
Please contact us today for a free consultation at (855) UR- IDEAS or (855) 874-3327.

Disclaimer: We fully comply with all laws related to attorney marketing and this posting is considered an advertisement.

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