The Economic Espionage Act of 1996 (EEA)
Codified as 18 U.S.C. § 1831 et seq., and enacted with the aim of protecting trade secrets, the EAA provides for criminal sanctions such as prison time (up to a maximum of ten years), payment of restitution, penalties, and fines following instances of trade secret misappropriation. Punishable by imprisonment for up to a maximum of 10 years or fine, Section 1832 of the EAA (codified as 18 U.S.C. § 1832(a)) says explicitly that stealing a trade secret in order to benefit economically at the detriment of the owner knowingly or while intending to injure the trade secret’s owner after committing that offense is a crime.
Further, Section 1839 (codified as 18 U.S.C. § 1839(3)) specifies that provided the information provides the owner with independent economic value, potential or actual, for not being readily ascertainable through proper means by and not being generally known to the public and that reasonable measures have been taken to maintain the secrecy of such information, trade secrets entail all types and forms of engineering, economic, technical, scientific, business, or financial information. Notably, pursuant to 18 U.S.C. § 1836, the attorney general is permitted to secure injunctive relief in addition to the criminal penalties mentioned above.
One critical thing to note is that while the EEA provided no private right of action, employers could only make civil complaints concerning trade secret theft under state law before the DTSA (Defend Trade Secrets Act) was enacted. However, as discussed in a past blog, the DTSA created a private cause of action for trade secret misappropriation after it amended the EEA. This tool empowered employers to make civil claims under both state law and the DTSA against former employees suspected of misappropriating trade secrets. Nonetheless, since enabling such prosecution may help to deter future threats to trade secrets, employers might find it advisable, under certain circumstances, to notify and allow the involvement of the FBI, U.S. Department of Justice, and/or the attorney general in seeking criminal prosecution.
However, employers should consider the appropriateness of involving such high-level prosecutorial powers in particular cases before they can petition the government to help bring criminal charges against a former employee involved with trade secret misappropriation and/or theft. This is due to the likelihood of civil lawsuits falling by the wayside entirely or staying indefinitely during a government investigation’s pendency. Furthermore, it is the sole discretion of the prosecutor to decide and choose what evidence and acts are suitable for supporting the claims of the government. Additionally, in cases where courts may hesitate to limit the public from accessing court proceedings and/or documents, the disclosure of trade secrets may occur during such civil lawsuits.
In Part XI of this series, we will move the discussion forward by looking at the “Computer Fraud and Abuse Act (CFAA)” in detail and depth.
As usual, while you should strive to be #UnusuallyMotivated, stay tuned for more education, training, and legal guidance. In the interim, reach out to us with questions and/or comments on our website at the Contact Us page!
Always rising above the bar,
Isaac T.,
Legal Writer, Author, & Publisher.