Other Charges to ConsiderIn the alternative, prosecutors may also consider the following charges as well:Conspiracy and aiding-and-abetting under 18 U.S.C. §§ 2, 371;Mail and wire fraud under 18 U.S.C. §§ 1341, 1343;Copyright infringement under 17 U.S.C. § 506 and 18 U.S.C. § 2319;Trafficking in counterfeit labels, illicit labels, or counterfeit documentation or packaging under 18 U.S.C. § 2318;Trafficking in misbranded food, drugs, and cosmetics under 21 U.S.C. §§ 331(a), 333, 343, 352, 362, and 841(a)(2); andTampering with consumer products under 18 U.S.C. § 1365.Theft of Commercial Trade SecretsI. GenerallyThe Economic Espionage Act (EEA), codified in 18 U.S.C. § 1831-1839, makes the theft or trafficking in trade secrets for foreign governments, instrumentalities, or agents a criminal act. The act was first introduced following the sudden rise in IP theft after the Cold War.

The Economic Espionage Act (EEA), codified in 18 U.S.C. § 1831-1839, makes the theft of or trafficking in trade secrets for foreign governments, instrumentalities, or agents a criminal act. Prior to passing the EEA, the Trade Secrets Act was the only federal statute that directly prohibited economic espionage.

This blog discusses the basic concepts surrounding the criminal theft of trade secrets.Trade Secrets and the Economic Espionage Act of 1996Criminal trade secret theft is defined in the Economic Espionage Act of 1996 (the “EEA”), 18 U.S.C. §§ 1831–37. See DOJML USAM 9-59.100.

Mar. 30, 2011). Before examining some of these efforts, this article provides a brief overview of the statutory framework of the EEA.Criminal Offenses Under the EEA The EEA is a far-reaching law that criminalizes two distinct but related types of trade secret misappropriation: “Economic espionage,” as defined by 18 U.S.C. § 1831, and “theft of trade secrets,” as defined by 18 U.S.C. § 1832. These offenses share three elements: (1) misappropriation of information; (2) with knowledge or belief that the information is a trade secret; and (3) that the information is, in fact, a trade secret.

[7] However, the Court went on to find that trade secret law provides weaker protection for inventions than the patent law and that the risk was insufficient to deny the states the right to provide for protection of trade secrets.[8] Federal Law Relating to Trade Secrets Federal trade secret protection is provided by The Economic Espionage Act of 1996 that is codified as 18 U.S.C. §§ 1831-1839. A trade secret is defined as: [A]ll 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— (A) the owner thereof has taken reasonable measures to keep such information secret; and (B) 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.

This article discusses federal prosecution of trade secret theft in the United States, including (a) what a victim should consider before requesting prosecution, and (b) information security practices that companies should adopt to discourage theft and to permit prosecution.I. The Economic Espionage Act The Economic Espionage Act (“Act”), 18 U.S.C. § 1831 et seq., was the first federal statute that specifically criminalized trade secret theft. The statute primarily prohibits two types of theft: “economic espionage,” theft for the benefit of a foreign government or agent, see 18 U.S.C. § 1831; and “theft of trade secrets,” more generally known as theft for pecuniary gain, see 18 U.S.C. § 1832.

8, Issue 1, Winter 2010, at 1, http://www.mbhb.com/ files/FirmService/e2dd2878-641d-44cd­8041-d4920608aa6e/Presentation/ ceSnippetIssue/Snippets%20Vol%208%20 Issue%201%20Online.pdf (providing an overview of basic trade secret law). 2 18 U.S.C. § 1831 (1996); Steven E. Feldman & Sherry L. Rollo, Extraterritorial Protection of Trade Secret Rights in China: Do Section 337 Actions at the ITC Really Prevent Trade Secret Theft Abroad?, 11 J. MarShall rev. intell.

This is evident in recently unsealed charges brought against a software engineer who stole source code from his United States employer to benefit a Chinese company with whom he had negotiated subsequent employment. These active efforts to obtain and distribute trade secrets are subject to enforcement of criminal violations under the Economic Espionage Act, 18 U.S.C. § 1831 et seq. (the Act) and other related statutes. Pursuant to the Act, trade secret theft can lead to civil actions, but also to criminal prosecutions.

See 18 U.S.C. § 1832. But given the stated purpose of the China Initiative, which is to “counter Chinese national security threats,” it is curious that DOJ is charging cases under this statute rather than under the Economic Espionage statute at 18 U.S.C. § 1831. The Economic Espionage statute carries more severe penalties than the theft of trade secrets statute.

Theft of trade secrets typically spurs civil actions against the offender, but theft of trade secrets can also be prosecuted criminally under the Economic Espionage Act, 18 U.S.C. § 1831 et seq. (the “Act”) and other related statutes. Several high-profile arrests, convictions, and indictments have come down in recent months highlighting the Department of Justice’s active enforcement in this area.