#Espionage act update

They also frequently do not have the investigative resources to pursue a case. In addition, companies often do not have the resources or the time to bring suit. Many companies choose to forgo civil suits because the thief is essentially judgment proof - a young engineer who has few resources - or too difficult to pursue - a sophisticated foreign company or government.

These civil remedies, however, often are insufficient. The majority of States have some form of civil remedy for the theft of such information - either adopting some version of the Uniform Trade Secrets Act, acknowledging a tort for the misappropriation of the information, or enforcing various contractual arrangements dealing with trade secrets. As concluded by the Senate Judiciary Committee: 'What State law there is protects proprietary economic information only haphazardly. State laws protecting trade secrets were likewise determined to be inadequate. Similarly, the Mail Fraud statute would only apply to economic espionage involving the use of the mail, and the Fraud by Wire statute requires an intent to defraud as well as the use of wire, radio or television. With respect to point (2) - i.e., the inadequacy of then-existing Federal statutes - Director Freeh cited the Supreme Court's Dowling ruling that trade secrets did not constitute physical 'goods, wares or merchandise,' and that the 1930's Interstate Transportation of Stolen Property Act was not applicable to economic espionage. Those targeted covered the entire spectrum of successful U.S. With respect to point (1), Director Freeh reported that the FBI was then investigating allegations of economic espionage conducted against the United States by no less than 23 different countries. (2) Laws then on the books - including the Interstate Transportation of Stolen Property Act and the Mail Fraud and Fraud by Wire statutes - were of virtually no use in prosecuting acts of economic espionage. Government for the economic benefit of their own industrial sectors. The hearings amply documented the two major underpinnings of the legislation: (1) Foreign powers, through a variety of means, are actively involved in stealing critical technologies, data and information from U.S. The organized intellectual property bar did not play a role in the hearings themselves although, since the 1970's, the American Bar Association Section of Intellectual Property Law favored 'the enactment of a federal criminal law applicable in appropriate circumstances to the misappropriation of trade secrets.' He was supported in his conviction that new Federal legislation was needed by a number of industry leaders representing principally Silicon Valley and aerospace companies. Freeh, Director of the Federal Bureau of Investigation ('FBI'). The lead witness in both hearings was the Honorable Louis J. Two major hearings were held in 1996 to consider the need for Federal legislation to prevent the theft of trade secrets as a result of economic espionage.

#Espionage act update

This article will briefly review the legislative history of the EEA, compare its provisions with existing, more traditional, protection of trade secrets, discuss the criminal law aspects of the EEA, and provide an update on the cases that have been brought to date under the EEA.ĮCONOMIC ESPIONAGE AND THE NEED FOR FEDERAL LEGISLATION With fines up to $5,000,000 and imprisonment of up to 10 years for the domestic theft of trade secrets, the EEA provides a new and very powerful intellectual property regime that extends well beyond the U.S.

It applies as well to any typical trade secret dispute involving purely domestic concerns.

However, the EEA is not limited to enforcement against foreign governments, or even foreign-based companies. companies, particularly in the high-tech and computer industries, in order to advance the economic interests of their private sector. The overriding reasons behind the enactment of the legislation were the fully documented efforts of foreign governments to gain access to the trade secrets of U.S. With the enactment in 1996 of the Economic Espionage Act ('EEA'), the Federal Government has moved aggressively into the protection of private property rights in trade secrets. FEDERAL PROTECTION FOR CORPORATE TRADE SECRETSīy J.