Amendments to the Economic Espionage Act Broaden Trade Secret Protection

by White & Case LLP
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Protecting and enforcing trade secrets in the United States has historically been challenging. Recent amendments to the Economic Espionage Act of 1996 (the "EEA"), which criminalizes theft of trade secrets, broaden the scope of prohibited conduct and enhance maximum penalties for offenders. The amendments signal an increased government interest in trade secret protection, which is likely in recognition of the important role trade secrets play in our nation’s economy. These amendments could rekindle discussions of establishing a private civil cause of action under the EEA in the near future, something the amendments did not create.

As originally drafted, the EEA criminalized two broad categories of trade secret theft: theft or misappropriation of trade secrets to benefit a foreign government, instrumentality, or agent (also referred to as "economic espionage") and theft or misappropriation of trade secrets "related to or included in a product that is produced for or placed in interstate or foreign commerce, to the economic benefit of anyone other than the owner" and with the intent to cause injury. The EEA also covers knowing possession, receipt, or purchase of stolen or misappropriated trade secrets falling into either category, as well as attempting or conspiring with others to commit a covered offense. Maximum penalties for violating the EEA, asoriginally drafted, range from a $500,000 fine and fifteen years imprisonment for individual offenders convicted of economic espionage, or a $10 million fine for corporate offenders, to a $250,000 fine coupled with ten years imprisonment for individual offenders, or a $5 million fine for corporate offenders, convicted of misappropriating trade secrets related to aproduct. The EEA also provides for forfeiture of any property or proceeds derived from the stolen or misappropriated trade secrets, as well as any property used or intended to be used to commit or facilitate such theft or misappropriation.

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