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Articles

Calling the Cops: The decision to refer trade secret theft for criminal investigation (part one)

March 4, 2014

Articles

Calling the Cops: The decision to refer trade secret theft for criminal investigation (part one)

March 4, 2014

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A bad guy steals something, and the victim calls the cops. The same is true when someone unwittingly ends up with stolen property. Once they figure out that the stuff is hot, they know they should call the cops. These are basic concepts, but when the thing stolen is that particularly fragile sort of asset known as a trade secret, and civil remedies are also in play, the analysis is more complex.

When it comes to trade secrets, the cops—i.e., the Department of Justice and its United States Attorneys—are now well armed to punish theft. With an amendment passed on December 28, 2012, section 1832 of the Economic Espionage Act of 1996 (the “EAA”) was expanded to cover theft of trade secrets related to services and internal processes. With this important change and the statute’s significant existing penalties (for individual offenders, up to ten years in prison and up to the greater of $250,000 or twice the value of the stolen trade secret; for corporate offenders, up to a $5,000,000 fine), the EAA presents a significant tool for combatting commercial trade secret misappropriation. But the question remains: When should one refer trade secret theft to the federal government for investigation of potential section 1832 violations? That is, when is it a good idea to call the cops? Find out on Fish’s Litigation Blog.

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