Trade Secrets & Confidential Information

5. Trade Secret Protection in the U.S.A. - Criminal Liability

The Economic Espionage Act of 1996 criminalizes economic espionage and trade secret theft where the evidence shows any effect on interstate or foreign commerce. Parties engaged in the misappropriation of trade secrets can no longer be assured that liability will be limited to civil remedies. This Act is a benefit and a fright to businesses. While the threat of hefty fines and lengthy prison terms is a powerful weapon for trade secret owners to use to punish and deter others from stealing their secrets, it is a sword which can cut both ways. Businesses who wish to protect themselves from the risk of criminal prosecution under this Act will have to institute monitoring procedures to ensure that they are not receiving the trade secrets of others in the pursuit of daily business pursuits such as hiring employees, contractors or consultants or meeting with customers, suppliers, vendors or entering into business relationships.