California Trade Secret Crime Laws

If you are being charged with economic espionage or trade secret crime in California, you need a skilled attorney to handle your case.

There are fine distinctions between an employee’s personal expertise and an employer’s trade secrets.

Call Ginny Walia Law Offices now to to discuss your California trade secret litigation involving:

  • Scientific knowledge
  • Engineering knowledge
  • Software
  • Electronic data
  • Customer lists
  • Bidding information

What is a Trade Secret?

In general, a trade secret may consist of commercial or technical information that is used in a business and offers an advantage over competitors who do not know or use such information. The U.S. Economic Espionage Act of 1996, which became effective on January 1, 1997, makes theft or misappropriation of trade secrets a federal crime.

Theft of Trade Secrets Conviction

Conviction of the theft of trade secrets under the Economic Espionage Act can result in a fine of up to $250,000 for an individual (up to $5 million for corporations), imprisonment up to ten years, or both. If the crime is committed for the benefit of any foreign government, instrumentality, or agent, the penalties increase to fines of $500,000 (up to $10 million for an organization), imprisonment up to 15 years, or both.

Economic Espionage Act

The act defines a trade secret as all 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 the owner has taken reasonable measures to keep such information secret, and 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. The act defines owner as “the person or entity in whom or in which rightful legal or equitable title to, or license in, the trade secret is reposed.”

The statute contains two principal categories of crime, with the specific prohibited acts being identical. Under economic espionage, the statute states that,

“Whoever, intending or knowing that the offense will benefit any foreign government, foreign instrumentality, or foreign agent, knowingly

  1. steals or without authorization appropriates, takes, carries away, or conceals, or by fraud, artifice, or deception obtains a trade secret;
  2. without authorization copies, duplicates, sketches, draws, photographs, downloads, uploads, alters, destroys, photocopies, replicates, transmits, delivers, sends, mails, communicates, or conveys a trade secret;
  3. receives, buys, or possesses a trade secret, knowing the same to have been stolen or appropriated, obtained, or converted without authorization;
  4. attempts to commit any offense described in any of paragraphs (1) through (3);
    or
  5. conspires with one or more other persons to commit any offense described in any paragraphs (1) through (3), and one or more of such persons do any act to effect the object of the conspiracy shall be liable for the recited penalties.”

The section on theft of trade secrets begins with the preamble

“Whoever, with intent to convert a trade secret, that is related to or included in a product that is produced for or placed interstate or foreign commerce, to the economic benefit of anyone other than the owner thereof, and intending or knowing that the offense will, injure any owner of that trade secret, knowingly . . . performs any of the acts set forth in numbered (1)¬(5) recited hereinabove shall be liable for the recited penalties.”

In addition, the act calls for criminal forfeiture and states that the court, in imposing sentence on a person for a violation shall, in addition to any other sentence, order that the person shall forfeit to the United States any property constituting, or derived from, any proceeds the person obtained, directly or indirectly, as a result of the violation and any of the person’s property used or intended to be used, in any manner or part, to commit or facilitate the commission of such violation, if the court so determines, taking into consideration the nature, scope, and proportionality of the use of the property in the offense.