Economic Espionage Act of 1996

Texas common law and the Texas Theft Liability Act (TTLA) provide trade secret protection. Additionally, the Economic Espionage Act of 1996 (EEA) provides protection as well. The EEA provides a broader definition of what constitutes a “trade secret” and trade secret theft, effectively replacing the 1948 Trade Secrets Act, which was limited to prosecution of federal employees. The EEA also serves as a universal trade secret theft act.

According to the statute, “[u]ntil 1996 there was no federal statute that explicitly criminalized the theft of commercial trade secrets. . . .” The Act was created because federal prosecutors often struggled with protecting trade secrets through common law and the TTLA. In general, the Economic Espionage Act it criminalizes the theft of trade secrets.”

What are the elements of a violation of the Economic Espionage Act?

One must prove the following elements beyond a reasonable doubt under 18 U.S.C. Sections 1831 and 1832:

  • the defendant stole, or without authorization of the owner, obtained, destroyed, or conveyed information;

  • the defendant knew or believed that this information was a trade secret; and

  • the information was in fact a trade secret.

What is protectable as trade secrets under Economic Espionage Act?

The definition of “trade secret” is very broad. It includes any information which the owner has taken reasonable measures to keep secret and which has independent economic value. (18 U.S.C. 1839). This definition is generally broader than others, including that of  the Uniform Trade Secrets Act.

The owner of the trade secret must have taken reasonable measures to keep the information secret. Additionally, the owner of the secret must have obtained economic value from the information. The EEA does not apply to trade secrets discovered by parallel development or reverse engineering. Skills and knowledge that one acquires through lawful means while working are also not subject to prosecution under the EEA.

What constitutes theft of a trade secret?

Both the party who acquires the information and anyone who receives it are punishable under the EEA. For an individual to have committed trade secret theft, the individual must have taken, transmitted, or recorded in some form an article regarded to be a trade secret through deception or without authorization.  Also punishable are those individuals who, by breaking the EEA, are knowingly benefiting a foreign government or agent from a foreign country.

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