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Stealing a trade secret is a federal crime when the information relates to a product in interstate or foreign commerce, 18 U.S.C. 1832 (theft of trade secrets), or when the intended beneficiary is a foreign power, 18 U.S.C. 1831 (economic espionage). Section 1832 requires that the thief be aware that the misappropriation will injure the secret's owner to the benefit of someone else. Section 1831 requires only that the thief intend to benefit a foreign government or one of its instrumentalities.
Section 1832 (theft) violations are punishable by imprisonment for not more than 10 years, or a fine of not more than $250,000 (not more than $5 million for organizations), or both. Section 1831 (espionage) violations by individuals are punishable by imprisonment for not more than 15 years, or a fine of the greater of not more than $5 million, or both. Section 1831 violations by organizations are punishable by a fine of not more than the greater of $10 million or three times the value of the stolen trade secret. Maximum fines for both individuals and organizations may be higher when the amount of the gain or loss associated with the offense is substantial. Any attempt or conspiracy to commit either offense carries the same penalties as the underlying crime. Offenders must also be ordered toOffenders face lengthy prison terms as well as heavy fines, and they must pay restitution. Moreover, property derived from the offense or used to facilitate its commission is subject to confiscation. The sections reach violations occurring overseas, if the offender is a United States national or if an act in furtherance of the crime is committed within the United States.
Depending on the circumstances, misconduct captured in the two sections may be prosecuted under other federal statutes as well. A defendant charged with stealing trade secrets is often indictable under the Computer Fraud and Abuse Act, the National Stolen Property Act, and/or the federal wire fraud statute. One indicted on economic espionage charges may often be charged with acting as an unregistered foreign agent and on occasion with disclosing classified information or under the general espionage statutes.
P.L. 112-269 set the maximum fines described above. It also instructed the United States Sentencing Commission to examine the sufficiency of federal sentencing guidelines and policies in the area of stealing trade secrets and economic espionage. P.L. 112-236 amended the trade secrets prohibition of 18 U.S.C. 1832 to overcome the implications of the Court of Appeals' Aleynikov decision. That decision held that the section did not outlaw the theft of computer code designed to facilitate a company's commercial transactions, because the code did not relate to a product to be placed in the stream of commerce Finally, by virtue of the Defend Trade Secrets Act (P.L. 114-153), Section 1831 and 1832 are predicate offenses for purposes of the federal racketeering and money laundering statutes.
P.L. 114-153 (S. 1890) dramatically increased EEA civil enforcement options when it authorized private causes of action for the victims of trade secret misappropriation. In addition, the EEA now permits pre-trial seizure orders in some circumstances, counterbalanced with sanctions for erroneous seizures.
This report is available in an abridged version, without footnotes or attribution, as CRS Report R42682, Stealing Trade Secrets and Economic Espionage: An Abridged Overview of 18 U.S.C. 1831 and 1832.
The Economic Espionage Act (EEA) outlaws two forms of trade secret theft: theft for the benefit of a foreign entity (economic espionage) and theft for pecuniary gain (theft of trade secrets).1 Under either proscription, its reach extends to theft from electronic storage.2 Offenders face imprisonment for not more than 10 years in the case of trade secret theft and not more than 15 years in the case of economic espionage.3 Individuals may incur fines of not more than the greater ofIndividual offenders face imprisonment for up to 15 years for economic espionage and up to 10 years for trade secret theft.3 Individuals also may incur fines of up to $250,000 or twice the loss or gain associated with the offense for trade secret theft and for economic espionage not more than the greater of.4 For economic espionage, they face fines of up $5 million or twice the loss or gain.45 Organizations are fined more severely, up to the greater of. They can be fined up $5 million or twice the gain or loss for trade secret theft, and for economic espionage up to a fine, twice the loss or gain associated with the offense, or three times the value of the stolen trade secret, for trade secret theft.6 For economic espionage, the fines of organizations jump to a maximum of the greater of $10 million, three times the value of the trade secret, or twice the gain or loss associated with the offense.5
A court may assess the same sanctions for attempt or conspiracy to commit either offense, or for aiding or abetting the completed commission of the either offense.8.6 A sentencing court must order the defendants to pay victim restitution, and the government may confiscate any property that is derived from or used to facilitate either offense.79 The government may seek to enjoin violations, but the EEA creates no explicit private cause of action.8 10 and, by virtue of amendments in the Defend Trade Secrets Act of 2016,11 victims may be entitled to sue for double damages, equitable relief, and attorneys' fees.12
Conduct that violates the EEA's proscriptions may also violate other federal prohibitions, however. Some, like the Computer Fraud and Abuse Act, in addition to imposing criminal penalties, dolikewise authorize victims to sue for damages and other forms of relief under some circumstances.9
The trade secrets prohibition is the more complicated of the EAA's two criminal offenses. It condemns:
I.
(1) Whoever
(2) with intent to convert
(3) a trade secret
(4) related to
(5) a product or service
(6)(a) used in or
(b) intended for use in
(7)(a) interstate commerce or
(b) foreign commerce
(8) to the economic benefit of anyone other than the owner thereof
(9) (a) intending or
(b) knowing
(10) that the offense will injure the owner of that trade secret
(11) knowingly
(12)(a) steals, without authorization appropriates, takes, carries away, conceals, or by fraud, artifice, or deception obtains such information,
(b) without authorization copies, duplicates, sketches, draws, photographs, downloads, uploads, alters, destroys, photocopies, replicates, transmits, delivers, sends, mails, communicates, or conveys such information; [or]
(c) (i) receives, buys, or possesses such information,
(ii) knowing the same to have been stolen or appropriated, obtained, or converted without authorization;
or
II.
(1) Whoever
(2) attempts [to do so];
or
III.
(1) Whoever
(2) conspires with one or more other persons to [do so], and
(3) one or more of such persons do any act to effect the object of the conspiracy.10
The term "whoever" encompasses both individuals and organizations. Thus, individuals and organizations may be guilty of the theft of trade secrets. Subsection 1832(b) confirms this intent by establishing a special fine for "organizations" who commit the offense. For purposes of the federal criminal code, an "organization" is any "person other than an individual."1115 The Dictionary Act supplies examples of the type of entities that may qualify as "persons"—"the words 'person' and 'whoever' include corporations, companies, associations, firms, partnerships, societies, and joint stock companies, as well as individuals."12
Conversion is a common law concept which is defined as "[t]he wrongful possession or disposition of another's property as if it were one's own; an act or series of acts of willful interference, without lawful justification, with any chattelitem of property in a manner inconsistent with another's right, whereby that other person is deprived of the use and possession of the chattel."13property."17 This "intent to steal" element, coupled with the subsequent knowledge and "intent to injure" elements, would seem to ensure that a person will not be convicted of theft for the merely inadvertent or otherwise innocent acquisition of a trade secret.
An EEA trade secret is any information that "(A) the owner thereof has taken reasonable measures to keep such information secret; and (B) ... derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, the public."1418 An owner for these purposes is one "in whom or in which rightful legal or equitable title to, or license in, the trade secret is reposed."15
Whether an owner has taken reasonable measures to ensure the secrecy of his trade information will depend upon the circumstances of the case. Such measures would ordinarily include limiting access to the information and notifying employees of its confidential nature.1620 Inclusion within the definition of "trade secret" of the instruction that the owner take "reasonable measures" to secure the confidentiality of the information does not render the statute unconstitutionally vague as applied to a defendant whose conduct clearly falls withwithin the statute's proscription.17
Construction of the "known or readily ascertainable" element of the secrecy definition is more perplexing. On its face, the EEA suggests that information is secret if it is unknown or undiscoverable by the general public, even if it might be known or discoverable within the industry in which the information is relevant. Congress, however, may have intended a more narrow interpretation of "secret," that is, the information is secret only if it is not known to or reasonably ascertainable either by the general public or within the industry in which the information has value.
The EEA's definition of "trade secret" is "based largely on the definition of that term in the Uniform Trade Secrets Act."1822 The EEA definition refersinitially referred to information known to or readily ascertainable by the "public."1923 The Uniform Trade Secrets Act (UTSA) definition, however, refers not to the public but to information known to or readily ascertainable by "other persons who can obtain economic value from its disclosure or use."20 Speaking in the context of an owner's protective measures, the legislative history indicates that "[s]ecrecy in this context means that the information was not generally known to the public or to the business, scientific, or educational community in which the owner might seek to use the information."21 The question thus far appears to have divided the lower federal appellate courts.22
The trade secret must have an interstate or foreign commerce nexus. More specifically, it must be one "that is related to a product or service used in or intended for use in" such commerce.2326 Congress settled upon this phrase after an appellate court held that earlier language covered only theft of a trade secret related to a product that was, or was intended to be, sold or otherwise placed in the stream of commerce.2427
Someone other than the trade secret's owner must be the intended beneficiary of the theft or destruction.2528 The thief may be, but need not be, the intended beneficiary.2629 Moreover, a close reading of the statute argues for the proposition that no economic benefit need actually accrue; economic benefit need only be intended. Yet if no economic benefit is intended, there is no violation.27
The government must prove that the defendant intended to injure the trade secret's owner or that he knew the owner would be injured.2831 However, it need not show actual injury.32 The section "does not require the government to prove malice or evil intent, but merely that the actor knew or was aware to a practical certainty that his conduct would cause some disadvantage to the rightful owner."2933 Again, the element addresses the defendant's state of mind, not reality. Nothing in the statute's language demands that the government prove actual injury.30
The last of the section's three mens rea requirements demands that the defendant be aware that he is stealing, downloading, or receiving a stolen trade secret. There is some dispute over whether this requires the prosecution to prove that the defendant knew that he was stealing, downloading, or receiving proprietary information or that he knew that he was stealing, downloading, or receiving a trade secret. The Justice Department has used the section's legislative history to reinforce its understanding of this feature of the section:
As outlined above, the first part of the mens rea requirement in an EEA case is that the defendant misappropriated the trade secret "knowingly." As noted in the legislative history, "A knowing state of mind with respect to an element of the offense is (1) an awareness of the nature of one's conduct, and (2) an awareness of or a firm belief in or knowledge to a substantial certainty of the existence of a relevant circumstance, such as whether the information is proprietary economic information as defined by this statute." S. Rep. No. 104-359, at 16 (1996).
Based upon the legislative history, the government is not required to prove that the defendant knew and understood the statutory definition of a trade secret, as set forth in 18 U.S.C. § 1839(3), before acting. If the government had to prove this, the EEA would be unnecessarily narrowed in its application, which is contrary to the intent of Congress. Some violations would be nearly impossible to prosecute in a number of factual scenarios, and would amount to a willfulness mens rea requirement equivalent to that imposed for criminal copyright infringement. For example, as part of protecting and limiting a trade secret to those on a need to know basis, some companies do not divulge all of the reasonable measures used to protect the trade secret, even within the company. The individual stealing a trade secret may not know about these reasonable measures safeguarding the trade secret.
The legislative history is clear that Congress intended to extend the reach of the new federal offenses involving trade secret misappropriation. In fact, the legislative history supports a "knew or should have known" mens rea requirement:
It is not necessary that the government prove that the defendant knew his or her actions were illegal, rather the government must prove that the defendant's actions were not authorized by the nature of his or her relationship to the owner of the property and that the defendant knew or should have known that fact.
H.R. Rep. No. 104-788, at 12 (1996), reprinted in 1996 U.S.C.C.A.N. 4021, 4030-31 (emphasis added); 142 Cong. Rec. 27,117 (1996) (government must show the defendant was "aware or substantially certain" he was misappropriating a trade secret); see also United States v. Genovese, 409 F. Supp. 2d 253, 258 (S.D.N.Y. 2005) (discussing circumstances that would indicate that EEA defendant knew the information was proprietary).
Congress did not require the government to show that the defendant specifically was aware of each element of the definition of a trade secret under § 1839(3) (e.g., that the defendant knew of specific reasonable measures employed by the trade secret owner to protect the trade secret). An opportunistic defendant, such as a company outsider, may not be fully aware of all of the company measures used to safeguard a trade secret, but does know the proprietary information has value which he intends to use to injure the owner of the trade secret. In other words, the defendant knowingly misappropriated property (or proprietary information) belonging to someone else without permission. In fact, in recognizing this point, the Sixth Circuit has held that the "defendant need not have been aware of the particular security measures taken by [the trade secret owner]. Regardless of his knowledge of those specific measures, defendant knew the information was proprietary." Krumrei, 258 F.3d at 539 (affirming denial of motion to dismiss indictment as void for vagueness); see also United States v. Roberts, No. 3:08-CR-175, 2009 WL 5449224, at *7 (E.D. Tenn. Nov. 17, 2009) (holding that "a defendant must know that the information he or she seeks to steal is proprietary, meaning belonging to someone else who has an exclusive right to it, but does not have to know that it meets the statutory definition of a trade secret"), report and recommendation adopted by, 2010 WL 56085 (E.D. Tenn. Jan. 5, 2010) (quoting H.R. Rep. No. 104-788, at 12 (1996)).3135
The courts have not always agreed. Some insist that the prosecution show that the defendant knew the information "had the general attributes of a trade secret."3236
A person may be guilty of the theft of a trade secret only if he "knowingly" steals a trade secret, replicates a trade secret, destroys or alters a trade secret, or receives a stolen trade secret. Each of the alternative means of deprivation is cast in a separate subsection. The first subsection covers not only stealing a trade secret, but also concealing it or acquiring it by fraud.3337
Trade secrets are information and thus can be simultaneously held by an owner and a thief. As a result, the second subsection covers situations where the owner is not necessarily deprived of the information, but is denied control over access to it. It proscribes unauthorized copying, downloading, uploading, or otherwise conveying the information. It also outlaws alteration or destruction of a trade secret.3438 The Justice Department has argued that this second means of misappropriation includes instances where a faithless employee, former employee, or cyber intruder commits the trade secret to memory and subsequently acts in manner necessary to satisfy the other elements of the offense.3539 It makes the point with some trepidation, however:
This is not to say, however, that any piece of business information that can be memorized is a trade secret. As noted, the EEA does not apply to individuals who seek to capitalize on their lawfully developed knowledge, skill, or abilities. When the actions of a former employee are unclear and evidence of theft has not been discovered, it may be advisable for a company to pursue its civil remedies and make another criminal referral if additional evidence of theft is developed. Where available, tangible evidence of theft or copying is helpful in all cases to overcome the potential problem of prosecuting the defendant's "mental recollections" and a defense that "great minds think alike."36
The third subsection outlaws the knowing receipt of stolen trade secret information.3741 Conviction requires proof that a trade secret was stolen or converted in violation of one of the other subsections and that the defendant knew it.38
Defendants who attempt to steal a trade secret face the same penalties as those who succeed.3943 Attempt consists of intent to commit the offense and a substantial step towardstoward the attainment of that goal.4044 This would indicate that the information which the defendant seeks to steal need not be a trade secret, as long as he believes it is.41
Defendants who conspire to steal a trade secret also face the same penalties as those who commit the substantive offense.4246 "In order to find a defendant guilty of conspiracy, the prosecution must prove. ... that the defendant possessed both the intent to agree and the intent to commit the substantive offense. In addition, the government must prove that at least one conspirator committed an overt act, that is, took an affirmative step toward achieving the conspiracy's purpose."4347 It is no defense that circumstances, unbeknownst to conspirators, render success of the scheme unattainable, as for example when the defendants plotted to steal information that was not in fact a trade secret.44
Individual offenders face imprisonment for up to 10 years and fines of up to $250,000.4549 The court may fine an organization up to $5 million upon conviction.4650 Both individuals and organizations face a higher maximum fine if twice the gain or loss associated with the offense exceeds the statutory maximum (i.e., $250,000/$5 million).4751 A sentencing court must also order the defendant to pay restitution to the victims of the offense.4852 Property derived from, or used to facilitate, commission of the offense may be subject to confiscation under either civil or criminal forfeiture procedures.4953 The Attorney General may sue for injunctive relief, but there is no explicit private cause of action.50
The EEA's economic espionage and theft of trade secret offenses share many of the same elements.5157 There are four principal differences. The theft of a trade secret must involve the intent to benefit someone other than the owner.5258 It must involve an intent to injure the owner.5359 And, it must involve a trade secret "that is related to or included in a product that is produced for or placed in interstate or foreign commerce."5460 Economic espionage, on the other hand, must involve an intent to benefit a foreign entity or at least involve the knowledge that the offense will have that result.5561 It does not require an intent to injure the owner.5662 And, it applies to any trade secret, notwithstanding the absence of any connection to interstate or foreign commerce.5763 Finally, economic espionage is punished more severely. The maximum term of imprisonment is 15 years rather than 10 years, and the maximum fine for individuals is $5 million rather than $250,000.5864 For organizations, the maximum fine is the greater of $10 million or three times the value of the trade secret rather than $5 million.5965 As in the case of stealing trade secrets, the maximum permissible fine may be higher if twice the amount of the gain or loss associated with the offense exceeds the otherwise applicable statutory maximum.6066 And the crime is likewise a RICO and, consequently, a money laundering predicate offense.67
Section 1831 condemns:
I.
(1) Whoever
(2) intending or knowing the offense will benefit
(3) (a) a foreign government,
(b) a foreign instrumentality, or
(c) a foreign agent
(4) knowingly
(5)(a) steals, without authorization appropriates, takes, carries away, conceals, or by fraud, artifice, or deception obtains a trade secret,
(b) without authorization copies, duplicates, sketches, draws, photographs, downloads, uploads, alters, destroys, photocopies, replicates, transmits, delivers, sends, mails, communicates, or conveys a trade secret; [or]
(c) (i) receives, buys, or possesses a trade secret,
(ii) knowing the same to have been stolen or appropriated, obtained, or converted without authorization;
or
II.
(1) Whoever
(2) attempts [to do so];
or
III.
(1) Whoever
(2) conspires with one or more other persons to [do so], and
(3) one or more of such persons do any act to effect the object of the conspiracy.61
A casual reader might conclude that any foreign entity would satisfy Section 1831's foreign beneficiary element.6269 Section 1839's definition of foreign agent and foreign instrumentality, however, makes it clear that an entity can only qualify if it has a substantial connection to a foreign government. The definition of foreign instrumentality refers to foreign governmental control or domination.6370 The description of a foreign agent leaves no doubt that the individual or entity must be the agent of a foreign government.64
The theft of a trade secret demands an intent to confer an economic benefit.6572 Economic espionage is not so confined. Here, "benefit means not only economic benefit but also reputational, strategic, or tactical benefit."6673 Moreover, unlike the theft offense, economic espionage may occur whether the defendant intends the benefit or is merely aware that it will follow as a consequence of his action.6774 As in the case of trade secret theft, however, the benefit need not be realized; it is enough that defendant intended to confer it.68
It would be self-defeating to disclose a victim's trade secrets in the course of the prosecution of a thief. Consequently, the EEA authorizes the trial court to issue orders to protect the confidentiality of trade secrets during the course of a prosecution and permits the government to appeal its failure to do so.6976 The government may not appeal an order to reveal information it has already disclosed to the defendant.7077 Nevertheless, in such instances, appellate review of a district court's disclosure order may be available through a writ of mandamus.71
The Supreme Court has said on a number of occasions that "[i]t is a longstanding principle of American law 'that legislation of Congress, unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of the United States.'"79'"72 With this in mind, Congress specifically identified the circumstances under which it intended the economic espionage and theft of trade secrets provisions to apply overseas.7380 Either offense may be prosecuted as long as the offender is a U.S. national or an act in furtherance of the offense is committed within this country.74
The legislative history indicates that these are the only circumstances under which violations abroad may be prosecuted.7582 This may mean that foreign conspirators may not be charged unless some overt act in furtherance of the scheme occurs in the United States.7683 It may also preclude prosecution when trial would have been possible in the absence of an express provision. For example, in the absence of the limiting provision, the courts would likely conclude that Congress intended to allow prosecution of overseas offenses of foreign nationals that have an impact within the United States.77
For five years after passage of the Economic Espionage Act, neither economic espionage nor trade secret violations of its provisions could be prosecuted without the approval of senior Justice Department officials. Prosecutors must still secure approval before bringing charges of economic espionage, but approval is no longer necessary for the prosecution of theft of trade secret charges.78
Conduct that violates the Economic Espionage Act may violate other federal criminal provisions as well. In the case of trade secret offenses, potentially corresponding offenses include violations of the Computer Fraud and Abuse Act, the National Stolen Property Act, and the federal wire fraud statute. The Computer Fraud and Abuse Act outlaws accessing certain computers or computer systems without authorization or in excess of authorization, with the intent to defraud.7986 The National Stolen Property Act outlaws the interstate transportation of tangible stolen property or the knowing receipt of such property.8087 The federal wire fraud statute outlaws the use of wire communications in execution of a scheme to defraud.81
In addition, in the case of economic espionage violations, a defendant may be subject to prosecution under the general espionage statutes, the espionage component of the computer fraud statute, or for failure to register as the agent of a foreign power. Foreign agents, other than diplomatic personnel, must register with the Attorney General; failure to do so is generally a felony.8289 The Computer Fraud and Abuse Act outlaws computer intrusions launched for espionage purposes.8390 The general espionage laws are only likely to be triggered if the trade secret information is also classified information or is national defense information.84
Congress amended the EEA twice during the 112th Congress. The Theft of Trade Secrets Clarification Act of 2012 clarified the trade secrets jurisdiction element.85 The Foreign and Economic Espionage Act of 2012 increased the maximum fine levels for economic espionage.86 It also directed the United States Sentencing Commission to reexamine its treatment of economic espionage and the overseas transmission of stolen trade secrets.87
On November 27, 2012, Senator Leahy introduced, and the Senate passed by unanimous consent, the Theft of Trade Secrets Clarification Act (S. 3642).88 The proposal reworded the jurisdictional element of the trade secret provision to cover secrets relating to products or services used or intended for use in interstate or foreign commerce. Senator Leahy explained that:
A recent decision of the Second Circuit in United States v. Aleynikov casts doubt on the reach of the statute. A jury in that case found the defendant guilty of stealing computer code from his employer. The court overturned the conviction, holding among other thing that the trade secret did not meet the interstate commerce prong of the statute, even though the defendant had copied the stolen code from his office in New York to a server in Germany; downloaded the code to his home computer in New Jersey; then flew to his new job in Illinois with the stolen source code in his possession; and the code was used in interstate commerce.
The court held that the Economic Espionage Act provision applies only to trade secrets that are part of a product that is produced to be placed in interstate commerce. Because the company's proprietary software was neither placed in interstate commerce nor produced to be placed in interstate commerce, the law did not apply – even though the stolen source code was part of the financial trading system that was used in interstate commerce every day.89
The House passed the measure shortly thereafter under suspension of the rules,90 and the President signed it into law on December 28, 2012.91
On August 1, 2012, the House passed the Foreign and Economic Espionage Penalty Enhancement Act of 2012 (H.R. 6029), under suspension of the rules.92 The Senate Judiciary Committee had previously reported favorably a similar proposal as the Economic Espionage Penalty Enhancement Act (S. 678).93 Unlike the Senate bill, the House legislation would have increased the penalties for violations of 18 U.S.C. 1831 (economic espionage). Under the House-passed proposal the maximum term of imprisonment would have increased from not more than 15 years to not more than 20 years.94 Section 1831 previously punished individual defendants with a fine of not more than the greater of $500,000 or twice the loss or gain associated with the offense and punished organizational defendants with a fine of not more than the greater of $10 million or twice the loss or gain.95 The House bill would have amended it to permit a fine for an offending individual of not more than the greater of $5 million or twice the loss or gain and to permit a fine for an offending organization of not more than the greater of $10 million, three times the value of the stolen trade secret, or twice the gain or loss associated with the offense.96
Neither proposal would have changed the maximum terms of imprisonment (not more than 10 years) or the maximum fines for trade secret violations ($250,000 for individuals; $5 million for organizations).97 Both would have instructed the United States Sentencing Commission to reexamine the treatment of economic espionage and overseas transmission of stolen trade secrets under the Commission's sentencing guidelines.
The legislation is a reaction to reports of increased foreign predatory action and of "sensitive US economic information and technology ... targeted by the intelligence services, private sector companies, academic and research institutions, and citizens of dozens of countries."98
The Senate agreed to the House-passed proposal, but not before removing the provision that would have increased the length of the maximum prison term.99 The House agreed to the Senate amendment under suspension of the rules.100 The President signed the proposal on January 14, 2013.101
| 1. |
18 U.S.C. 1831 and 18 U.S.C. 1832, respectively. |
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| 2. |
"Whoever ... without authorization ... downloads, uploads ... transmits ... or conveys such [trade secret] information.... " 18 U.S.C. 1831(a)(2), 1832(a)(2). |
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| 3. |
18 U.S.C. 1832(a), 1831(a). |
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| 4. | The EEA now provides that "[a]n owner of a trade secret that is misappropriated may bring a civil action under this subsection if the trade secret is related to a product or service used in, or intended for use in, interstate or foreign commerce."94 Not just anyone who suffers damage as the result of trade secret misappropriation; "owners" may sue. EEA, however, defines the term "owners" to include licensees.95 The trade secrets protected by civil suit are the same as those protected by the criminal proscriptions.96 The definition of the action that gives rise to liability – "misappropriation" – is taken from the Uniform Trade Secrets Act.97 The term encompasses acquiring, disclosing, or using a trade secret taken from its owner by scurrilous ("improper") means.98 Perhaps EEA's most distinctive feature is its pre-trial seizure procedure. It allows an owner who alleges that his trade secret has been appropriated to apply to the court for an ex parte order seizing the purported trade secret.99 The procedure is replete with restrictions on its use, some reminiscent of the limitations on a temporary restraining order (TRO) in federal civil actions: inadequacy of alternatives; a threat of immediate and irreparable harm; a likelihood of success on the merits; and a favorable balance of harms.100 Yet, the procedure is confined to instances where a TRO is insufficient.101 "The ex parte seizure provision is expected to be used in instances in which a defendant is seeking to flee the country or planning to disclose the trade secret to a third party immediately or is otherwise not amendable to the enforcement of the court's orders."102 The party from whom the trade secret is seized is entitled to a hearing within seven days, at which the owner of the trade secret bears the burden justifying the seizure order.103 Anyone injured by a "wrongful or excessive" seizure may sue for the relief described in the Trademark Act;104 that is, for "damages for lost profits, cost of materials, loss of good will, and punitive damages in instances where the seizure was sought in bad faith, and, unless the court finds extenuating circumstances, to recover a reasonable attorney's fee," and, in the discretion of the court, prejudgment interest.105 Relying heavily on the UTSA, EEA empowers district courts to award an aggrieved owner equitable relief;106 damages;107 and in case of willful and malicious misappropriation, double damages and attorneys' fees.108 The court may also award attorneys' fees to a party who prevails against a bad faith claim of misappropriation.109 An action for the misappropriation must be brought within three years of when it is discovered or would have been discovered with the exercise of reasonable diligence.110 Section 1837 states that the chapter 90 applies to conduct occurring outside the United States if "the offender" is a U.S. national or an act in furtherance of the offense is committed within the United States. Section 1836 is found in chapter 90. It would therefore appear that Section 1836 applies to conduct occurring outside the United States if the offender is a U.S. national or an act in furtherance of the offense is committed within the United States. In the absence of a Section 1837-like statement of congressional intent, the Supreme Court has shown a great reluctance to recognize private causes of action based on conduct abroad.111 Whether the concerns evidenced there influence future extraterritorial application of Section 1836's civil remedies remains to be seen. Author Contact Information 18 U.S.C. §1831 (economic espionage) and 18 U.S.C. §1832 (theft of trade secrets). "Whoever ... without authorization ... downloads, uploads ... transmits ... or conveys such [trade secret] information," 18 U.S.C. §§1831(a)(2), 1832(a)(2)(same). 18 U.S.C. §§1832(a), 1831(a). 18 U.S.C. §§1831(a), 3571(d). |
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|
18 U.S.C. |
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18 U.S.C. §§1831(a)(4)(attempt), (5)(conspiracy) |
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18 U.S.C. |
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|
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18 U.S.C. §1836. 11.
|
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P.L. 114-153, §2, 130 Stat. 376 (2016). |
18 U.S.C. §1836. |
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E.g., 18 U.S.C. §§1030(g)(computer fraud and abuse), 2520(interception of electronic communications), 2707 (unauthorized access to an electronic communications facility). |
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18 U.S.C. §1832; see also |
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18 U.S.C. §1832. |
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1 U.S.C. §1 (emphasis added). |
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Black's Law Dictionary |
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|
18 U.S.C. 1839(3)("[T]the term 'trade secret' means 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 - (A) the owner thereof has taken reasonable measures to keep such information secret; and (B) the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, another person who can obtain economic value from the disclosure or use of the information"). The Defend Trade Secrets Act added the language in italics, P.L. 114-153, §2(b)(1)(A), 130 Stat. 380 (2016 |
||||||||||||
|
18 U.S.C. 1839(4). |
||||||||||||
|
United States v. Chung, 659 F.3d 815, 825-29 (9th Cir. 2011)(citations omitted)("[R]easonable measures for maintaining secrecy have been held to include advising employees of the existence of a trade secret, limiting access to a trade secret on a 'need to know basis', and controlling plant access. Security measures, such as locked rooms, security guards, and document destruction methods, in addition to confidentiality procedures, such as confidentiality agreements and document labeling, are often considered reasonable measures"); United States v. Howley, 707 F.3d 575, 579 (6th Cir. 2013)("A reasonable jury could find that Goodyear took reasonable measures to keep the design of its tire-assembly machines secret. Goodyear surrounded its Topeka factory with a fence and required visitors to pass through a security checkpoint. Before [visitors] entered the factory, they had to obtain advance permission from Goodyear, sign confidentiality agreements and agree not to take photographs during their visit. And Goodyear required all of its suppliers … to keep Goodyear's proprietary information secret. ... The 'reasonable measures' requirement does not mean a company must keep its own employees and suppliers in the dark about machines they need to do their work" ).
21 | ||||||||||||
|
United States v. Krumrei, 258 F.3d 535, 539 (6th Cir. 2001); see also |
||||||||||||
|
H.Rept. 104-788, at 12 (1996); |
||||||||||||
|
18 U.S.C. §1839(3)(B)(2012 ed.). |
||||||||||||
|
Unif. Trade Secrets Act §1(4), 14 U.L.A. 538 (2005). The Uniform Trade Secrets Act definition of trade secrets reads in its entirety: "'Trade Secret' means information, including a formula, pattern, compilation, program, device, method, technique, or process that: (i) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy." |
||||||||||||
|
18 U.S.C. §1839; H.Rept. 114-529, at 13-4 (2016)("The intent of §2(b)(1)(A) – striking 'the public' and inserting 'another person who can obtain economic value from the disclosure or use of the information'—is to bring the Federal definition of a trade secret into conformity with the definition used in the Trade Secrets Act ('UTSA'). Both the Court of Appeals for the Seventh Circuit in United States v. Lange, 312 F.3d 263, 267 (7th Cir. 2002), and the Court of Appeals for the Third Circuit, in United States v. Hsu, 155 F.3d 189, 196 (3d Cir. 1998), have identified this difference between the UTAS and the Federal definition of a trade secret as potentially meaningful. While other minor differences between the UTSA and Federal definition of a trade secret remain, the Committee does not intend for the definition of a trade secret to be meaningfully different from the scope of that definition as understood by courts in States that have adopted the UTSA.").
| ||||||||||||
| 22. |
United States v. Chung, 659 F.3d 815, 825 (9th Cir. 2011)("There is some conflict between circuits as to whether that deviation alters the 'readily ascertainable' analysis. Compare United States v. Lange, 312 F.3d 263, 267 (7th Cir. 2002)(interpreting 'the public' as not necessarily meaning the 'general public,' but potentially 'the economically relevant public' (emphasis in original), with United States v. Hsu, 155 F.3d 189, 196 (3d Cir. 1998) (observing that 'the EEA alters the relevant party from whom proprietary information must be kept confidential'). Because Defendant does not contest that the secret information in this case was readily ascertainable, we need not weigh in on this issue"). |
|||||||||||
| 23. |
|
|||||||||||
|
United States v. Aleynikov, 676 F.3d 71, 80-2 (2d Cir. 2012)(construing 18 U.S.C. §1832(a) which at the time read: "Whoever, with intent to convert a trade secret that is related to or included in a product that is produced for or placed in interstate or foreign commerce ... ")(P.L. 112-236 struck the language in italics in favor of that quoted in italics in the previous footnote in order to overcome the implications of Aleynikov, 158 Cong. Rec. S6978 (daily ed. Nov. 27, 2012)(introductory remarks of Sen. Leahy)). |
||||||||||||
|
18 U.S.C. §1832(a); United States v. Hsu, 155 F.3d 189, 195-96 (3d Cir. 1998); United States v. Jin, 833 F. Supp. 2d 977, 1016 (N.D. Ill. 2012), aff'd, 733 F.3d 718 (7th Cir. 2013). |
||||||||||||
|
U.S. Department of Justice, Executive Office for United States Attorneys, Prosecuting Intellectual Property Crimes (Justice Report) 185 (4th ed. [2013])("The recipient of the intended benefit can be the defendant, a competitor of the victim, or some other person or entity"). |
||||||||||||
|
Id. ("One who misappropriates a trade secret but who does not intend for anyone to gain economically from the theft cannot be prosecuted under [the section]"). |
||||||||||||
|
18 U.S.C. §1832(a); |
||||||||||||
|
H.Rept |
||||||||||||
|
|
||||||||||||
|
Justice Report at 177-79; see also |
||||||||||||
|
United States v. Jin, 833 F. Supp. 2d 977, 1011-14 (N.D. Ill. 2012) ), aff'd, 733 F.3d 718 (7th Cir. 2013); |
||||||||||||
|
18 U.S.C. §1832(a)(1)(" ... [K]nowingly – (1) steals, or without authorization appropriates, takes, carries away, or conceals, or by fraud, artifice, or deception obtains such information"). |
||||||||||||
|
18 U.S.C. §1832(a)(2)("[K]nowingly ... (2) without authorization copies, duplicates, sketches, draws, photographs, downloads, uploads, alters, destroys, photocopies, replicates, transmits, delivers, sends, mails, communicates, or conveys such information"). |
||||||||||||
|
Justice Report at 175-76 ("The statute also prohibits not only actions taken against a trade secret's physical form, such as 'steal[ing], ...tak[ing], [and] carr[ying] away', 18 U.S.C. §§1831(a)(1), 1832(a)(1), but also actions that can be taken against a trade secret in a memorized, intangible form, such as 'sketch[ing], draw[ing], ... download[ing], upload[ing], ..., transmit[ting], ... communicat[ing], [and] convey[ing],' 18 U.S.C. §§1831(a)(2), 1832(a)(2). See James H.A. Pooley et al., Understanding the Economic Espionage Act of 1996, 5 Tex. Intell. Prop. L.J. 177 (1997). In this respect, as in others, the EEA echoes civil law and some pre-EEA case law. See, e.g. , 4 Roger M. Milgrim, Milgrim on Trade Secrets §15.01[e]; Stampede Tool Warehouse v. May, 651 N.E.2d 209, 217 (Ill. App. Ct. 1995) ('A trade secret can be misappropriated by physical copying or by memorization.') (citations omitted). Trade secret cases to the contrary that do not involve the EEA are thus not persuasive authority on this point"). See also Thirty-First |
||||||||||||
|
Justice Report at 155. |
||||||||||||
|
18 U.S.C. §1832(a)(3)("... [K]nowingly ... (3) receives, buys, or possesses such information, knowing the same to have been stolen or appropriated, obtained, or converted without authorization"). |
||||||||||||
|
18 U.S.C. §1832(a)(3); United States v. Jin, 833 F. Supp. 2d 977, 1015 (N.D. Ill. 2012), aff'd, 733 F.3d 718 (7th Cir. 2013). |
||||||||||||
|
18 U.S.C. §1832(a). |
||||||||||||
|
United States v. Hsu, 155 F.3d 189, 202-203 (3d Cir. 1998); United States v. Lange, 312 F.3d 263, 268 (7th Cir. 2002); United States v. Yang, 281 F.3d 534, 543 (6th Cir. 2002). |
||||||||||||
|
|
||||||||||||
|
18 U.S.C. §1832(a). |
||||||||||||
|
United States v. Martin, 228 F.3d 1, 10-11 (1st Cir. 2000); cf., United States v. Chung, 659 F.3d 815, 828-29 (9th Cir. 2011). |
||||||||||||
|
|
||||||||||||
|
18 U.S.C. §§1832(a), 3571. |
||||||||||||
|
18 U.S.C. §1832(b). |
||||||||||||
|
18 U.S.C. 3571(d). |
||||||||||||
|
18 U.S.C. §§1834, 2323(c), 3663A(a), (c). See generally CRS Report RL34138, Restitution in Federal Criminal Cases. |
||||||||||||
|
18 U.S.C. §§1834, 2332(a), (b). See generally |
||||||||||||
|
18 U.S.C. §1836. |
||||||||||||
|
| ||||||||||||
| 52. |
18 U.S.C. 1832(a). |
|||||||||||
| 53. |
Id. |
|||||||||||
| 54. |
Id. |
|||||||||||
| 55. | 18 U.S.C. §§1956(c)(7)(A), 1957(f)(3). Section 1957 makes it a federal crime to engage in a monetary transaction using property generated by a predicate offense worth more than $10,000. Section 1956 makes it a federal crime to launder the proceeds of a predicate offense or to use them to promote further offenses. See generally CRS Report RL33315, Money Laundering: An Overview of 18 U.S.C. 1956 and Related Federal Criminal Law. 18 U.S.C. §§1831, 1832. 18 U.S.C. §1832(a). Id. Id. |
|||||||||||
|
Id. |
||||||||||||
|
Id.; United States v. Aleynikov, 676 F.3d 71, 79 (2d Cir. 2012)("Thus there is a limitation – [a nexus to] interstate or foreign commerce – in the statute Aleynikov is charged with violating, a limitation that does not appear in the otherwise parallel foreign espionage statute"). |
||||||||||||
|
18 U.S.C. §§1831(a), 1832(a). |
||||||||||||
|
18 U.S.C. §§1831(b), 1832(b). |
||||||||||||
|
18 U.S.C. §3571(d). |
||||||||||||
|
18 U.S.C. §§1961(1), 1956(c)(7)(A), 1957(f)(3).
|
||||||||||||
|
18 U.S.C. §1831(a)(" ... [I]ntending or knowing the offense will benefit (3) (a) a foreign government, (b) a foreign instrumentality, or (c) a foreign agent ... "). |
||||||||||||
|
18 U.S.C. §1839(1)("As used in this chapter – (1) the term 'foreign instrumentality' means any agency, bureau, ministry, component, institution, association, or any legal, commercial, or business organization, corporation, firm, or entity that is substantially owned, controlled, sponsored, commanded, managed, or dominated by a foreign government"). |
||||||||||||
|
18 U.S.C. §1839(1)("As used in this chapter ... (2) the term 'foreign agent' means any officer, employee, proxy, servant, delegate, or representative of a foreign government"). |
||||||||||||
|
18 U.S.C. §1832(a)("Whoever, with the intent to convert a trade secret ... to the economic benefit of anyone other than the owner ... "). |
||||||||||||
|
H.Rept. 104-788, at 11 (1996). |
||||||||||||
|
18 U.S.C. §§1832(a)("Whoever, with the intent to convert a trade secret ... to the economic benefit of anyone other than the owner ... "); 1831(a)("Whoever, intending or knowing that the offense will benefit ... "). |
||||||||||||
|
Id. |
||||||||||||
|
18 U.S.C. §1835; United States v. Hsu, 155 F.3d 189, 193-94 (3d Cir. 1998). |
||||||||||||
|
United States v. Ye, 436 F.3d 1117, 1120-121 (9th Cir. 2006)("The plain language of the EEA indicates that the government can file an interlocutory appeal pursuant to §1835 only where a district court's order actually directs or authorizes the disclosure of a trade secret.... Here, the district court's order did not provide for the disclosure of any trade secret materials. In its opening brief in this court, the government acknowledges that it had already turned over all relevant trade secret materials and documents.... Because the purpose of the district court's order was only to clarify exactly which materials the government contends constitute the protected trade secrets, and all relevant materials had already been turned over, the district court's order does not direct or authorize the 'disclosure' of trade secrets as required by the plain language of §1835"). |
||||||||||||
|
Id. at 1121-124. Mandamus relief is a discretionary remedy ordinarily only available when the petitioner can show: the absence of any other form of relief, a clear right to issuance of the writ, and that recourse to this extraordinary form of relief is appropriate under the circumstances, Cheney v. United States District |
||||||||||||
|
Morrison v. National Australia Bank Ltd., 561 U.S. 247, 255 (2010), quoting EEOC v. Arabian American Oil Co., 449 U.S. 244, 248 (1991) and Foley Bros., Inc. v. Filardo, 336 U.S. 281 (1949). See generally CRS Report 94-166, Extraterritorial Application of American Criminal Law. |
||||||||||||
|
H.Rept. 104-788, at 14 (1996). |
||||||||||||
|
18 U.S.C. 1837 ("This chapter also applies to conduct occurring outside the United States if - (1) the offender is a natural person who is a citizen or permanent resident alien of the United States, or an organization organized under the laws of the United States or a State or political subdivision thereof; or (2) an act in furtherance of the offense was committed in the United States"). |
||||||||||||
|
H.Rept. 104-788, at 14 (emphasis added)("To ensure that there is some nexus between the ascertaining of such jurisdiction and the offense, however, extraterritorial jurisdiction exists only if [an overt act occurs within the United States or the offender is a U.S. national]"). |
||||||||||||
|
18 U.S.C. §1837 (emphasis added)("This chapter also applies to conduct occurring outside the United States if - (1) the offender is a natural person who is a citizen or permanent resident alien of the United States, or an organization organized under the laws of the United States or a State or political subdivision thereof; or (2) an act in furtherance of the offense was committed in the United States"). |
||||||||||||
|
Ford v. United States, 273 U.S. 593, 623 (1927)("A man who outside of a country willfully puts in motion a force to take effect in it is answerable at the place where the evil is done"); United States v. Yousef, 327 F.3d 56, 96-7 (2d Cir. 2003)("Moreover, assertion of jurisdiction is appropriate under the 'objective territorial principle,' because the purpose of the attack was to influence United States foreign policy and the defendant intended their actions to have an effect – in this case a devastating effect |
||||||||||||
|
U.S. Department of Justice, Criminal Resource Manual §1122 ("Prior to passage of the EEA, the Attorney General assured Congress in writing that for a period of five years, the Department of Justice would require that all prosecutions brought under the EEA must first be approved by the Attorney General, the Deputy Attorney General, or the Assistant Attorney General to the Criminal Division. (See October 1, 1996 letter from Attorney General Janet Reno to Chairman Orrin Hatch, Criminal Resource Manual at 1123). This requirement expired on October 11, 2001. Subsequently, the Attorney General renewed the prior requirement for initiating prosecutions under 18 U.S.C. §1831.... The requirement was not extended for cases under 18 U.S.C. §1832 ... "). |
||||||||||||
|
18 U.S.C. §1030(a)(4), (e)(2)("(a) Whoever ... (4) knowingly and with intent to defraud, accesses a protected computer without authorization, or exceeds authorized access, and by means of such conduct furthers the intended fraud and obtains anything of value, unless the object of the fraud and the thing obtained consists only of the use of the computer and the value of such use is not more than $5,000 in any 1-year period ... shall be punished as provided in subsection (c) of this section.... (e) As used in this section ... (2) the term 'protected computer' means a computer - (A) exclusively for the use of a financial institution or the United States Government, or, in the case of a computer not exclusively for such use, used by or for a financial institution or the United States Government and the conduct constituting the offense affects that use by or for the financial institution or the Government; or (B) which is used in or affecting interstate or foreign commerce or communication, including a computer located outside the United States that is used in a manner that affects interstate or foreign commerce or communication of the United States"); e.g., United States v. Nosal, ___ F.3d ___, ___*2 (9th Cir. July 5, 2016)(defendant convicted computer fraud and theft of trade secrets); United States v. Koo, 770 F.Supp.2d 1115, 1118 (D. |
||||||||||||
|
18 U.S.C. §2314 ("Whoever transports, transmits, or transfers in interstate or foreign commerce any goods, wares, merchandise, securities or money, of the value of $5,000 or more, knowing the same to have been stolen, converted, or taken by fraud.... shall be fined under this title or imprisoned not more than ten years or both ... "); 18 U.S.C. §2315("Whoever receives, possesses, conceals, stores, barters, sells, or dispose of any goods, ware, or merchandise, securities, or money of the value of $5,000 or more ... which have crossed a State of United States boundary after being stolen ... knowing the same to have been stolen ... shall be fined under this title or imprisoned not more than ten years, or both"); see also United States v. Aleynikov, 676 F.3d 71, 76-9 (2d Cir. 2012)(stolen, intangible computer source code is neither a good, ware, nor merchandise for purposes of the National Stolen Property Act); United States v. Agrawal, 726 F.3d 235, 262 (2d Cir. 2013)(affirming trade secrets and stolen property convictions under 18 U.S.C. §1832 and 18 U.S.C. §2314). |
||||||||||||
|
18 U.S.C. §1343 ("Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire ... any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both ... "); e.g., |
||||||||||||
|
18 U.S.C. §951(a)("Whoever, other than a diplomatic or consular officer or attaché, acts in the United States as an agent of a foreign government without prior notification to the Attorney General if required in subsection (b), shall be fined under this title or imprisoned not more than ten years, or both"); e.g., United States v. Chung, 659 F.3d 815, 819 (9th Cir. 2011)(defendant indicted for economic espionage and unregistered foreign agent violations). |
||||||||||||
|
18 U.S.C. §1030(a)("Whoever- (1) having knowingly accessed a computer without authorization or exceeding authorized access, and by means of such conduct having obtained information that has been determined by the United States Government pursuant to an Executive order or statute to require protection against unauthorized disclosure for reasons of national defense or foreign relations, or any restricted data, as defined in paragraph y. of section 11 of the Atomic Energy Act of 1954, with reason to believe that such information so obtained could be used to the injury of the United States, or to the advantage of any foreign nation willfully communicates, delivers, transmits, or causes to be communicated, delivered, or transmitted, or attempts to communicate, deliver, transmit or cause to be communicated, delivered, or transmitted the same to any person not entitled to receive it, or willfully retains the same and fails to deliver it to the officer or employee of the United States entitled to receive it ... shall be punished as provided in subsection (c) of this section.... (b) Whoever conspires to commit or attempts to commit an offense under subsection (a) of this section shall be punished as provided in subsection (c) of this section. (c) The punishment for an offense under subsection (a) or (b) of this section is - (1)(A) a fine under this title or imprisonment for not more than ten years, or both, in the case of an offense under subsection (a)(1) of this section which does not occur after a conviction for another offense under this section, or an attempt to commit an offense punishable under this subparagraph; and (B) a fine under this title or imprisonment for not more than twenty years, or both, in the case of an offense under subsection (a)(1) of this section which occurs after a conviction for another offense under this section, or an attempt to commit an offense punishable under this subparagraph. ... "). |
||||||||||||
|
18 U.S.C. §798, outlaws the unauthorized disclosure of classified information relating to communications intelligence; 18 U.S.C. §1924 outlaws the unauthorized retention of classified information; and 18 U.S.C. §§793, 794 outlaw the unauthorized gathering or transmitting of national defense information; see generally |
||||||||||||
|
P.L. |
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|
|
||||||||||||
|
| ||||||||||||
| 88. |
158 Cong. Rec. S6979 (daily ed. Nov. 27, 2012). |
|||||||||||
| 89. |
158 Cong. Rec. S6968 (daily ed. Nov. 27, 2012). |
|||||||||||
| 90. |
158 Cong. Rec. H6849 (daily ed. Dec. 18, 2012). |
|||||||||||
| 95.
|
|
18 U.S.C. §1839(4)("[T]he term 'owner', with respect to a trade secret, means the person or entity in whom or in which rightful legal or equitable title to, or license in, the trade secret is reposed…."). 96.
|
|
18 U.S.C. §1839("As used in this chapter …(3) the term 'trade secret' means 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-(A) the owner thereof has taken reasonable measures to keep such information secret; and (B) the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, another person who can obtain economic value from the disclosure or use of the information"). 97.
|
|
H.Rept. 114-529, at 14 (2016)("'[M]isappropriation' is defined identically in all relevant respects to the definition of misappropriation in §1(2) of the UTSA"). 98.
|
|
18 U.S.C. §1839("(5) [T]he term 'misappropriation' means - (A) acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means; or (B) disclosure or use of a trade secret of another without express or implied consent by a person who – (i) used improper means to acquire knowledge of the trade secret; (ii) at the time of disclosure or use, knew or had reason to know that the knowledge of the trade secret was - (I) derived from or through a person who had used improper means to acquire the trade secret; (II) acquired under circumstances giving rise to a duty to maintain the secrecy of the trade secret or limit the use of the trade secret; or (III) derived from or through a person who owed a duty to the person seeking relief to maintain the secrecy of the trade secret or limit the use of the trade secret; or (iii) before a material change of the position of the person, knew or had reason to know that - (I) the trade secret was a trade secret; and (II) knowledge of the trade secret had been acquired by accident or mistake; [and] "(6) [T]he term 'improper means'- (A) includes theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means; and (B) does not include reverse engineering, independent derivation, or any other lawful means of acquisition…."). 99.
|
18 U.S.C. §1836(b)(2)(A)(i)("Based on an affidavit or verified complaint satisfying the requirements of this paragraph, the court may, upon ex parte application but only in extraordinary circumstances, issue an order providing for the seizure of property necessary to prevent the propagation or dissemination of the trade secret…." |
|
||
|
| ||||||||||||
| 93. |
Reported favorably without printed report and placed on the calendar, 157 Cong. Rec. S8460 (daily ed. December 8, 2011). |
|||||||||||
| 94. |
H.R. 6029, §2(a)(1), proposed 18 U.S.C. 1831(a). |
|||||||||||
| 95. |
18 U.S.C. 1831(a), (b). |
|||||||||||
| 101.
|
|
18 U.S.C. 1836(b)(2)(A)(ii)("The court may not grant an application under clause (i) unless the court finds that it clearly appears from specific facts that - (I) an order issued pursuant to Rule 65 of the Federal Rules of Civil Procedure [relating to preliminary injunctions and temporary restraining orders] or another form of equitable relief would be inadequate to achieve the purpose of this paragraph…."). 102.
|
|
S.Rept. 114-220, at 6 (2016). 103.
|
|
18 U.S.C. §1836(b)(2)(B)(v), (b)(2)(F)(ii). 104.
|
|
18 U.S.C. §1836(b)(2)(G). 105.
|
15 U.S.C. §1116(d)(11 |
|
||
|
18 U.S.C. | ||||||||||||
| 107.
|
|
18 U.S.C. §1836(b)(3)(B)("In a civil action brought under this subsection with respect to the misappropriation of a trade secret, a court may – (B) award - (i)(I) damages for actual loss caused by the misappropriation of the trade secret; and (II) damages for any unjust enrichment caused by the misappropriation of the trade secret that is not addressed in computing damages for actual loss; or (ii) in lieu of damages measured by any other methods, the damages caused by the misappropriation measured by imposition of liability for a reasonable royalty for the misappropriator's unauthorized disclosure or use of the trade secret"). Note, S.Rept. 114-220, at 9 and in brackets n.17 of the report ("It is not the Committee's intent to encourage the use of reasonable royalties to resolve trade secret misappropriation. Rather, the Committee prefers other remedies that, first, halt the misappropriator's use and dissemination of the misappropriated trade secret and, second, make available appropriate damages. [The Committee notes that courts interpreting the UTSA's analogous provision have held that the award of reasonable royalties is a remedy of last resort]."). 108.
|
18 U.S.C. §1836(b)(3)(C)("In a civil action brought under this subsection with respect to the misappropriation of a trade secret, a court may …(C) if the trade secret is willfully and maliciously misappropriated, award exemplary damages in an amount not more than 2 times the amount of the damages awarded under subparagraph (B); and (D) if … the trade secret was willfully and maliciously misappropriated, award reasonable attorney's fees to the prevailing party.").
109.
|
|
18 U.S.C. §1836(b)(3)(D). 110.
|
|
18 U.S.C. §1836(d). 111.
|
E.g., RJR Nabisco, Inc. v. European Community, 136 S. Ct. 2016, 2111 (2016) (civil racketeering statute does not apply to injuries inflicted overseas); Kiobel v. Royal Dutch Petroleum Co., 133 S. Ct. 1659, 1669 (2013) (the Alien Tort Statute does not extraterritorially); Morrison v. National Australia Bank Ltd., 561 U.S. 247, 273 (2010) (Section 10(b) of the Securities Exchange Act of 1934, which creates a civil cause of action of misconduct relating to securities trading, does not apply to misconduct occurring abroad and relating to securities not listed on an American exchange). |
H.Rept. 112-610, at 2 (2012), quoting Office of the National Counterintelligence Executive, Foreign Spies, Stealing US Economic Secrets in Cyberspace, Report to Congress on Foreign Economic Collection and Industrial Espionage, 2009-2011, at i (Oct. 2011). |
|||
| 99. |
158 Cong. Rec. S8230 (daily ed. Dec. 19, 2012). |
|||||||||||
| 100. |
158 Cong. Rec. H7455 (daily ed. Dec. 30, 2012). |
|||||||||||
| 101. | P.L. 112-269, 126 Stat. 2442 (2013). |