Criminal consequences of trade secret theft: The EEA and compliance plans

Abstract

For trade secret owners, the Economic Espionage Act of 1996 (the EEA) provides the prospect of greatly improved protection of property rights. For company employees, the EEA means more attention to defending proprietary information. For competitive intelligence gatherers—including outside consulting firms—the EEA brings new legal restrictions backed up by criminal penalties. Under the government's Federal Sentencing Guidelines, prosecutions for trade secret theft are less likely to be brought if the victim company can show it took steps to prevent and detect criminal conduct. Businesses should therefore adopt and implement compliance plans to protect their proprietary trade secrets. These plans should be designed to take account of the specific risks a company faces. Records should be maintained to demonstrate that the company took all reasonable steps to observe activity that might indicate a misappropriation of trade secrets. Ultimate responsibility for defining and enforcing compliance plans should lie with high-level personnel with authority to influence compliance in a meaningful way. © 1997 John Wiley & Sons, Inc.