October 16, 2018

BNA Publishes My Report on EEA Prosecutions

BNA’s Patent, Trademark and Copyright Journal published my analysis of the approximately 124 indictments that the government has obtained under the Economic Espionage Act. Based on the prosecutions the article draws conclusions about (1) the location of the cases; (2) the extent of foreign government involvement; (3) defendant’s gender; (4) defendant’s level of education; (5) relationship of defendant to the victim; (6) nationality of the defendant/purpose of the theft; (7) type of trade secrets stolen; (8) identify of the victim; (9) adequacy of protective measures; (10) dispositions; and (11) sentences.

Based on these findings and conclusions, the article also makes meaningful conclusions and recommendations for both government and industry. With regard to the government, the findings suggest that it should be more aggressive in prosecuting violations of the EEA if it were truly serious about deterring thefts of trade secrets, and that the government has not been as active as claimed. Further, there is marked difference among U.S. Attorney’s Offices in the number of cases the office has charged under the EEA.

The article also concludes that the effectiveness of the EEA in protecting trade secrets is also hampered by statutory limitations of the current version of the EEA. In particular, Congress should amend the EEA so that it unambiguously covers the theft of trade secrets to the extent permitted by the Commerce Clause, and that it also should protect trade secrets in the development stage. Finally, Congress should increase the penalties for theft of trade secrets not involving a foreign entity; more than 90 percent of the prosecutions, thus far, have not involved a foreign entity, and the defendant was sentenced to probation or home confinement in almost 40 percent of the cases.

With regard to industry, the findings indicate that companies are not doing enough to protect their valuable proprietary information and that the process of protecting trade secrets is organic, in that, all businesses should constantly update their trade secret protection programs in response to ever changing conditions and threats. For example, the threat of foreign economic espionage, especially by Chinese entities, has greatly increased over the past several years.

To read the entire article, click here.

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