A Criminal Conviction for Theft of a Trade Secret Does Not Require a Trade Secret
In an unusual case involving trade secrets, a court determined that the mere belief that stolen information is a trade secret, even when no trade secret was stolen, is criminally convictable. As an important tool for protecting intellectual property, businesses will often keep valuable information secret, and only provide access to individuals necessary to complete some business objective. Most businesses grant access to the trade secret on the belief that misappropriation is actionable under the Defend Trade Secrets Act of 2016, as well as state laws that are substantially similar to the federal law. It is less known, however, that the theft of a trade secret is a federal crime, pursuant to the Economic Espionage Act of 1996 (“EEA”), as codified at 18 U.S.C. § 1832.
In this particular case out of Chicago, an employee resigned and, before leaving, downloaded 1900 files from his employer. He believed that this information constituted trade secrets of his employer, and had the intention to take these trade secrets to his new foreign based employer. However, prior to boarding his plane to China, he was stopped by the United States Customs and Border Patrol, where the hard drive was discovered.
In February 2019, he was convicted by a jury of actual and attempted theft of trade secrets, pursuant to the EEA. The jury also determined that, to a large extent, the stolen documents did not constitute a trade secret. The defendant filed for a post-conviction motion for a new trial, with an argument that you can’t be convicted of theft of trade secrets if the information did not include any trade secrets.
On October 9, 2019, the judge ruled that theft of trade secrets under the EEA exists even if the underlying materials don’t constitute a trade secret. This suggests that stealing what is believed to be a trade secret constitutes a crime. This outcome certainly poses a unique perspective on a lesser known consequence regarding theft of a trade secret. Whether this concept will transfer to non-criminal litigation over the theft of trade secrets has yet to be determined.
For a detailed history, please see United States of America v. Robert O’Rourke, No. 17-cr-00495, (N.D. Ill. 2019).
VW Contributor: Alex B. Rainville
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