New Developments - The Economic Espionage Act

By John E. Daniel

The Economic Espionage Act of 1996 became law several months ago. It criminalizes the misappropriation of trade secrets and makes the violator liable for fines and imprisonment. It also provides for the forfeiture of property used to violate, or derived from a violation of, the law. It has special provisions and higher penalties for violations by persons acting on behalf of foreign governments and, under certain circumstances, can apply to conduct outside the United States. Simply put, the stakes have been raised dramatically for those who would consider trying to misappropriate trade secrets in the United States.

The Act appears as a new Chapter 90, entitled "The Protection of Trade Secrets", to Title 18 of the United States Code. Nine sections have been added - Sections 1831-39. The first two sections describe the two types of violations covered by the Act.