18 U.S. Code § 1832 – Theft of Trade Secrets

If your company innovates, then somebody wants your ideas and plans. If they try to get them through deceitful or fraudulent means, then that’s a crime.

18 U.S. Code § 1832 – Theft of trade secrets

Theft of trade secrets is prosecuted under Title 18 of the U.S. Code of law, the home of major felony statutes such as bank fraud and conspiracy against the United States. Most of the prison sentences there max out around five to twenty years in penitentiary.

There are a number of ways to fall afoul of Section 1832:

(a) Whoever, with intent to convert a trade secret, that is related to a product or service used in or intended for use in interstate or foreign commerce, to the economic benefit of anyone other than the owner thereof, and intending or knowing that the offense will, injure any owner of that trade secret, knowingly—

We start with the mens rea aspect of the law–that the prosecutors must prove someone intended to steal a trade secret, and knew that the owner would be harmed. The offense cannot be merely accidental.

(1) steals, or without authorization appropriates, takes, carries away, or conceals, or by fraud, artifice, or deception obtains such information;

Pretty basic–don’t steal.

(2) without authorization copies, duplicates, sketches, draws, photographs, downloads, uploads, alters, destroys, photocopies, replicates, transmits, delivers, sends, mails, communicates, or conveys such information;

Generally, the crime is defined by the theft of documents which contain the relevant information.

(3) receives, buys, or possesses such information, knowing the same to have been stolen or appropriated, obtained, or converted without authorization;

Buying stolen stuff is just as bad as stealing it.

(4) attempts to commit any offense described in paragraphs (1) through (3); or

Trying to commit a really bad felony is generally as bad as being successful.

(5) conspires with one or more other persons to commit any offense described in paragraphs (1) through (3), and one or more of such persons do any act to effect the object of the conspiracy,

Being in a club of trade secret theft enthusiasts is bad; find new friends to hang out with!

shall, except as provided in subsection (b), be fined under this title or imprisoned not more than 10 years, or both.

Ten years in prison! So this is a major Federal felony.

(b) Any organization that commits any offense described in subsection (a) shall be fined not more than the greater of $5,000,000 or 3 times the value of the stolen trade secret to the organization, including expenses for research and design and other costs of reproducing the trade secret that the organization has thereby avoided.

Corporations can also be prosecuted under this statute. The penalties can be as high as $5 million, or three times the value of the trade secret which was stolen.

Is your company a target of theft of trade secrets?

With this much money at stake, there are more attempts at theft of trade secrets than you might believe.

Are you defending against such potential threats? If you are not sure–give us a call.