The Economic Espionage Act (EEA) is a US federal law that criminalizes the theft of trade secrets, punishable by up to 15 years in prison and a fine of up to $500,000. The law also allows for the confiscation of assets acquired through theft. The EEA applies to foreign companies that steal US trade secrets and attempt to sell them in the US. Some companies are hesitant to pursue prosecution under the EEA due to difficulties in protecting the secrecy of the stolen trade secret in a public trial.
The Economic Espionage Act (EEA) is a United States federal law established in 1996 that makes the theft of trade secrets a criminal offense, and therefore punishable. Before the Economic Espionage Act was instituted, the Uniform Trade Secrets Act (UTSA) of 1970 made the theft of trade secrets a civil offense, and those who unlawfully profited from such theft could be sued for the profits they made. they should have belonged to the company holding the trade secret.
However, theft of trade secrets through coercion, blackmail, outright theft, or theft of a trade secret does not appear to have been successfully deterred by UTSA. Thus, those who suffered loss of profits sought to make theft a criminal offence.
Under the law, a trade secret is defined as something that has been reasonably protected as a secret and enjoys economic independence because of its secrecy. A trade secret can also be tangible or intangible, so an idea can be stolen just as easily as a formula or product.
Not only does the Economic Espionage Act allow for prosecution of those who have stolen a trade secret, it also allows for prosecution for those who attempt to steal a secret. The punishment can be quite significant.
The theft of a trade secret by a company or individual can be punished with a prison sentence of up to 15 years and a fine of up to 500,000 US dollars (USD). Both the maximum fine and punishment can be assessed according to the seriousness of the theft as established by the Economic Espionage Act.
Furthermore, the law stipulates that assets acquired as a result of theft, directly or indirectly, may have to be confiscated from the company that was entitled to the trade secret. So a person who steals a trade secret, uses it, and uses the profits to buy a home, may have to give up that home.
The Economic Espionage Act also applies to foreign companies that steal US trade secrets and then attempt to sell the result of those secrets in the United States. Stolen trade secrets used to market products outside the United States are more difficult to enforce the law, unless a foreign government is equally willing to enforce the law.
Some companies feel uncomfortable pursuing prosecution under the Economic Espionage Act. In a public proceeding such as a trial, it is possible that a stolen trade secret cannot be protected to prove that it was secret. Others feel that the EEA firmly establishes the trade secret as a secret, thus allowing for easier prosecution and civil suits if anyone other than the owner of the secret attempts to use it.
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