The Economic Espionage Act of 1996 (EEA) provided a broader definition of what constitutes a “trade secret” and what constitutes trade secret theft, effectively replacing the 1948 Trade Secrets Act, which was limited to prosecution of federal employees. The EEA also was passed so as to serve as a universal trade secret theft act, overriding various trade secret acts instituted by individual states.
Business Practices Protected as Trade Secrets
Not all business practices are regarded and protected as “trade secrets.” To qualify, the owner of the trade secret must have “taken reasonable measures to keep the information secret” and the information must “derive economic value from not being known to or ascertainable by the public.” The EEA does not apply to trade secrets discovered by “parallel development or reverse engineering.” Skills and knowledge that an individual acquires through lawful means while working are also not subject to persecution under the EEA.
Theft of a Trade Secret
Both the party who acquires the information and anyone who receives it are punishable under the EEA. For an individual to be considered a thief of a trade secret, the individual must have taken, transmitted, or recorded in some form an article regarded to be a trade secret through deception or without authorization. If another individual or group of individuals then “receives, buys or possesses” the information, knowing it was obtained through deceitful means, that individual or group of individuals is punishable under the EEA. Also punishable are those individuals who, by breaking the EEA, are knowingly benefiting a foreign government or agent from a foreign country.