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U.S. Code collection
TITLE 18 > PART I > CHAPTER 90 > § 1831
§ 1831. Economic espionage
Release date: 2005-08-03
(a) In General. Whoever, intending or knowing that the offense will benefit any foreign government, foreign instrumentality,
or foreign agent, knowingly
(1) steals, or without authorization appropriates, takes, carries away, or conceals, or by fraud, artifice, or deception
obtains a trade secret;
(2) without authorization copies, duplicates, sketches, draws, photographs, downloads, uploads, alters, destroys, photocopies,
replicates, transmits, delivers, sends, mails, communicates, or conveys a trade secret;
(3) receives, buys, or possesses a trade secret, knowing the same to have been stolen or appropriated, obtained, or converted
without authorization;
(4) attempts to commit any offense described in any of paragraphs (1) through (3); or
(5) conspires with one or more other persons to commit any offense described in any of paragraphs (1) through (3), and
one or more of such persons do any act to effect the object of the conspiracy,
shall, except as provided in subsection (b), be fined not more than $500,000 or imprisoned not more than 15 years, or
both.
(b) Organizations. Any organization that commits any offense described in subsection (a) shall be fined not more than
$10,000,000.
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Have you ever considered how vulnerable companies are to theft of sensitive business information? Imagine for a moment how
much a company would risk to gain access to the product marketing strategy or research and development information of its
top competitor. A special agent from the FBI will be online Thursday to discuss economic espionage and what the bureau is
doing to prevent it.
Editor's note: Please do not use this forum to submit tips or leads to the bureau. If you have any information to pass
on, please contact the FBI field office nearest you.
Comment from FBI Special Agent: In 1994, the FBI started its economic counterintelligence unit which focuses on economic
espionage activities. With the passage of the Economic Espionage Act in October 1996, there is now a federal statute in place
to address this problem. I will try to answer as many questions as possible in the time allowed.
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Washington DC: Has economic espionage become more prevalent as computers become faster and more affordable?
FBI Special Agent: Access to and use of computers, of course, has increased the possibilities for individuals to collect
sensitive or restricted information. The internet allows for anonymity and easy flow of information at an affordable price.
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New York, New York: Is the line between economic espionage and other espionage areas fuzzy?
FBI Special Agent: Espionage, what we refer to as classic espionage, involves the collection of classified information,
usually at the behest of, or with the intent to benefit a foreign power. The Economic Espionage Act of 1996 provides for two
federal felonies, which address the theft of trade secrets, (1) for the benefit of a foreign power or (2) for the economic
benefit of someone other that the lawful owner. It may involve the theft of information that is not classified.
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Los Angeles, Ca: Does the FBI have "command centers" for economic esp investigations, where Agents could be
called from to help? Thank you . . .
FBI Special Agent: The best way to report an economic espionage violation is to report it to your local FBI field office.
You can always locate the nearest office by looking at the inside page of the phone book, or through the FBI's website:
www.fbi.gov.
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New York, New York: Is there one industry that seems to be the victim of economic espionage more than another?
FBI Special Agent: Economic espionage activity is a problem that cuts across many industries. Economic collection efforts
can be targeted at large industries or small businesses, and it can involve cutting-edge technologies or mainstream industry.
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Boston, MA: How does economic espionage effect the national security? Why is it so dangerous?
FBI Special Agent: Our national security ultimately depends upon our ability as a nation to sustain a strong, vibrant,
and well diversified economy. To do that today requires that we maintain our lead in technology and the production methods
used to exploit that technology. We, as a nation invest billions of dollars yearly in this effort. Entities, individuals,
or nations that seek to capitalize upon our abilities without investing the required capital undermine our ability to maintain
our edge and consequently weaken our national security.
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Sacramento, CA: I've heard a lot about laptops being stolen because of the information they have inside of them. Does
the FBI have some sort of program to enable companies to be able to prevent this from happening?
FBI Special Agent: There are a variety of different ways that information may be collected by those not entitled to possess
it. The theft of laptops is a major concern, especially if the laptops are used to store sensitive, or proprietary information
of a company. The FBI advises that you keep hard drives and disks on your person at all times.
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Kansas City, MO: My email at work (as well as email of several other executives) has been accessed by an unknown person
via the internet (AOL). We have the documentation but AOL will not provide us with the name of the person unless we have a
warrant. What recourse do we have? What should we do?
FBI Special Agent: It's often difficult to address specific issues without knowing all the details. I suggest that you
contact your local FBI field office and discuss this issue with them.
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Austell, GA: How do I begin an investigation on behalf of our company that has suffered huge damages due to business espionage
and WCC? Bill Jordan
FBI Special Agent: The first thing that you should do is to contact your local FBI field office. If you begin the investigation,
you may inadvertently damage or destroy evidence, alert the perpetrators that an investigation is underway, or otherwise compromise
our ability to follow up. You may also wish to obtain assistance from your company security and general counsel offices.
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San Diego, CA: I haven't heard of many Economic Espionage prosecutions since 1996. How are government attorneys responding
to FBI efforts to prosecute under the statute? Are government attorneys afraid to prosecute? If so, why?
FBI Special Agent: There have been 34 prosecutions since the Act was passed. When the law was created, Congress sought
to ensure that prosecutions would be carefully considered. As a result, each case must be reviewed by a high-ranking Department
of Justice Official. On the other hand, Congress specifically left open all other remedies, including state criminal and civil
actions.
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New York, NY: What is the most recent big investigation in economic espionage?
FBI Special Agent: Everyone has a different perspective on what constitutes a "big" case but one major case
worthy of note is the "Avery Dennison" case. In that case, the company involved received the maximum fine under
18 U.S.C. 1832 of $5 million. A related civil suit resulted in a judgment of approximately $80 million. For more information
on this case, visit the 1999 Press Release Section on the FBI Homepage.
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Washington, DC: How much of a problem is economic espionage for the US? thank you for your time today.
FBI Special Agent: It's difficult to quantify the amount of harm done to the U.S. The American Society for Industrial
Security estimated the problem to cost the U.S. approximately $2 billion per month or upwards of $300 billion per year. These
figures were derived from responses to surveys of the Fortune 500 companies. Whatever the true cost, it is staggering.
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Richmond, Virginia: What kind of educational background does an Agent need to do work in an area such as economic espionage?
Is accounting useful?
FBI Special Agent: All disciplines, including Special
Agent Accountants, can be a part of an economic espionage investigation.
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City Island, New York: Hoe does the FBI investigate a crime if the person performed espionage from overseas?
FBI Special Agent: In the Economic Espionage Act of 1996, Title 18, USC, Section 1831-1839, one specific section refers
to the extraterritorial aspect of the law. The FBI may pursue an economic espionage investigation beyond our borders, if the
defendant is a U.S. person, or if the victim company is incorporated under the laws of the U.S., or if there is an act in
furtherance of the offense committed in the U.S.
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Arlington, Va: how can you protect your company from such spys?
FBI Special Agent: The Economic Espionage Act of 1996 requires that owners take reasonable measures to keep their "Trade
Secrets" secret. If you would like additional information on this, you can refer to the FBI's ANSIR program. ANSIR stands
for "Awareness of National Security Issues and Response." There is an ANSIR coordinator is each of the FBI field
offices throughout the country. More information on ANSIR can be found on the website: WWW.FBI.GOV
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Comment from FBI Special Agent: I am sorry that I can't address all of your questions. My time is up. Please see the FBI
web site for additional information.
© Copyright 2006 USA TODAY, a division of Gannett Co. Inc.
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Uniform Trade Secrets Act
(Drafted by the National Conference of Commissioners on Uniform State Laws, as amended 1985)
§1. Definitions
As used in this Act, unless the context requires otherwise:
(1) "Improper means" includes theft, bribery, misrepresentation, breach or inducement of a breach of duty to
maintain secrecy, or espionage through electronic or other means.
(2) "Misappropriation " means: (i) acquisition of a trade secret of another by a person who knows or has reason
to know that the trade secret was acquired by improper means; or (ii) disclosure or use of a trade secret of another without
express or implied consent by a person who (A) used improper means to acquire knowledge of the trade secret; or (B) at the
time of disclosure or use knew or had reason to know that his knowledge of the trade secret was (I) derived from or through
a person who has utilized improper means to acquire it; (II) acquired under circumstances giving rise to a duty to maintain
its secrecy or limit its use; or (III) derived from or through a person who owed a duty to the person seeking relief to maintain
its secrecy or limit its use; or (C) before a material change of his position, knew or had reason to know that it was a trade
secret ad that knowledge of it had been acquired by accident or mistake.
(3) "Person" means a natural person, corporation, business trust, estate, trust, partnership, association, joint
venture, government, governmental subdivision or agency, or any other legal or commercial entity.
(4) "Trade secret" means information, including a formula, pattern, compilation, program device, method, technique,
or process, that: (i) derives independent economic value, actual or potential, from no being generally known to, and not being
readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and (ii)
is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
§2. Injunctive Relief
(a) Actual or threatened misappropriation may be enjoined. Upon application to the court an injunction shall be terminated
when the trade secret has ceased to exist, but the injunction may be continued for an additional reasonable period of time
in order to eliminate commercial advantage that otherwise would be derived from the misappropriation.
(b) In exceptional circumstances, an injunction may condition future use upon payment of a reasonable royalty for no longer
than the period of time for which use could have been prohibited. Exceptional circumstances include, but are not limited to,
a material and prejudicial change of position prior to acquiring knowledge or reason to know of misappropriation that renders
a prohibitive injunction inequitable.
(c) In appropriate circumstances, affirmative acts to protect a trade secret may be compelled by court order.
§3. Damages
(a) Except to the extent that a material and prejudicial change of position prior to acquiring knowledge or reason to
know of misappropriation renders a monetary recovery inequitable, a complainant is entitled to recover damages for misappropriation.
Damages can include both the actual loss caused by misappropriation and the unjust enrichment caused by misappropriation that
is not taken into account in computing actual loss. In lieu of damages measured by any other methods, the damages caused by
misappropriation may be measured by imposition of liability for a reasonable royalty for a misappropriator's unauthorized
disclosure or use of a trade secret.
(b) If willful and malicious misappropriation exists, the court may award exemplary damages in the amount not exceeding
twice any award made under subsection (a).
§4. Attorney's Fees
If (i) a claim of misappropriation is made in bad faith, (ii) a motion to terminate an injunction is made or resisted
in bad faith, or (iii) willful and malicious misappropriation exists, the court may award reasonable attorney's fees to the
prevailing party.
§5. Preservation of Secrecy
In action under this Act, a court shall preserve the secrecy of an alleged trade secret by reasonable means, which may
include granting protective orders in connection with discovery proceedings, holding in-camera hearings, sealing the records
of the action, and ordering any person involved in the litigation not to disclose an alleged trade secret without prior court
approval.
§6. Statute of Limitations
An action for misappropriation must be brought within 3 years after the misappropriation is discovered or by the exercise
of reasonable diligence should have been discovered. For the purposes of this section, a continuing misappropriation constitutes
a single claim.
§7. Effect on Other Law
(a) Except as provided in subsection (b), this [Act] displaces conflicting tort, restitutionary, and other law of this
State providing civil remedies for misappropriation of a trade secret.
(b) This [Act] does not affect: (1) contractual remedies, whether or not based upon misappropriation of a trade secret;
or (2) other civil remedies that are not based upon misappropriation of a trade secret; or (3) criminal remedies, whether
or not based upon misappropriation of a trade secret.
§8. Uniformity of Application and Construction
This act shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the
subject of this Act among states enacting it.
§9. Short Title
This Act may be cited as the Uniform Trade Secrets Act.
§10. Severability
If any provision of this Act or its application to any person or circumstances is held invalid, the invalidity does not
affect other provisions or applications of the Act which can be given effect without the invalid provision or application,
and to this end the provisions of this Act are severable.
§11. Time of Taking Effect
This [Act] takes effect on __________, and does not apply to misappropriation occurring prior to the effective date. With
respect to a continuing misappropriation that began prior to the effective date, the [Act] also does not apply to the continuing
misappropriation that occurs after the effective date.
§12. Repeal
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