Economic Espionage and Misappropriation of Trade Secrets

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With the business environment getting more competitive, institutions are coming up with ways to maintain an upper hand over their competitors. As a result, firms are increasingly valuing the significance of intellectual property rights. However, the theft and misuse of proprietary information is on rise as organizations strive to maintain an edge over others. Based on that, the state of affair is likely to threaten research and innovation with people fearing being unable to reap from their work. Concerning that, the paper would focus on economic espionage and misappropriation of trade secrets. Aspects such as the prosecution of such cases would be examined aimed at lowering the frequency of intellectual property rights theft. Besides that, there would also be a discussion in instances where a foreign entity is involved and how to handle such situations.

            Both misappropriation of trade secrets and economic espionage are reviewed in the law. They are found in the Economic Espionage Act of 1996 that provides a distinction between them under the statute in Sections1831 and 1832 of the US code (Pooley & Lemley, 1996). They provide means of promotion and the protection of national and economic security. Economic espionage takes place when trade secrets are stolen to benefit a foreign institution, while misuse of a trade secret involves an individual knowingly stealing a trade secret to benefit someone who is not the original owner. Trade secrets represent a form of intellectual property and are a key aspect to the innovation process. As a result, it is crucial to protect the development of new ideas since they may be products of years of research besides the high costs involved.

Concerning that, there are issues that arise when investigating the crimes and their impact. One of them relates to the companies themselves. In most cases, firms are usually hesitant in reporting the cases to the Federal Bureau Investigation (FBI). Most of them do not want to disclose their trade secrets to courts or any extra third party that could lead to a further compromise. Nonetheless, what people are unaware is the fact that the FBI and the Department of Justice (DOJ) have safeguards and protection measures in place to ensure the protection of the trade secret and its confidentiality. Due to the sensitive nature of the cases involved, there are usually adequate measures in place to alleviate the possibility of further damage through leaking of the details to the public. Moreover, increased security within the premise where the data is stored is facilitated to help prevent the impact of additional incidents. The other way to enhance security measures aimed at protecting the trade secret is conducting background checks on workers that the firm hires. It is to make sure that they do not have any form of contact or ties to foreign companies and other competitors thus minimizing the existence of a likely breach.

On the same subject, the other concern relating to investigating economic espionage and trade secret litigations is proving the fact that they were indeed valuable assets. Under the Economic Espionage Act, cases require evidence of a trade secret. For that to occur, it is crucial to determine how a trade secret is established under the legal framework. For any data to get the consideration and validation of being a trade secret, it has to have three parts: highlighting of measures taken to protect the information, economic value derived from the details not being publicly known and it has to be in detailed form (“Economic Espionage and Trade Secrets,” 2009). Furthermore, there is need to unearth facts that the details were taken to benefit a foreign entity or someone besides the valid owner of the secret. It can include ways such as possessing, stealing, copying or scheming to execute any of them to be misappropriating trade secrets.

With reference to that, economic espionage and misappropriation of trade secrets are two distinct aspects. For one to determine the extent of the damage, it is crucial to realize the affected to know whether the offenses had a major impact on their operation or processes. An example is if the victim was Coca-Cola and someone was trying to leak their soft drink formula to rival Pepsi, then the misappropriation would significantly damage Coca-Cola due the fact that its rivalry is domestic and not from a foreign entity. Another illustration is that if the victim was the government of America, and the trade secrets were confidential documents being disclosed to discredit the government, then the economic espionage would be damaging. The situation was evident when Manning leaked over seven hundred thousand documents classified documents that were secretive to WikiLeaks. As a result, he was sentenced to thirty-five years but the verdict was later on reviewed during President Obama’s reign (Nakashima & Horwitz, 2017).

In situations where there is violation of the Economic Espionage Act, prosecutions result aimed at protecting the victim and instituting appropriate legal measures. Nonetheless, the entire process is lengthy and complicated since many aspects require clarification for a litigation to be successful. Concerning that, there are two diverse ways to investigate misappropriation of trade secrets. Each of them provides a distinct way in which the evidence is gathered. The first approach involves the collecting of facts while the offense unfolds while the other one is after the incident has taken place. For example, there was an undercover inquiry by Coca-Cola after learning that an executive assistant of the firm had contacted the management of Pepsi and was willing to sell secret details to the highest bidder. The operation involved people disguised as Pepsi officials so that they could be able to determine everyone engaged in the process and who stole the information.

The other type of investigation is when the US Customs and Border Protection Officer noticed a suspicious activity of someone suspect trying to leave the country. Following the intervention of the administrator, the individual was caught with misappropriated trade secrets that initiated an inquiry to unravel the mystery surrounding the incident. During the investigation and prosecution of cases involving trade secrets and economic espionage, protective orders are requested to facilitate the safeguarding of the details. The Congress included a provision in the legislation of the offenses that protected against publicizing of the details during a trial (Economic Espionage and Trade Secrets,” 2009).

During court cases, the situation may become complicated when a foreign entity is involved. The defendant may leave America before the investigation begins hence impeding the entire process. Among the cases approved for prosecution by the justice system, the lead defendants remain escapees to Japan. If the country has no form of extradition rights with America to make the accused return to America, there exists a possibility of never showing up. It is because their presence would likely lead to a jail term for contravening the law.

In conclusion, the issues on economic espionage and trade secrets misappropriation are complex. Nonetheless, they require the enforcement of stringent legislation to shield institutions from their possible outcomes and facilitate compensatory measures. Intellectual property rights require safeguard and protection due to their competitive advantage and the economic output they bring to the society. Additionally, their upholding facilitates a culture of innovation that spurs growth and economic prosperity.


Economic Espionage and Trade Secrets. (2009, November). Retrieved February 18, 2018, from

Nakashima, E., & Horwitz, S. (2017, January 17). Obama commutes sentence of Chelsea Manning, soldier convicted for leaking classified information. Retrieved February 18, 2018, from

Pooley, J. H., Lemley, M. A., & Toren, P. J. (1996). Understanding the Economic Espionage Act of 1996. Tex. Intell. Prop. LJ, 5, 177.

December 12, 2023


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