In addition to Texas common law and the Texas Theft Liability Act (TTLA), the Economic Espionage Act of 1996 (EEA) provides protection for trade secrets.  The Economic Espionage Act provides a broader definition of what constitutes a “trade secret” and trade secret theft, effectively replacing the 1948 Trade Secrets Act, which was limited to prosecution of federal employees.  The EEA also serves as a universal trade secret theft act.  

According to the statute, “[u]ntil 1996 there was no federal statute that explicitly criminalized the theft of commercial trade secrets. . . . Because federal prosecutors sometimes had trouble ‘shoe-horning’ the theft of trade secrets into the above statutes and because of the increased recognition of the increasingly important role that intellectual property plays in the well-being of the American economy, Congress enacted the Economic Espionage Act of 1996. . . .  In general, it criminalizes the theft of trade secrets.”  

What are the elements of a violation of the EEA?
The elements needed to be proved beyond a reasonable doubt for claims under 18 U.S.C. Sections 1831 and 1832 are:

1. the defendant stole, or without authorization of the owner, obtained, destroyed, or conveyed information;
2. the defendant knew or believed that this information was a trade secret; and  
3. the information was in fact a trade secret.  

What is protectable as trade secrets under EEA?
The definition of “trade secret” is very broad, and includes generally all types of information, however stored or maintained, which the owner has taken reasonable measures to keep secret and which has independent economic value.  18 U.S.C. 1839.  This definition is generally considered to be broader than other definitions of “trade secrets,” including the Uniform Trade Secrets Act.  

However, 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 prosecution under the EEA.

What constitutes 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 have committed trade secret theft, 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.

If you are interested in additional information on the Economic Espionage Act, or if you have any questions regarding trade secrets or our trade secret protection services, please contact one of our Dallas trade secret lawyers.   We offer an array of services in the areas of intellectual property including patents, trademarks, copyrights, trade secrets as well as intellectual property litigation and enforcement.  Detailed information on these and other services is available at www.kk-llp.com.  In addition, we act as local counsel in patent, trademark, copyright, trade secret, and commercial litigation cases in the state and federal courts in the Northern District of Texas.  Further information on our local counsel practice is available at www.kk-llp.com/localcounsel.