Fighting computer espionage
- By Carl Peckinpaugh
- May 15, 2000
In 1996, Congress passed the first federal law making it a crime to steal
trade secret information. At the time, the sponsors of the Economic Espionage
Act hailed the law as "a significant bipartisan accomplishment" designed
to protect many kinds of confidential information, whether maintained in
hard copy or in a computer. However, the act's history shows it as more
of a paper tiger than a major accomplishment.
When the Economic Espionage Act was passed, the Clinton administration
stated that no case would be brought in the first five years unless personally
approved by the attorney general or another senior Justice Department official.
The number of cases brought since then can be counted on just two hands.
In part, this record reflects how hard trade secrets cases are to prove.
In United States v. Yang, two people were convicted of stealing trade secret
information under the Economic Espionage Act. However, the conviction depended
on a government sting operation requiring the cooperation of the individual
who had been selling the data to the defendants.
One of the problems with a criminal trade secrets case is the level
of information that must be disclosed to prosecute the case successfully.
In general, a criminal defendant may claim as a defense that the information
at issue was not, in fact, a valuable trade secret. To counter that defense,
the prosecution may have to reveal even more confidential information than
was stolen in the first place.
However, that problem was avoided in United States v. Kai-Lo HSU. In
that case, the defendants were indicted for the "attempted theft of trade
secrets." According to the court, the prosecution was not required to prove
that the information at issue constituted a trade secret because the defendants
were never charged with the actual theft of trade secrets, only with the
attempt. According to the court, a person could be guilty of attempted theft
of trade secrets even if the stolen information had no real value.
In addition to the criminal provisions of the Economic Espionage Act,
the law authorizes the attorney general to file civil suits in appropriate
cases. However, the act does not create a private right of action. In fact,
no federal law allows one company to sue another company or an individual
to protect its trade secrets, although such suits may be brought under the
laws of most states.
Given the large number of computer intrusion incidents reported in recent
months, it is obvious that the Economic Espionage Act's criminalization
of trade secrets cases has not had much of a deterrent effect. Whether the
law should be retained and improved, or another alternative pursued instead,
is a matter that Congress should consider.
—Peckinpaugh is corporate counsel for DynCorp, Reston, Va. This column discusses
legal topics of general interest only and is not intended to provide legal
advice. Should you have a specific question or legal problem, consult an