Jun 4, 2025

Federal Theft of Trade Secrets

Theft of Trade Secrets: Legal Overview

Introduction

Theft of trade secrets is a significant concern for businesses and innovators. Trade secrets are a form of intellectual property that provide a competitive edge, and their unauthorized acquisition, use, or disclosure can have severe consequences.

Legal Framework

Federal and State Laws

Trade secret theft is addressed under both federal and state laws in the United States. The primary federal statute is the Economic Espionage Act of 1996 (EEA), which criminalizes the theft or misappropriation of trade secrets. Many states have also adopted the Uniform Trade Secrets Act (UTSA), which provides civil remedies for trade secret misappropriation.

Is theft of trade secrets a federal crime?

Trade secret theft is addressed under both federal and state laws in the United States. The primary federal statute is the Economic Espionage Act of 1996 (EEA), which criminalizes the theft or misappropriation of trade secrets. Many states have also adopted the Uniform Trade Secrets Act (UTSA), which provides civil remedies for trade secret misappropriation.

What is the US Code for theft of trade secrets?

The primary federal statute is the Economic Espionage Act of 1996 (EEA), which criminalizes the theft or misappropriation of trade secrets.

Elements of Trade Secret Theft

To establish trade secret theft, certain elements must be proven. Generally, the plaintiff or prosecutor must show that:

• The information qualifies as a trade secret;
• Reasonable measures were taken to keep the information secret; and
• The defendant acquired, used, or disclosed the trade secret without authorization.

How do you prove trade secret theft?

To establish trade secret theft, certain elements must be proven. Generally, the plaintiff or prosecutor must show that:

• The information qualifies as a trade secret;
• Reasonable measures were taken to keep the information secret; and
• The defendant acquired, used, or disclosed the trade secret without authorization.

Examples of Trade Secret Theft

What is an example of trade secret theft?

Common examples of trade secret theft include employees taking confidential formulas, customer lists, or manufacturing processes to a competitor, or hackers stealing proprietary software code. High-profile cases have involved technology companies, pharmaceutical firms, and manufacturers.

Penalties and Remedies

Penalties for trade secret theft can include criminal fines, imprisonment, and civil damages. Courts may also issue injunctions to prevent further use or disclosure of the stolen trade secrets.

Conclusion

Theft of trade secrets is a serious offense with significant legal consequences. Businesses should take proactive steps to protect their confidential information and seek legal recourse if misappropriation occurs.

Federal Theft of Trade Secrets