InfoSec Legislation

Economic Espionage Act

The Economic Espionage Act of 1996, enacted by Congress October 11, 1996, to deal mainly with the issue of industrial espionage (i.e. theft or misappropriation of a trade secret). And, while it did have a main focus, as the government typically does, there were some add-ons for other unrelated things like the insanity defense and the Boys & Girls Club of America. But, for the course which this subject has come up, we will focus on the industrial espionage portion of the act.

Industrial espionage is defined as: Spying directed toward discovering the secrets of a rival manufacturer or other industrial company. Gathering information on one’s competitors is a natural occurrence within the business world. But it is the type of information and how that information is used where the lines of the law can be crossed. The Economic Espionage Act (EEA) makes the theft or misappropriation of a trade secret a federal crime, and unlike the Espionage act of 1917, the offense involves commercial information and not classified or national defense information (Wikipedia, 2017). When the act refers to “trade secrets”, it follows consistent with the generally accepted legal definition meaning all forms and types of financial, business, scientific, technical and data.

While the EEA was not intended to criminalize every theft of trade secrets, it was passed due to the recognition of the increasing importance of the value of intellectual property, and initiating prosecution would depending on the scope of the criminal activity, degree of economic injury, and type of trade secret misappropriated, among other factors (Wikipedia, 2017). The act can be used to not only protect an organizations intellectual property by prosecuting competitors who steal a company’s trade secrets, but it can also be used against a company that happens to find itself in possession of trade secrets from their competition.

There have been several cases in which the EEA was used to prosecute someone. One example is the case of the United States v. Yang in which the defendant, Chunlai Yang was indicted for two counts of trade secrets theft for stealing proprietary source code from his employer CME Group Inc., in order start his own future software company. Yang had downloaded over 1000 source code files from the secure company system, moved the files to his personal computer, and intended on using the source code as the backbone for his own company’s system. Although I was unable to find the final judgement, from the description of the case, it was stated that the potential repercussions of his crimes were up to 10 years in prison and a $250,000 fine for each count, in which there were two (“United States v. Yang”, 2017).

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