Economic espionage (also known as corporate espionage) is the illegal or subversive targeting or acquisition of the following:
● Proprietary economic information
● Proprietary technical information
● Sensitive trade, financial, or economic policy information
One major form of economic espionage is the misappropriation of trade secrets. New York law defines a trade secret as “formula, process, device, or compilation” used in a business to give that business a competitive edge. Misappropriation refers to the acquisition of a trade secret while knowing that it was acquired by improper means. Other activities that qualify as economic espionage are:
● Theft of secret formulas (i.e. recipes, software programs)
● Using patented manufacturing techniques without proper authorization
● Use of hidden surveillance programs such as sniffer bots or keystroke loggers
New York State law imposes different penalties for economic espionage, depending on the nature and severity of the offense. Misappropriation of trade secrets is punishable via injunctive relief, payment of damages caused by economic harm, and in some instances, punitive damages. If any form of digital tampering is involved, a defendant may be charged with Unauthorized Use of a Computer, a Class A misdemeanor punishable by 1 year in prison and / or a fine of up to $1,000.
When is the best time to act?:
Being charged with economic espionage carries serious consequences, especially if the offense is being prosecuted at the federal level. As soon as a person becomes aware that they are under investigation for economic espionage, they need to obtain legal advice from an experienced New York criminal defense attorney.
Bribery, computer trespass, data theft, grand larceny, hacking, industrial espionage, unlawful duplication of computer-related material
Mental disease / defect, false accusation, and proven lack of intent to knowingly commit an illegal act can all be presented as defenses. Some charges can be defended as competitive intelligence gathering as opposed to theft.
Difference between New York State and Federal statutes:
The Economic Espionage Act of 1996 makes it a federal crime to steal or misappropriate a trade secret with the intention of benefiting a foreign government, instrumentality, or agent. The EEA also criminalizes the act of receiving, purchasing, or possessing a trade secret that is known to have been stolen or misappropriated, or even conspiring to do so. Penalties upon conviction include fines of up to $500,000 per offense and imprisonment of up to 15 years for individuals. Defendant organizations face fines of up to $10 million.
High profile/Government cases:
In May 2014, the Department of Justice announced that five Chinese military hackers had been charged with stealing trade secrets and accessing other sensitive or proprietary information online. According to a grand jury indictment, the hackers targeted leading manufacturers of solar and nuclear technology and stole internal communications, trade secrets, and confidential business information for competitive advantage. The defendants- Wang Dong, Sun Kailiang, Wen Xinyu, Huang Zhenyu, and Gu Chunhui- are officers in Unit 61398 of the Third Department of the Chinese People’s Liberation Army (PLA). A recent government report revealed that cyber intrusions from China have compromised more than 40 Pentagon weapons programs and approximately 30 other defense technologies.