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Although businesses are not required to formally register their trade secrets with the government, they stand to lose any of the limited rights they have to enforce their secrets if they’re disclosed or shared without authorization. This can come at a major price; according to recent PwC statistics, the estimated value of trade secret theft in the United States alone can fluctuate from $200 billion to $500 billion annually. Individuals and organizations who steal trade secrets illicitly, however, may be prosecuted under the Economic Espionage Act (EEA). This law targets bad faith stealing, copying, distribution, and misappropriation of owners’ trade secrets. Thanks to a recent 2016 amendment, owners can also leverage the Defend Trade Secrets Act (DTSA), which allow owners to directly sue violators in federal civil courts.

The EEA protects most proprietary processes, plans, methods, and other information and know-how. It specifically applies to economic, engineering, technical, scientific, business, and financial information—so long as these secrets derive actual or potential value from being kept secret, and the trade secret owner took reasonable steps to keep them secret. Although trade secret owners can still sue trade secret thieves under state law, the EEA kicks in to govern criminal trade secret theft, misappropriation, and other bad faith acts involving trade secrets that occur across state or federal borders. Section 1332, which addresses theft of trade secrets, criminalizes activity that occurs when someone misappropriates trade secrets with the intent of injuring the owner for the benefit of another party. Section 1331, on the other hand, penalizes defendants who steal trade secrets for the benefit of a foreign government or an entity that’s closely tied to one.

Violators can face severe sanctions under the EEA, including prison time. For theft of trade secrets, individuals in can face up to $250,000 in fines per incident or prison terms of up to 10 years. Companies and entities, on the other hand, could be liable for up to $5 million per criminal count. If the defendant made a pecuniary gain off of the theft at issue, or the theft caused a party other than the defendant to suffer a pecuniary loss, he, she or it could be fined up to twice the gross gain or twice the gross loss so long as it doesn’t complicate or slow down sentencing. Penalties for disclosing trade secrets to foreign entities is more severe; individuals can face up to 15 years of prison time and $5 million in fines per violation, while businesses and entities could be fined either up to $10 million o per violation or up to three times the trade secret’s value. Although the EEA is enforced by prosecutors, trade secret owners can still sue perpetrators directly for attorneys’ fees, equitable remedies, and damages. They can also request injunctive relief and civil sanctions under the DTSA.

In order for prosecutors to step in to advance criminal charges for trade secret theft—and to take advantage of the DTSA’s new civil remedies—you’ll have to demonstrate that you’re taking reasonable steps to keep your trade secrets secret. Abacus Private Cloud can help you achieve this by incorporating multifactor authentication, 256-bit AES encryption, advanced user access controls, and more to help you achieve this.

Contact us to see how Abacus Private Cloud can help secure your trade secrets.