Theft of trade secrets

Trade secrets are a form of intellectual property. According to the law of most U.S. states, a trade secret may consist of any formula, pattern, physical device, idea, process or compilation of information that both: 1) provides the owner of the information with a competitive advantage in the marketplace, and 2) is treated in a way that can reasonably be expected to prevent the public or competitors from learning about it, absent improper acquisition or theft.

In the U.S., intentional theft of trade secrets can constitute a crime under both federal and state laws. The most significant federal law dealing with trade secret theft is the Economic Espionage Act of 1996 (EEA).

Commercial property can include: unpatented inventions, processes and technologies; marketing, pricing, promotion, and distribution data; strategic plans; and internal corporate financial statements. All of these need to be kept secret to avoid offering competitors, domestic or foreign, unintentional help.

In the USA a growing number of states impose criminal liabilities on thefts of industrial secrets, in addition to the practice of awarding civil damages to plaintiffs whose proven proprietary trade secrets are lost through breach of employee confidentiality. Incidences include Japanese and Russian industrial espionage, in addition to the domestic variety endemic in some industries such as toys, fashion and other consumer goods, and in the high technology and computer related sectors.