Demonstrating trade secret misappropriation in a civil case often turns on the IP owner’s ability to show that it has a protectable trade secret. Yet in the criminal context, the US Government has taken the position that it can establish attempted trade secret theft irrespective of such a showing. In a criminal prosecution of theft, the Government must generally prove beyond a reasonable doubt each element of the offense — including the specific object of the alleged theft. Recent prosecutions involving allegations of trade secret theft and attempted trade secret theft highlight an important deviation from this principle and draw a line between two provisions of the Economic Espionage Act, 18 U.S.C. § 1831 and 18 U.S.C. § 1832.
In United States v. O’Rourke,1 it was undisputed that the defendant took information that he was not legally entitled to from his employer.2 The defendant argued that § 1832 permits prosecution for attempt violations only if a defendant tries and fails to misappropriate actual trade secrets.3 Relying on United States v. Hsu,4 the legislative history of the EEA, and the analogous case law addressing convictions for distributors of sham drugs, O’Rourke held that the Government can pursue attempt charges under § 1832 if the defendant believed the information to be a trade secret, even if the information taken did not constitute a trade secret under the Act.5 The court reasoned that individuals seeking to harm a company and benefit a competitor should not receive a “get out of jail free” card due to their mistaken belief as to the proprietary nature of the misappropriated material.6
Similar issues are arising in United States v. Levandowski,7 as the Government pursues criminal charges of attempted trade secret theft against a former engineer accused of stealing trade secrets related to self-driving cars. In response to a bill of particulars filed by the defendant on November 6, 2019, US District Judge William Alsup has ordered both parties to file a brief outlining their positions as to the level of specificity required by the prosecution when it pursues trade secret theft charges. The prosecution has argued that they have met this threshold by proving that the defendant reasonably believed the information was a trade secret to support the attempt charges.
O’Rourke established that criminal penalties can be imposed for the attempted theft of trade secrets, even if the information does not qualify as a trade secret per 18 U.S.C. § 1839. Levandowski may provide more clarity on level of specificity required by the Government in order to pursue charges of attempted trade secret theft.
If you have any questions about these updates, please contact the authors or the Baker McKenzie attorney with whom you work.
1 United States v. O’Rourke, No. 17-cr-00495, 2019 U.S. Dist. LEXIS 174962 (N.D. Ill. Oct. 9, 2019).
2 Id. at *11.
3 Id. at *8.
4 United States v. Hsu, 155 F.3d 189, 198 (3d Cir. 1998).
5 United States v. O’Rourke, No. 17-cr-00495, 2019 U.S. Dist. LEXIS 174962, *10-11 (N.D. Ill. Oct. 9, 2019).
6 Id. at *11.
7 5:19-cr-00377 (N.D. Cal.).