Don’t Be a Victim of Economic Espionage

A California businessman is charged with conspiring to steal secret information from an American manufacturer about a white pigment called chloride-route titanium dioxide, and selling the information to a state-owned company in China. This may sound like the far-fetched storyline of the latest Hollywood thriller, but it is actually a true story that recently played out in federal court in Oakland. Last month, as the judge sentenced the businessman to 15 years in prison for stealing DuPont’s trade secrets, he stated that “a loud message has to go out” to those who would steal from American companies.

Industrial spying is a growing threat to American businesses. Of course, as with any type of unfair competition, companies that become victims of economic espionage may have potential civil remedies, such as claims under the Uniform Trade Secrets Acts and for breach of contract if a non-disclosure agreement is in place. And in particularly egregious cases, criminal prosecution under statutes such as the Economic Espionage Act or the Computer Fraud and Abuse Act might be possible. Nevertheless, not only do these laws amount to locking the barn door after the theft, many countries do not have similar protections. Therefore, as prevention is the key to addressing this growing problem, the businesses best prepared to handle this threat are those that have developed and enforce a careful plan for protecting their trade secrets.