October 19, 2021

Safeguard Your Company’s Intellectual Property

Innovation in science, technology, engineering, and other areas moves fast. There has never been a more important time to safeguard your company’s trade secrets—especially as most companies have at least part of their workforce operating remotely, which can potentially expose your company’s sensitive information to security shortfalls.

While the Economic Espionage Act (EEA) exists to help deter would-be data thieves, the law alone cannot ensure your company’s trade secrets are secure. Taking the right steps to improve both cybersecurity and physical data security is critical to protecting your trade secrets. This article examines the EEA and the steps you can take to help protect your information.

What Is the Economic Espionage Act?

The EEA was passed in 1996 and made spying on private companies and stealing their trade secrets a federal offense. It criminalizes two main types of trade secret theft. First, it covers instances when the culprit steals confidential competitive information to cause company harm or gain an unfair advantage.

Second, the law covers economic espionage, which happens when trade secrets are stolen with the knowledge and for the benefit of a foreign power. Motives for economic espionage often go beyond profit or gain. For example, stolen information may be used to close the technology gap between countries or gain a market share advantage. The federal government estimates that economic espionage costs the U.S. between $225 and $600 billion annually. However, many cases go unreported because afflicted companies do not want to negatively impact their stock value if a breach becomes public.

What Is Considered a Trade Secret?

Under the EEA, trade secrets are any sensitive financial, business, scientific, technical, economic, or engineering information that a company considers private. They can be plans, formulas, designs, prototypes, methods, or processes and take physical, electronic, graphic, photographic, or written form. The economic value of the information stems from the fact that it is not generally known or available to the public.

What Are the Penalties for Violating the EEA?

Penalties for stealing trade secrets include imprisonment for up to 15 years and fines up to $5 million for individuals. Penalties are even greater for organizations.

Who Qualifies for Protection Under the EEA?

To qualify for protection under the EEA, the owner of the information must be able to show they took “reasonable measures” to protect the information. This may include encrypting data, limiting access, following secure document destruction procedures, and other mitigation strategies.

Five Ways to Prevent the Theft of Trade Secrets

Trade secrets can be stolen by people inside and outside of your organization. As such, it’s important to have a multifaceted program for keeping confidential company information safe. Here are a few best practices to consider.

Why Commit to Regular, Secure Document Destruction With Shred-it

Learn more about how Shred-it’s information security services can help your organization protect its information and reduce the risk of trade secret theft.