NCJ Number
91433
Journal
Security Management Volume: 27 Issue: 9 Dated: (September 1983) Pages: 59-65,67-68
Date Published
1983
Length
9 pages
Annotation
No Federal law specifically protects trade secrets, but security departments must rely on related statutes such as the National Stolen Property Act, the Mail Fraud Act, the Conspiracy Act, the Right to Privacy Act, and the Wire Fraud Act. However, inadequacies in both Federal and State codes make convictions difficult.
Abstract
The term 'trade secret' does not appear in the National Stolen Property Act, and trade secrets must fit within the categories of goods, wares, and merchandise. Although Federal courts have classified trade secrets as goods, flaws remain because they are often formulas or processes. The Act also requires proof of the value of the stolen secret, and courts differ on how this value may be established. Finally, the National Stolen Property Act does not protect intangible secrets, nor is there any certainty that it protects commercial secrets, such as marketing, expansion, or production plans. The Mail Fraud Act sets no minimum value requirement and does not require the secret to fall within an accepted definition of goods. Successful prosecution under this statute depends on the ability to show that a scheme of fraud was developed, that the accused played a culpable role, and that the U.S. Postal Service was used to further the unlawful plan. To prosecute under the Conspiracy Act, a security department must prove an agreement existed between two or more individuals or corporations to violate the Federal criminal code and an overt act to further the conspiracy took place. Persons caught planting or monitoring electronic eavesdropping devices may be sanctioned under the Right to Privacy Act. The Wire Fraud Act is most significant in cases involving unauthorized access to trade secrets stored in computers. Of the 21 States who have special laws protecting trade secrets, the majority protect only scientific secrets. In addition, not all States with statutes protect intangible secrets, but only the documents on which the confidential information is stored. Tables and examples of statutes are provided.