Closing Prior Offense Gaps
Until 1996, for a substantial class of cases, prosecutors lacked an effective tool to prosecute trade secret misappropriation either committed for personal benefit within the country or for the benefit of a foreign government. A House report described the inability of prior law to reach this conduct:
The principal problem appears to be that there is no federal statute directly addressing economic espionage or which otherwise protects proprietary information in a thorough, systematic manner. The statute that federal prosecutors principally rely upon to combat this type of crime, the Interstate Transportation of Stolen Property Act (18 U.S.C. § 2314), was passed in the 1930s in an effort to prevent the movement of stolen property across State lines by criminals attempting to evade the jurisdiction of State and local law enforcement officials. That statute relates to “goods, wares, or merchandise.” Consequently, prosecutors have found it not particularly well suited to deal with situations involving “intellectual property,” property which by its nature is not physically transported from place to place. . . . Other statutes on which the government relies to prosecute this type of crime, such as the mail fraud statute or the fraud by wire statute, have also proved limited in their use. The mail fraud statute is only applicable when the mails are used to commit the criminal act and the fraud by wire statute requires proof that wire, radio, or television technology was used to commit the crime.
State laws also do not fill the gaps left by federal law. While the majority of States have some form of civil remedy for the theft of proprietary economic information, either by recognizing a tort for the misappropriation of the information or by enforcing contracts governing the use of the information, these civil remedies often are insufficient.
H.R. Rep. No. 788, 104th Cong., 2d Sess. 6-7 (1996), reprinted in 1996 U.S.C.C.A.N. 4021. The Economic Espionage Act of 1996 was enacted to close these gaps in the law by providing a new tool for
prosecuting the misappropriation of trade secrets in appropriate cases. See Pub. L. No. 104-294, 110 Stat. see also United States v. Hsu, 155 F.3d 189, 194 (3d Cir. 1998) (noting before the Economic
Espionage Act, “the absence of any comprehensive federal remedy targeting the theft of trade secrets, compelling prosecutors to shoehorn economic espionage crimes into statutes directed at other offenses”).
Until 1996, for a substantial class of cases, prosecutors lacked an effective tool to prosecute trade secret misappropriation either committed for personal benefit within the country or for the benefit of a foreign government. A House report described the inability of prior law to reach this conduct:
The principal problem appears to be that there is no federal statute directly addressing economic espionage or which otherwise protects proprietary information in a thorough, systematic manner. The statute that federal prosecutors principally rely upon to combat this type of crime, the Interstate Transportation of Stolen Property Act (18 U.S.C. § 2314), was passed in the 1930s in an effort to prevent the movement of stolen property across State lines by criminals attempting to evade the jurisdiction of State and local law enforcement officials. That statute relates to “goods, wares, or merchandise.” Consequently, prosecutors have found it not particularly well suited to deal with situations involving “intellectual property,” property which by its nature is not physically transported from place to place. . . . Other statutes on which the government relies to prosecute this type of crime, such as the mail fraud statute or the fraud by wire statute, have also proved limited in their use. The mail fraud statute is only applicable when the mails are used to commit the criminal act and the fraud by wire statute requires proof that wire, radio, or television technology was used to commit the crime.
State laws also do not fill the gaps left by federal law. While the majority of States have some form of civil remedy for the theft of proprietary economic information, either by recognizing a tort for the misappropriation of the information or by enforcing contracts governing the use of the information, these civil remedies often are insufficient.
H.R. Rep. No. 788, 104th Cong., 2d Sess. 6-7 (1996), reprinted in 1996 U.S.C.C.A.N. 4021. The Economic Espionage Act of 1996 was enacted to close these gaps in the law by providing a new tool for
prosecuting the misappropriation of trade secrets in appropriate cases. See Pub. L. No. 104-294, 110 Stat. see also United States v. Hsu, 155 F.3d 189, 194 (3d Cir. 1998) (noting before the Economic
Espionage Act, “the absence of any comprehensive federal remedy targeting the theft of trade secrets, compelling prosecutors to shoehorn economic espionage crimes into statutes directed at other offenses”).