Protecting and promoting national and economic security
The Economic Espionage Act of 1996 advances two primary objectives: the protection and promotion of national and economic security.
First, on the national security side, the statute prohibits the misappropriation of trade secrets with the intent to benefit a foreign government, foreign agent, or foreign instrumentality. See, e.g., Hearing before the House Judiciary Subcommittee On Crime, 104th Cong., 2d Sess., at 13-14 (May 9, 1996) (testimony of FBI Director Louis J. Freeh) (noting the inability of existing law to counter state-sponsored targeting of “persons, firms, and industries in the United States and the U.S. Government itself, to steal or wrongfully obtain critical technologies, data, and information in order to provide their own industrial sectors with a competitive advantage” and that “[c]losing these gaps requires a federal statute to specifically proscribe the various acts defined under economic espionage and to address the national security aspects of this crime”); H.R. Rep. No. 788, 104th Cong., 2d Sess. 4 (1996) (noting “threats to the nation’s economic interest are threats to the nation’s vital security interests”). Second, the statute protects and promotes the nation’s economic security. The United States remains a leader in innovation. Trade secrets constitute important innovation assets that are critical to the U.S. economy and to national security. The statute promotes innovation by rewarding protections to trade secret owners who pursue reasonable means to safeguard their trade secrets, and punishing, in appropriate cases, those who misappropriate trade secretes.
In his Senate testimony, then-FBI Director Louis J. Freeh, a key early proponent and architect of the statute, aptly described the significance of promoting and protecting the innovation process to the economic growth of the United States:
The development and production of intellectual property and advanced technologies is an integral part of virtually every aspect of United States trade, commerce, and business. Intellectual
property, that is, government and corporate proprietary economic information, sustains the health,
integrity, and competitiveness of the American economy, and has been responsible for earning
our nation’s place in the world as an economic superpower. The theft, misappropriation, and
wrongful receipt of intellectual property and technology, particularly by foreign governments and
their agents, directly threatens the development and making of the products that flow from that
information. Such conduct deprives its owners-individuals, corporations, and our nation of the
corresponding economic and social benefits.
Joint Hearing Senate Select Committee On Intelligence and the Senate Judiciary Subcommittee on
Terrorism, Technology, and Government Information, 10-11 (Feb. 28, 1996); see also H.R. Rep. No. 788, th Cong., 2d Sess. 4 (1996) (noting “the development of proprietary economic information is an
integral part of America’s economic well-being”).
The Economic Espionage Act of 1996 advances two primary objectives: the protection and promotion of national and economic security.
First, on the national security side, the statute prohibits the misappropriation of trade secrets with the intent to benefit a foreign government, foreign agent, or foreign instrumentality. See, e.g., Hearing before the House Judiciary Subcommittee On Crime, 104th Cong., 2d Sess., at 13-14 (May 9, 1996) (testimony of FBI Director Louis J. Freeh) (noting the inability of existing law to counter state-sponsored targeting of “persons, firms, and industries in the United States and the U.S. Government itself, to steal or wrongfully obtain critical technologies, data, and information in order to provide their own industrial sectors with a competitive advantage” and that “[c]losing these gaps requires a federal statute to specifically proscribe the various acts defined under economic espionage and to address the national security aspects of this crime”); H.R. Rep. No. 788, 104th Cong., 2d Sess. 4 (1996) (noting “threats to the nation’s economic interest are threats to the nation’s vital security interests”). Second, the statute protects and promotes the nation’s economic security. The United States remains a leader in innovation. Trade secrets constitute important innovation assets that are critical to the U.S. economy and to national security. The statute promotes innovation by rewarding protections to trade secret owners who pursue reasonable means to safeguard their trade secrets, and punishing, in appropriate cases, those who misappropriate trade secretes.
In his Senate testimony, then-FBI Director Louis J. Freeh, a key early proponent and architect of the statute, aptly described the significance of promoting and protecting the innovation process to the economic growth of the United States:
The development and production of intellectual property and advanced technologies is an integral part of virtually every aspect of United States trade, commerce, and business. Intellectual
property, that is, government and corporate proprietary economic information, sustains the health,
integrity, and competitiveness of the American economy, and has been responsible for earning
our nation’s place in the world as an economic superpower. The theft, misappropriation, and
wrongful receipt of intellectual property and technology, particularly by foreign governments and
their agents, directly threatens the development and making of the products that flow from that
information. Such conduct deprives its owners-individuals, corporations, and our nation of the
corresponding economic and social benefits.
Joint Hearing Senate Select Committee On Intelligence and the Senate Judiciary Subcommittee on
Terrorism, Technology, and Government Information, 10-11 (Feb. 28, 1996); see also H.R. Rep. No. 788, th Cong., 2d Sess. 4 (1996) (noting “the development of proprietary economic information is an
integral part of America’s economic well-being”).