Foreign Instrumentality Enhancement
In cases where economic espionage is charged, the Sentencing Guidelines expressly provide for a
two-level enhancement where the defendant misappropriated a trade secret and "knew or intended that the offense would benefit a foreign government, foreign instrumentality, or foreign agent." U.S.S.G. § 2B1.1(b)(5). While the language of the enhancement tracks the economic espionage provision of § 1831, there may be instances where the conduct of the defendant warrants the enhancement contained in § 1832 trade secret prosecutions.
Other guideline factors
Chapter three of the Sentencing Guidelines includes other provisions that may be worthy of consideration, including the defendant’s role in the offense.
The theft of trade secrets often involves a corporate insider who is able to access the trade secret material while at work. In some cases, the insider is able to facilitate and conceal the offense because of a managerial role in the victim corporation which results in less direct supervision and greater deference to the defendant’s actions. In those cases, a two-level enhancement may be appropriate under section 3B1.1, which distinguishes, for example, the case of a bank executive’s fraudulent loan scheme, where the enhancement would apply, from a theft or embezzlement by a bank teller, where it would not.
Similarly, the use of a special skill by the defendant may warrant a two-level enhancement under
section 3B1.1. In trade secret cases, a special skill may include the use of a computer to access protected files in a corporate network or the use of work-related skills that are unusual and necessary for the completion of the offense. See United States v. Lange, 312 F.3d 263, 270 (7th Cir. 2002).
Sentencing in trade secret and economic espionage cases can present unique challenges to the prosecution team, particularly in the area of valuing the trade secret information. While valuation is not an element of proof at trial, it is important to address valuation issues early in the case to explore possible resolution of the case by plea agreement or to address anticipated issues at a contested sentencing hearing.
By identifying the available evidence early in the case, a preferable method of valuation should become clear. Finally, as noted, the § 3553 sentencing factors, when applied to the facts of the case, are an important part of the sentencing recommendation
In cases where economic espionage is charged, the Sentencing Guidelines expressly provide for a
two-level enhancement where the defendant misappropriated a trade secret and "knew or intended that the offense would benefit a foreign government, foreign instrumentality, or foreign agent." U.S.S.G. § 2B1.1(b)(5). While the language of the enhancement tracks the economic espionage provision of § 1831, there may be instances where the conduct of the defendant warrants the enhancement contained in § 1832 trade secret prosecutions.
Other guideline factors
Chapter three of the Sentencing Guidelines includes other provisions that may be worthy of consideration, including the defendant’s role in the offense.
The theft of trade secrets often involves a corporate insider who is able to access the trade secret material while at work. In some cases, the insider is able to facilitate and conceal the offense because of a managerial role in the victim corporation which results in less direct supervision and greater deference to the defendant’s actions. In those cases, a two-level enhancement may be appropriate under section 3B1.1, which distinguishes, for example, the case of a bank executive’s fraudulent loan scheme, where the enhancement would apply, from a theft or embezzlement by a bank teller, where it would not.
Similarly, the use of a special skill by the defendant may warrant a two-level enhancement under
section 3B1.1. In trade secret cases, a special skill may include the use of a computer to access protected files in a corporate network or the use of work-related skills that are unusual and necessary for the completion of the offense. See United States v. Lange, 312 F.3d 263, 270 (7th Cir. 2002).
Sentencing in trade secret and economic espionage cases can present unique challenges to the prosecution team, particularly in the area of valuing the trade secret information. While valuation is not an element of proof at trial, it is important to address valuation issues early in the case to explore possible resolution of the case by plea agreement or to address anticipated issues at a contested sentencing hearing.
By identifying the available evidence early in the case, a preferable method of valuation should become clear. Finally, as noted, the § 3553 sentencing factors, when applied to the facts of the case, are an important part of the sentencing recommendation