Economic Espionage Act of 1996
The Economic Espionage Act of 1996 (Pub. L. 104–294 (text) (PDF), 110 Stat. 3488, enacted October 11, 1996) was a 6 title Act of Congress dealing with a wide range of issues, including not only industrial espionage (e.g., the theft or misappropriation of a trade secret and the National Information Infrastructure Protection Act), but the insanity defense, matters regarding the Boys & Girls Clubs of America, requirements for presentence investigation reports, and the United States Sentencing Commission reports regarding encryption or scrambling technology, and other technical and minor amendments.
Long title
An Act to amend title 18, United States Code, to protect proprietary economic information, and for other purposes.
EEA, NIIPA
National Information Infrastructure Protection Act of 1996
October 11, 1996
- 18 U.S.C. ch. 47 § 1030
- 18 U.S.C. ch. 90 §1831 et seq.
- 18 U.S.C. ch. 227, subch. A § 3552
- 18 U.S.C. ch. 313 § 4243
- 42 U.S.C. ch. 136, subch. II § 13751 et seq.
Enforcement[edit]
Department of Justice policy[edit]
The United States Department of Justice Criminal Division has issued a prosecution policy relating to enforcement of the Act.[1] In general, it states:
Further developments[edit]
Intersection with trade law[edit]
The International Trade Commission has used the EEA's definition of misappropriation to support its enforcement of US trade laws that prohibit "unfair methods of competition and unfair acts in the importation of articles ... in the United States."[18] In Tianrui Group Company Limited LLC v International Trade Commission, the United States Court of Appeals for the Federal Circuit held that the manufacture abroad of products using a process that was developed in the United States, protected under domestic trade secret law, and misappropriated abroad, violated section 337 of the Tariff Act of 1930, 19 U.S.C. § 1337. The ITC therefore had the authority to bar the importation of such products into the United States.[19][20][21]
Scope of trade secrets[edit]
The extent to which trade secrets are covered under § 1832 was expanded in 2012, following the reversal of a conviction in April 2012 by the United States Court of Appeals for the Second Circuit in United States v. Aleynikov.[22] In that case, it was held that the theft of the source code for a proprietary system at Goldman Sachs was never intended to be placed in interstate or foreign commerce. As Goldman had no intention of selling or licensing its system, § 1832 (as it was written at that time) did not apply.[23] The provision was promptly amended on December 28, 2012 with the passage of the Theft of Trade Secrets Clarification Act of 2012, so that it now applies to products or services that are used or intended for use in interstate or foreign commerce.[24] The amendment led to a conviction in United States v. Agrawal.
Expansion of penalties[edit]
On January 24, 2013, § 1831 was amended to increase the maximum fines:
Impact of the Act[edit]
This legislation has created much debate within the business intelligence community regarding the legality and ethics of various forms of information gathering designed to provide business decision-makers with competitive advantages in areas such as strategy, marketing, research and development, or negotiations. Most business intelligence (also known as competitive intelligence practitioners) rely largely on the collection and analysis of open source information from which they identify events, patterns, and trends of actionable interest. However, some techniques focus on the collection of publicly available information that is in limited circulation. This may be obtained through a number of direct and indirect techniques that share common origins in the national intelligence community. The use of these techniques is often debated from legal and ethical standpoints based on this Act.
One such example is the collection and analysis of gray literature. The techniques for developing actionable intelligence from limited circulation / limited availability documents such as selected corporate publications can raise difficult legal and ethical questions under both intellectual property laws and the Economic Espionage Act.
The Society for Competitive Intelligence Professionals provides training and publications which outline a series of guidelines designed to support business intelligence professionals seeking to comply with both the legal restrictions of the EEA as well as the ethical considerations involved. In 1999, the Society of Competitive Intelligence Professionals published its Policy Analysis on Competitive Intelligence and the Economic Espionage Act which explained how the Economic Espionage Act will not affect legitimate competitive intelligence.[27] The National Law Journal of March 29, 2000, reviewed the Policy Analysis and reported that the Policy Analysis' conclusion was that the EEA's "impact on legitimate competitive intelligence would be negligible" and that "nearly four years" after the EEA's passage, "it appears that the [Policy Analysis'] predictions were on target."[28]
The EEA was developed on the basis of a national philosophy that emphasizes a "level playing field" for all business competitors that arose in no small part due to the size and diversity of the American private sector. Many other nations not only lack such legislation, but actively support industrial espionage using both their national intelligence services as well as less formal mechanisms including bribery and corruption. The United States Office of the National Counterintelligence Executive publishes an annual report on Foreign Economic Collection and Industrial Espionage mandated by the U.S. Congress which outlines these espionage activities of many foreign nations.
The United States does not engage in state-sanctioned industrial espionage. In 2000, in response to European concerns, a former U.S. Director of Central Intelligence, James Woolsy, said (in the March 17, 2000 Wall Street Journal editorial) that if there is collection, it's usually focused on bribery by European companies, not on access to technologies. Woolsey said "most European technology just isn't worth our stealing." As DCI, Woolsey testified before Congress that he was reluctant to engage in economic espionage as the endeavor is "fraught with complexities, legal difficulties (and) foreign policy difficulties."
In 2000, the European Parliament voted to carry out an investigation into the international surveillance project ECHELON. That same year the French government also began an official investigation into allegations that several collaborating nations may be using the program for illegal purposes. U.S. Central Intelligence Agency documents had been revealed to the British press, showing that the U.S. has been using the technology to monitor European business communications. The French and European allegations centered on the suspicion that such information was being passed to U.S. firms. The U.S. stated that monitoring was focused on the participation of European firms in supplying foreign WMD (weapons of mass destruction) programs, such as the Iran nuclear program, on evading sanctions in Iran and Libya, and on the bribery of foreign officials, such as French payments to Saudi Defense officials.