By: Vanessa Roberts Avery and Thomas J. Rechen
If your business suffers a trade secret violation, you may think, “No problem. I’ll call the authorities and they’ll handle these criminals.” Not so fast.
It’s true that violating laws protecting intellectual property, technology and the computer systems in which this information is generated and stored risks criminal prosecution. But these offenses are infrequently prosecuted and, when they are, the prosecutions are too often lengthy, complex and certainly beyond your ability to control. So businesses often must depend upon their own resources and the civil courts to right these wrongs.
Take, for example, a theft (or, “misappropriation”) of trade secrets. The Economic Espionage Act of 1996 makes it a crime, punishable by a fine of up to $5 million, to steal a trade secret, copy or transmit it, receive or buy it knowing it has been stolen and to act in concert with others. But in order to prosecute these crimes the government must first investigate the facts through the deployment of significant limited resources, including money, attorneys, agents and other personnel from the U.S. Attorney’s Office, FBI, other federal investigative agencies and state and local law enforcement partners. If a grand jury is empaneled, federal prosecutors must convince the grand jury to hand down an indictment authorizing a criminal prosecution in federal court where a jury of the alleged offender’s peers will decide whether a crime has been proven beyond a reasonable doubt. The difficulty of meeting that high burden is especially pronounced in cases involving intellectual property, financial crimes and cybercrime.
Contrast the hurdles inherent in a criminal enforcement with those encountered in our civil courts. The strength of the case usually can be investigated by the business’ own IT
department with the assistance of experienced counsel and a third-party computer forensic examiner. If the evidence shows a likelihood of success on the merits, the business owner can march immediately into court seeking temporary and permanent injunctive relief and damages—including damages designed to deter future abuses. There is no need for a grand jury, and the burden of proof will be a fair preponderance of the evidence, not the higher beyond-a-reasonable-doubt standard. The Connecticut Uniform Trade Secrets Act and the federal Defend Trade Secrets Act afford a full range of civil remedies — injunctive relief, actual damages, disgorgement of the offender’s profits (if any) not already accounted for in determining an actual damages award and, where the court finds willful and malicious misappropriation, treble damages and recovery of attorneys’ fees.
The laws governing computer crimes are quite similar.To be sure, there are criminal penalties under Connecticut’s Computer Crimes statute, but Connecticut’s Civil Theft Statute, together with the Computer Fraud and Abuse Act, provide a full range of adequate and punishing civil remedies under a lesser burden of proof.
So be prepared should you have to pursue your business theft claims yourself. Have a capable IT team, a system in place to monitor the movement of documents and emails, and an investigative team, including counsel, ready to launch should you suspect trade secret or computer theft. Because just as a business must consider a variety of factors in determining whether to pursue a civil case involving trade secret, technology-based or other computer crimes, prosecutors must likewise weigh the costs, risks and potential
gains in deciding whether, when and under what circumstances they will prosecute a case. Communication and cooperation between investigatory authorities and business owners is important to ensure that a potential criminal investigation is not compromised. But knowing that a civil action can provide compensation for business losses and steep penalties for defendants, with a less stringent burden of proof may make the deterrent effect of a civil case a more attractive and reliable option.
