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As defined in the Economic Espionage Act (EEA) of 1996, the term trade secret refers to all forms and types of financial, business, scientific, technical, economic or engineering information, including patterns, plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programs, or codes, whether tangible or intangible, and whether or how stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing if:

The owner thereof has taken reasonable measures to keep such information secret, and;

The information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by the public.

The owner of a trade secret is the person or entity that has rightful legal or equitable title to, or license in, the trade secret. Before the enactment of the EEA, there was virtually no federal statute that outlawed the theft of trade secrets. Federal prosecutors were limited to using laws such as the Interstate Transportation of Stolen Property Act, the Computer Fraud and Abuse Act, and Mail and Wire Fraud statutes, to prosecute individuals for the theft of trade secrets. Due to the limitations and inadequacies of these laws in prosecuting the theft of trade secrets, it became evident that a new federal statute was needed.


A defendant convicted for violating Section 1831 can be imprisoned for up to 15 years and fined $500,000 or both. Corporations and other organizations can be fined up to $10 million. A defendant convicted for theft of trade secrets under Section 1832 can be imprisoned for up to 10 years and fined $500,000 or both. Corporations and other entities can be fined no more than $5 million.

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