Orrick Lawyers Author Article on Prosecuting Cybercrimes

New York Law Journal | June.10.2014

​White collar and corporate investigations partners Guy Singer and Mark Mermelstein, and managing associate Mary Kelly Persyn co-authored an article about the need for corporate counsel to scrutinize cases of cyber-secrets theft before referring them for criminal prosecution in the article “Referring Trade Secrets Theft for Criminal Prosecution,” published by the New York Law Journal. An excerpt from the article is included below.

Universal dependence on advanced technology means that intellectual property is the lifeblood of most modern corporations, and its theft is potentially debilitating. Upon discovery of suspected theft, the temptation to seek criminal prosecution under the federal Economic Espionage Act as retribution and deterrence can be overwhelming. But corporate counsel do well to pause, consider carefully, and consult outside counsel with broad criminal law experience before turning to the United States with a criminal referral.
 
Evidence that an employee violated company trade secrets policy or a confidentiality agreement is simply insufficient, without more, to put together a successful criminal referral and prosecution. Outside counsel evaluating possible referrals should note Department of Justice policy requiring "aggravated conduct" in order to prosecute trade secrets theft, including acts like selling valuable trade secrets to the highest bidder; working on a prototype product and then launching a new business based on that product; and accessing company information to fulfill an international contract (not for the employer). Conduct like leaving employ and taking files or data along, may not suffice on its own, to merit criminal prosecution. Other factors that the Justice Department will use to evaluate a case include the "degree of economic injury to the trade secret owner; the type of trade secret misappropriated; the effectiveness of available civil remedies; and the potential deterrent value of the prosecution." Justice Department, U.S. Attorneys' Bulletin 57:5 at 5 (2009), citing USAM Sec. 9-59.100. The question is not whether wrongful conduct occurred, but whether the conduct warrants criminal prosecution.