Running head: Trade Secrets

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Introduction Economic espionage occurs when an individual knowingly shares sensitive information that may lead to financial loss or loss of a comparative advantage of the owner. Trade secrets are a form of information, formula, procedures, techniques, or prototypes that the owner has taken reasonable efforts to protect. Trade secrets have an independent economic value regardless the form they are. Economic espionage is commercially motivated. A company, individual, or government uses illegal tactics to gain commercially valuable information about a competitor. Most economic espionage involves an employee in a company bribed by a competitor to share sensitive information. The increased use of the computer and the Internet makes computer hacking another common economic espionage. In extreme cases, a competitor may hire a gang to break into the rivals premises to steal or destroy information.
Trade secrets There are many methods used to gather information about rivals. Some of the methods are legal, whereas others are not. A rival may use information available in the newspaper, company reports, patent applications, and the Internet to collect intelligence regarding the activities and plans of a company. The use of unethical methods to achieve competitive advantage is on the increase. Since 1985, economic espionage on American companies has increased by 260%. In most of the cases, the aim of the espionage is to steal information without detection, however, sometimes the aim is to destroy the information and slow the progress of the company (Curtis, & McBride, 2012). Economic espionage largely involves the stealing of trade secrets without detection. The few cases available account for the unsuccessful attempts in which the spies and untrustworthy employees were caught. The organization that experiences economic espionage suffers negatively in a number of ways. The company stands to lose economically. This is because the company has spent millions of dollars to develop an innovation or collect some market intelligence data. The organization loses the competitive advantage it would have because of the information. The recipient organization is at par with the rival and in some instances at a better position. When the espionage goes undetected, the organization is at a disadvantage because the rival may implement the other company’s strategy before they do (Charles, 2013). The Economic Espionage Act (EEA) of 1996 aims at ending the economic espionage happening both domestically and internationally. According to the EEA, not every theft of trade secrets amounts to an economic espionage. For a theft of trade secrets to amount to an economic espionage, it must meet certain requirements. The trade secrets must be termed as intellectual property or something falling in the same category. A recent amendment to the EEA ensure that both economic espionage and misappropriation of trade secrets amount to a crime. The Silicon Valley is the most targeted areas concerning economic espionage. Economic espionage threatens the success of organizations that relies on information for their success and competitive edge (Curtis, & McBride, 2012). Economic espionage is divisible into two groups. In one the intellectual property is stolen. This is the most common and results in losses to the victim. The second is the destruction of the intellectual property. The rival does not possess the intellectual property but is liable to prosecution because the EEA includes sabotage as part of the definition of economic espionage (Department of justice, USA, 2013). In most of the cases of economic espionage, a foreign entity or individual is involved. After the trade secret theft, the spy often crosses the border to a safe place. The border search authority is valuable in helping bring these people to justice. The border authority keeps track of arrivals and departures of people involved in economic espionage. When an individual attempts to flee the country, border authority has the mandate to seek this person and arrest him. The authority has only jurisdiction within the United States boundaries. The search of the individual is only within the boundaries and only a special class of agents can conduct the search. With globalization and technological advances, economic espionage involving foreign entities will only increase. The border authority has helped bring a number of perpetrators to justice (Nasheri, 2004). Economic espionage is a factor in the modern high stakes aggressive business world. Every organization possesses trade secrets that their rivals may find resources. Trade secrets do not include only intellectual properties; they also include client lists, research reports, and management structures. At stake is profits, jobs, the survival of the organization, and national security. When a possible economic espionage is detected, the organization officials should advance with care and only divulge the information on a need to know basis. To ensure this does not happen again the organization should secure all their confidential information. They should consider changing the locks, passwords, and other electronic coding that protect their information. They should revisit the list of those with access to sensitive information and consider limiting the number. It is advisable that economic espionage and trade secret theft matters are solved privately away from the press to protect the secrets and avoid exposing vulnerabilities (Salinger, 2005).
Conclusion
It is important for an organization to protect against economic espionage. Organizations also have the responsibility of ensuring they do not acquire information through inappropriate means. Under the EEA, an organization or individual is liable to prosecution for receiving information that is acquired through illegal means. Organizations have contracts with their employees barring them from seeking employment in other similar organizations. The law may limit the effectiveness of this contract as it infringe on the rights of the employee. Organizations have a role to ensure that new employees do not divulge trade secrets of their previous employers. This they can ensure through contract agreements.
References
Charles Doyle. (2013). Stealing Trade Secrets and Economic Espionage: An Overview of 18 U.S.C. 1831 and 1832. CRS Report for Congress. Congressional research service.
Curtis, G. E., & McBride, R. B. (2012). Proactive security administration. Upper Saddle River, NJ: Pearson Education, Inc.
Department of justice, USA. (2013). Economic espionage and trade secrets theft. Retrieved from: http://www.justice.gov/usao/eousa/foia_reading_room/usab5705.pdf.
Nasheri, Hedieh. (2004). Economic espionage and industrial spying. Cambridge, Cambridge University Press.
Salinger, L. M. (2005). Encyclopedia of white-collar & corporate crime: A – I, Volume 1. Thousand Oaks, CA: SAGE.