Economic Espionage Act of 1996
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The Economic Espionage Act of 1996 (18 U.S.C. § 1831-1839) makes the theft or misappropriation of a trade secret a federal crime.
This law contains two provisions criminalizing two sorts of activity. The first, 18 U.S.C. § 1831(a), criminalizes the theft of trade secrets to benefit foreign powers; the second, 18 U.S.C. § 1832, criminalizes their theft for commercial or economic purposes. (The statutory penalties are different for the two offenses.)
The Economic Espionage Act, 1996 has extraterritorial jurisdiction where:
- The offender is a U.S. citizen;
- The victim is a U.S. citizen;
- The offence was intended to have, or had, a direct substantial effect in the U.S.
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.
The EEA is a uniquely American law, 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.
For understandable reasons, the US does not publish records of its own indulgence in state-sanctioned industrial espionage. For an assessment of its activity we must turn to authorities such as the European Parliament which in 2000 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 centred on the suspicion that such information was being passed to US firms.
