United States: Pooley's Corner: When Taking Trade Secrets Becomes A Crime

Authored by James Pooley

In the recent lawsuit filed against Uber by Waymo for hiring the head of its driverless car project, what would have been a normal discovery dispute over access to a report suddenly became a lot more complicated when the former Waymo executive asserted the fifth amendment, claiming that forcing disclosure of the document could incriminate him.

Trade secret litigation between companies is common, but criminal charges—or the threat of them—isn't. So how is it that commercial disputes become criminal?

The answer usually is that the trade secret holder believes it has very strong evidence of theft and decides to approach the authorities. If you are located in a state with criminal trade secret laws, you have a choice of reporting to the county prosecutor or going to the FBI or Department of Justice, who operate under the authority of the Economic Espionage Act. In a number of states, and in each of the 93 federal districts, there will be prosecutors and investigators trained in handling technology cases. If yours seems sufficiently serious, they may agree to take it on.

But would you want them to? The answer may not be obvious. Certainly, the advantages of referring your trade secret claim for criminal prosecution can seem compelling. Considering the costs and risks of typical civil litigation, the idea of calling in the resources of the public prosecutor and sitting back to watch them annoy your adversary is attractive. So the first advantage is cost. Even though you will still have to spend time to teach the investigators and prosecutors about your industry and the facts of your case, you will be spared the disruption and expense of pretrial depositions, since the discovery process is very limited. And even if you have your own lawyers monitor and coordinate the proceedings, you stand to save a great deal over what you might have had to spend in regular civil litigation.

Second, the results of a successful criminal prosecution can sometimes get you to a civil settlement quickly and with maximum leverage. If the defendant pleads or is found guilty, that result is binding in a civil case and the only issue becomes the kind of remedy or amount of money that should be awarded. And it doesn't work the same way in reverse. If the defendant is acquitted, the civil case can still proceed and can result in a judgment for the plaintiff. The reason is that the burden of proof (beyond a reasonable doubt) is so much higher in a criminal case. In this sense, using the criminal process is a no risk proposition for the victim.

The third major advantage is speed. Many trial courts are blocked in a logjam of civil litigation, with some cases taking years to get to trial. (Of course, if your case is decided and settled on a preliminary injunction, you can complete the process much faster.) However, the criminal case, unfettered by an extensive discovery process and having special preference on the calendars of most courts, will usually move to a conclusion fairly quickly. And considering the distraction from productive work that usually comes with this kind of case, faster is almost always better.

Fourth, the criminal process gives you a remedy that is usually unavailable in civil litigation: the search warrant. There is always an advantage to seizing evidence before anyone has had a chance even to think about altering or destroying it. And it's hard to imagine a more impressive way to get someone's attention than to be visited by armed law enforcement.

Indeed, one overriding advantage of criminal prosecution is its deterrent effect. Because trade secret theft is infrequently prosecuted, the news will travel fast to other employees, vendors, and competitors who might be inclined to be loose with your data. Unless the prosecution is badly mishandled, it almost doesn't matter what is the outcome of the process. You will be known as having such a serious concern for your rights, that you will call in the police.

So if using the criminal process is such a great idea, why not pursue it in every case? Why bother at all with the expense and uncertainty of civil litigation? To begin with, you may not be able to get the prosecutor to take your case. Even where the authorities are enlightened and enthusiastic about trade secret matters, they want to take on only the ones they can win under the burden of a "beyond reasonable doubt" standard.

But there are a number of potential pitfalls and disadvantages in using the criminal system. First and most important is loss of control. You've passed the ball to the prosecutor, who will now call all the plays. Once you've started the procedure, you can't stop it. Most prosecutors will consider input from the victim in deciding what risks to take or whether to dispose of the case before trial. But even though the prosecutor is a lawyer, you're not the client; the state is. It is the interest of the government in punishing wrongful conduct that controls a criminal case. As a result, the prosecutor has the final say in what happens.

This dimension of the process can be especially frustrating when you want to settle, having achieved your goal of protecting your data. But no matter what agreements, orders, or money the defendant offers, you cannot make the criminal case go away.

Another aspect of this loss of control surfaces when you try to bring or continue a civil suit at the same time that criminal charges are pending. In the typical case of surreptitious misappropriation, you need access to the defendant's testimony and documents to prove your claim. Ordinarily you get this through discovery. But when a criminal action has been filed, many of the records are in the hands of the authorities, having been seized in executing the search warrant. And if you try to take the defendant's deposition, you'll get a refusal to answer based on the right against self-incrimination. In effect, there's nothing more you can do.

Because trade secret theft is not often prosecuted, you face another risk: the police or prosecutor may mishandle the case in any number of ways. This is especially true with technology matters, where sophisticated handling may be required to preserve secrecy or prevent damage to evidence.

Indeed, another drawback to the criminal process is the possibility that the very information you are trying to protect may be even more widely disclosed. Remember that the criminal defendant has a right to a public trial. Sometimes defendants will exercise this right to the maximum, hoping that the risk of further disclosure will convince you to ask that the charges be dropped. Although the judge will normally issue orders limiting access to confidential information, this may precipitate risky confrontations over just how much of your data actually qualify as trade secrets. In deciding these issues, the judge may be affected not just by the defendant's demand for an open trial. If the case is at all newsworthy, the press will be pushing to open the courtroom and get access to the records. And not far behind them may be your competitors.

Finally, remember that the public prosecutor may not be able to achieve your goal of winning the case. The burden of proof is very high, and this fact may allow the defendant to "slip through." In addition, even a very good trade secret case can be lost through lack of resources. There may be few expert witnesses and consultants available to the government to develop the most convincing presentation. In the end, this too is an issue of control: if you want to be able to determine how the case is managed and how vigorously it is pursued, you may have to do it yourself, in the civil courts.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.