Trade Secret Theft and Criminal Liability

A recent case out of the Northern District of Illinois demonstrates how a fairly common trade secret case can turn into a criminal prosecution and guilty verdict for the defendant. 

United States v O’Rourke, No. 17-cr-00494 (N.D. Ill; October 9, 2019), began like most trade secret and restrictive covenant cases begin: An employee quits, goes to the office shortly before his or her last day, downloads a bunch of the old employer’s files, and attempts to use them in the new position.  This would normally be met with a motion for temporary restraining order followed up with a preliminary injunction hearing. 

In this case, however, the new position was in China.  Unfortunately for the employee, he told his former colleagues about the new position over drinks, which then led to the former employer discovering the improper downloads.  Knowing that possession is nine-tenths of the law (more so when the employee is in China), the employer contacted law enforcement, who then arrested the employee as he was boarding a flight out of the country with the downloaded materials. He was criminally charged, and the jury ultimately convicted him of stealing, downloading and possessing trade secrets, and of attempting to do so. 

Two things make this case unique.  First, the involvement and criminal prosecution of the employee.  It is unusual for law enforcement to involve itself in what is routinely referred to as “a civil matter.”  The fact that the employee accepted a position in China most likely pushed this case into the criminal realm. 

Second, the employee was convicted of attempting to steal, download and possess trade secrets notwithstanding that some of the information was not actually a trade secret. All that is needed to sustain the attempt conviction (as opposed to the completed act) is the employee’s belief that he was stealing, possessing or downloading a trade secret.