The federal government recommended that a technical writer who tried to blackmail his former employer by threatening to sell the company’s trade secrets be sentenced to 41 months in prison.

A federal jury found Stephen Martin Ward guilty of one count of theft of trade secrets at a trial in April.  The secrets related to a US Navy project to build drone aircraft.

Ward was indicted for taking a confidential maintenance manual with him after he was fired from a Boeing Co. subcontractor.  The manual, which cost more than $100,000 to develop, included information that was found by the jury to be secret, including information about the drones’ fuel systems, muffler, and turret.

Ward worked for subcontractor Corsair Engineering Inc. as a technical writer from August to October of 2011.  After he was fired for being disruptive to fellow employees, he told a Corsair executive that he had a lot of confidential company information and that he wanted a “healthy settlement to go away and not make a fuss,” according to federal prosecutors.

Ward also allegedly told a former supervisor that he would leak the information unless a settlement was reached.

Ward then negotiated a $400,000 settlement with Corsair.  He was arrested when he went to collect a $10,000 down payment in exchange for a disc with the stolen data.

Ward reportedly lied when he told federal agents in October that he did not have any drone schematics.  Four days later, he attempted to blackmail Corsair.

As we have reported, criminal prosecution of trade secret theft is an alternative or supplement to civil enforcement of trade secret rights.

Recent criminal cases we have discussed involving theft of trade secrets and other forms of intellectual property include:

If you have questions about seeking a criminal investigation of trade secret theft, contact our office for a free initial consultation with one of our lawyers.

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Leech Tishman’s Intellectual Property attorneys are dedicated to the protection and monetization of your ideas and innovations. Many of our registered patent attorneys have advanced degrees enabling him or her to truly understand the complex technical details of your idea.  Several bring engineering expertise, others molecular biology, manufacturing and business to your trademark, copyright, patent prosecution and litigation and trade secret issues, both domestic and international.

Our clients range from individual inventors, authors and owners of creative works to entrepreneurial enterprises, government entities, mid-sized corporations and Global 500 companies with operations throughout North and Central America, Europe, South Asia, the Far East and Australia.

We have serviced a vast array of industries including automotive, cosmetics, e-commerce, electronics, entertainment, fashion, food and beverage, furniture, internet, manufacturing, networks, optics, publishing, software, technology, toys, and wireless.

We are committed to providing you with strategic counseling and personal attention throughout the entire lifecycle of your project.

We are proud of our longstanding relationships with local innovation communities and enjoy working with entrepreneurs and businesses who wish to protect their ideas and good names.

Please contact us today for a free consultation at (855) UR- IDEAS or (855) 874-3327.

Disclaimer: We fully comply with all laws related to attorney marketing and this posting is considered an advertisement.

Photo Attribution:  "MQ-1 Predator unmanned aircraft" by U.S. Air Force photo/Lt Col Leslie Pratt is in the Public Domain.

 

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IP FAQ: When Does Trade Secret Theft Become a Federal Crime?

by Sheldon Mak & Anderson on August 4, 2014

handcuffsTrade secret theft is generally addressed through civil lawsuits. However, in some cases, the misappropriation of trade secrets can rise to the level of a federal crime. The Economic Espionage Act of 1996 criminalizes trade secret theft committed for personal benefit within the country or for the benefit of a foreign government.

Section 1831 addresses foreign economic espionage and requires that the theft of a trade secret be done to benefit a foreign government, instrumentality, or agent.  The elements of the crime include:

  • The defendant intended or knew his actions would benefit a foreign government, foreign instrumentality, or foreign agent;
  • The defendant knowingly received, bought, or possessed a trade secret, knowing the same to have been stolen or appropriated, obtained, or converted without authorization; and
  • The item/information was, in fact, a trade secret.

Meanwhile, Section 1832 involves the misappropriation of a trade secret with the intent to convert the trade secret to the economic benefit of anyone other than the owner and to injure the owner of the trade secret. The elements of the crime include:

  • The defendant intended to convert a trade secret to the economic benefit of anyone other than the owner;
  • The defendant knowingly received, bought, or possessed a trade secret, knowing the same to have been stolen or appropriated, obtained, or converted without authorization;
  • The item/information was, in fact, a trade secret;
  • The defendant intended, or knew, the offense would injure the owner of the trade secret; and
  • The trade secret was related to or included in a product that is produced for or placed in interstate or foreign commerce.

Of course, prosecutors will not pursue every case that meets the above criteria. As detailed by the Department of Justice, U.S. Attorneys will evaluate evidence of involvement by foreign agents, the type of trade secret involved, the degree of economic injury, the effectiveness of civil remedies, and the potential deterrent value before deciding whether to bring a criminal action.

How Can We Help?

Protecting against trade secret misappropriation should not just be an important priority for the federal government, but for all businesses. To make sure you are protected, contact us today by phone or email to schedule your free 30-minute consultation.


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At Sheldon Mak & Anderson, we recognize that innovation is your competitive edge - and it needs protection. Recognized as one of the country's "Best Law Firms" by U.S. News & World Report and Best Lawyers® –  Sheldon Mak & Anderson has been a leader in intellectual property law for more than 30 years and specializes in patents, trademarks, copyrights, trade secrets, IP litigation, international patent and trademark prosecution, licensing, alternative dispute resolution and green technology. Contact us today for a free initial consultation at (855) UR- IDEAS or (855) 874-3327.

Disclaimer: We fully comply with all laws related to attorney marketing and this posting is considered an advertisement.

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What Constitutes Copyright Infringement?

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In order to answer that question, it must be clear what, exactly, a copyright is. Copyright protects “original works of authorship” fixed in a tangible medium.  This protection is available for both published and unpublished works. Copyright protection exists from the moment a work is created in fixed form. It is automatic. No registration is […]

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Sheldon Mak & Anderson Attorneys Join Leech Tishman

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Sheldon Mak & Anderson, PC is pleased to announce that six of its attorneys have joined the firm of Leech Tishman effective Wednesday, July 16, 2014. Jeffrey Sheldon, Danton Mak and Denton Anderson have joined the firm as Partners, while Laura Lloyd, Douglas Morseburg and Katherine Bond join as Counsel. Katherine Sales will also be making the move to Leech Tishman as a Patent Agent. The […]

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Weekly Roundup July 21 to July 25, 2014

July 26, 2014

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Protecting Trade Secrets Is Crucial To Your Bottom Line

July 25, 2014

Managing your patents, trade secrets, know-how, copyrights and trademarks can make the difference between fortune and failure. Protecting valuable expertise as a trade secret can sometimes be a better choice than seeking patent protection. Following a trade secret protection program prevents competitors from using your information, or know-how, and allows you to own it perpetually. […]

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