Industrial espionage occurs when a person or party gains access to a company’s information in way that is illegal, unethical, or constitutes unlawful business practices. The term “espionage” is a synonym for the term “spying”. Thus, industrial espionage includes the unlawful observation of company activity, unlawful listening (such as a wiretap), and unlawful access to company information, which all constitutes spying on the company.
Industrial espionage is often called economic espionage or corporate espionage, in order to distinguish it from more traditional forms of national security espionage. Crimes such as identity theft, piracy, and computer fraud often involve some form of industrial espionage, wherein one country spies on another country. The federal and state governments govern corporate through various laws such as the Economic Espionage Act of 1996.
Industrial espionage can occur through a person acting on their own behalf. An example of this is where a dissatisfied employee breaks into company records of their own employer in order to cause damage to the company. The espionage can also occur on behalf of a competitor company. An example of acting on another company’s behalf is where a company hires an employee (or an outside party) to illegally investigate their competitor’s business.
Some common examples of industrial espionage include:
- Breaking into company files or trespassing onto property without proper authorization
- Posing as a worker in order to learn company trade secrets or other confidential information
- Placing a wiretap on a competitor’s phone
- Hacking into computers
- Sending viruses or malware to a competitor’s website
In particular, technology-based companies are prone to industrial espionage issues, especially with regards to novel ideas or technology products. For instance, biotechnology companies, software firms, and automobile companies tend to be the target of corporate espionage. Transferring stolen company property or stolen trade secrets can also be considered espionage
Industrial espionage violations can result in a mix of different legal consequences. For one, civil remedies may be issued by a court, which can include damages awards for lost profits, or an injunction to return stolen property or information. If the culprit has been using stolen trade secrets or copyrighted materials, for profit, the court may also issue a cease and desist order.
In addition to civil consequences, many industrial espionage cases also involve a criminal aspect. This is especially true if criminal activity such as breaking and entering or trespassing is at play. Espionage can also involve a number of different white collar crimes, such as altering company records or conducting insider trading. As such, persons being charged of corporate espionage may also face criminal consequences, such as jail/prison sentences, and/or criminal fines.
Liability may also depend on whether the person was acting out of their own personal initiative, or if they were acting under direct instructions from company authorities.
Industrial espionage is a serious issue and can cause businesses lost revenue and lost opportunities. It can also lead to serious legal consequences for the defendant. You may need to hire an intellectual property lawyer in your area if you need any assistance with industrial espionage or related legal issues. Your attorney can provide you with advice for your particular needs, and can also explain your legal options. Also, if you need to file a legal claim or if you need to appear in court, your attorney can provide you with representation in court as well.