United States: Court Upholds One Year In Prison For Theft Of Non-Trade Secrets

A federal district court judge in Chicago sentenced Robert O'Rourke, a former employee of iron bar manufacturer Dura-Bar, to one year and one day in prison last week for stealing trade secrets. Well, not quite. O'Rourke was convicted on February 25 of seven counts of stealing and attempting to steal trade secrets, but moved for a new trial. In her October 11 order, Judge Andrea Wood denied the motion, holding that the trial evidence demonstrated O'Rourke's intent to steal and use trade secrets—even if some of the proprietary information stolen did not actually constitute a trade secret.

O'Rourke resigned from his position at Dura-Bar to join a Chinese competitor as Vice President of Research and Development. On a Sunday just prior to his departure, O'Rourke entered Dura-Bar's facilities and downloaded some of its information onto a personal hard drive. O'Rourke was ultimately arrested by U.S. Customs & Border Patrol Officers while attempting to board a flight to China, hard drive in hand.

In his post-conviction motion for a new trial, O'Rourke argued that he could not be convicted of attempted theft of trade secrets under 18 U.S.C. § 1832 unless the U.S. Attorney proved that the proprietary information at issue actually was a trade secret. The Court disagreed. Drawing parallels to drug busts, the Court held that just as an individual could be convicted for attempting to distribute "sham cocaine" planted by police officers, so too could an individual be convicted for attempting to steal trade secrets—even if they weren't actually trade secrets.

While the one year sentence in this case was below the federal sentencing guideline recommendation, Judge Wood's order may nonetheless encourage a more aggressive prosecution of attempted trade secret theft, particularly as the government continues to focus on China's potential acquisition of U.S. IP and trade secret information.

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