Civil Remedies For Economic Espionage

• Published date: 16 August 2022
• Subject Matter: Employment and HR, Intellectual Property, Contract of Employment, Trade Secrets
• Law Firm: Azmi & Associates
• Author: Ms Natalia Izra Dato' Nasaruddin, Iris Tang Shu Ni and Gabrielle Lim Wai Yee

Espionage is the practice of using covert means to obtain confidential information from non-public sources.¹ Meanwhile, economic espionage is concerned with the unlawful targeting and theft of critical intelligence, such as trade secrets and intellectual properties.² The value of such information lies in the ability of its owner to exclusively exploit the said information for economic gain. Because there is inherent economic value in such confidential information, a legal framework which protects against economic espionage is, therefore, a necessity.

Once exposed, confidential information can also no longer be made secret, and the owner of such information loses the ability to exploit such information to the exclusion of others. Hence, civil remedies are also necessary to alleviate the losses which may be a consequence of economic espionage. This article will explore the concept of economic espionage and identifies how the laws of Malaysia have attempted to remedy economic espionage.

Economic Espionage in Malaysia

Unlike the United States of America ("the US") and its Economic Espionage Act 1996, there is no specific law in Malaysia which governs economic espionage. However, as economic espionage often involves the use of technology, and is similar to the crime of theft, there are a few pieces of Malaysian legislation which may be referred to in cases of economic espionage.³ Firstly, when economic espionage involves cybersecurity breaches, provisions contained in the Communication and Multimedia Act 1998 and Computer Crimes Act 1997 are relevant.⁴ Secondly, when economic espionage is committed against Malaysia, laws such as the Security Offence (Special Measures) Act 2012 and Prevention of Terrorism Act 2015 may be relevant.⁵

Lastly, as the act of economic espionage is similar to the act of theft, the Penal Code may also be relevant in this case.⁶ However, the abovementioned laws have their weaknesses in that they are incapable of providing adequate protection for economic espionage.⁷ For example, section 378 of the Penal Code defines theft as "whoever, intending to take dishonestly any moveable property out of the possession of any person without the person's consent, moves that property in order to such taking, is said to commit theft". The "movable property" in question also includes the "corporeal property of every description".⁸ Nonetheless, in view of the lack of a statutory definition of economic espionage and the definition of "moveable property"...