Sentencing Disparities Can Lead To Increased Uncertainty For Victim Companies Of Trade Secret Theft

• Published date: 14 June 2022
• Subject Matter: Intellectual Property, Trade Secrets
• Law Firm: Lewis Brisbois Bisgaard & Smith LLP
• Author: Mr Steven H. Lee and Sean Shecter

Atlanta, Ga. (June 13, 2022) - According to recent data, the theft of trade secrets has cost American companies between $225 billion and $600 billion annually. Sadly, restitution awards associated with the prosecution of these thefts have not made victims whole and point towards massive recovery disparities. As such, it is important to have competent counsel who can navigate these complexities when a matter is referred to the federal authorities.

In criminal trade secrets cases, the Sentencing Guidelines do not provide for the "very precise calibration of sentences." Payne v. Tennessee, 501 U.S. 808, 820 (1991). Sentencing disparities in trade secret cases have surfaced across the nation over the last several years. For example, in March 2022, the U.S. Attorney's Office (USAO) in the Northern District of California issued a press release stating that a former CEO of a biotech company was sentenced to 12 months and one day for a trade secrets case exceeding $101 million. In January 2022, however, the USAO in the Northern District of Florida announced that a former certified Florida teacher who conspired to steal content from state certification examinations was sentenced to 10 months, despite the restitution amount only totaling $135,000. Meanwhile, a former General Electric Company engineer was sentenced to 24 months in the Northern District of New York when the restitution amount totaled $1.4 million.

A sentence in a federal criminal case is often determined by "intended loss," a term defined in the United States' Sentencing Guidelines as the "pecuniary harm that the defendant purposely sought to inflict." U.S.S.G. ' 2B1.1 cmt. n.3(A). The Guidelines require only a "reasonable" estimate of intended loss within broad ranges, and the court must provide reasons to justify the estimate. See U.S.S.G. ' 2B1.1, cmt. n. 3(C); id. ' 2B1.1.(b)(1); see also, e.g., United States v. McCarty, 628 F.3d 284, 290-91...