California Bar Journal
OFFICIAL PUBLICATION OF THE STATE BAR OF CALIFORNIA - MAY 2000
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MCLE SELF-STUDY

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Self-Assessment Test
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Answer the following questions after reading the MCLE article on economic espionage. Use the answer form provided to send the test, along with a $20 processing fee, to the State Bar. Please allow at least eight weeks for MCLE certificates to reach you in the mail.

1. At common law, most courts remedied trade secret misappropriation under the doctrine of the implied duty of good faith in regard to commercial dealings.

2. Common law trade secret jurisprudence specifically required that a trade secret possess actual and current economic value in order to receive judicial protection.

3. Prior to the promulgation of the Uniform Trade Secrets Act (UTSA), trade secret law was a subject of both state and federal common law.

4. The UTSA’s definition of “trade secret” broadened the scope of common law trade secret protections by covering those secrets which may possess only potential value to the holder.

5. The Economic Espionage Act (EEA) applies to misappropriation of trade secrets by both governmental and private entities.

6. EEA liability for private entities requries a showing that the misappropriator of a trade secret intended to injure the trade secret holder, or knew that injury to the trade secret holder would occur because of the misappropriation.

7. Individuals found liable under the EEA may be subject to imprisonment of not more than 15 years.

8. The EEA requires that when passing sentence on a proven EEA violation, the sentencing court shall also order forfeiture to the United States of any property constituting or derived from proceeds obtained as a result of the violation.

9. The EEA protects trade secrets from misappropriation even if the owner has not taken any steps to keep the trade secret confidential.

10. Under the EEA, trade secret protection is limited to scientific and technical information.

11. The EEA creates a private right of action for civil litigants involved in trade secret misappropriation actions.

12. Potential criminal liability under the EEA is specifically limited to trade secret misappropriation occurring in the context of dealings between commercial customers and suppliers.

13. Liability for trade secret misappropriation, if proven under the EEA, would likely mean the existence of civil liability for trade secret misappropriation.

14. The EEA, although a relatively new federal statute, has been widely litigated.

15. To mitigate potential EEA liability, a company should advise new employees at the inception of their employment of the EEA’s provisions and the employee’s duty to abide by such provisions.

16. Independent contractors to a company may indemnify the company from EEA criminal liability.

17. The EEA creates a rebuttable presumption that a company’s trade secrets are protected by the statute, meaning that a company need not bother with taking steps to specifically identify trade secret materials as proprietary and confidential.

18. Only companies with foreign subsidiaries need be concerned about potential criminal liability under the EEA.

19. Inadvertent receipt of confidential information does not implicate potential liability under the EEA.

20. Companies should make the EEA a regular subject of employee training, as well as a subject for review by the company’s internal audit function.

CERTIFICATION

This activity has been approved for Minimum Continuing Legal Education credit by the State Bar of California in the amount of 1 hour in legal ethics.

The State Bar of California certifies that this activity conforms to the standards for approved education activities prescribed by the rules and regulations of the State Bar of California governing minimum continuing legal education.