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57 Bus. Law. 25 (2001-2002)
The Revitimization of Companies by the Stock Market Who Report Trade Secret Theft under the Economic Espionage Act

handle is hein.journals/busl57 and id is 43 raw text is: The Revictimization of Companies by the Stock
Market Who Report Trade Secret Theft Under
the Economic Espionage Act
By Chris Carr & Larry Gorman*
INTRODUCTION
Laws not enforced cease to be laws, and rights not defended may wither away.'
The level of trade secret theft appears to have skyrocketed in recent years, and
it includes more capers than the celebrated Amazon.com-Wal-Mart employee
poaching case,2 the improper use of the Sabre computer system by an American
Airlines' employee,3 and the Oracle-Microsoft dumpster diving case.4 Nearly
every major U.S. company now has a competitive intelligence office that is de-
signed to discover the trade secrets of competitors.5 Some firms, such as Motorola,
have intelligence units located around the world.6 The assignments of these units
include scanning for new technologies, poaching employees who have inside
* Mr. Carr is an Associate Professor of Business Law & Public Policy at the California Polytechnic
State University, San Luis Obispo. He is of counsel at the Jencks Law Group, Arroyo Grande, California.
Mr. Carr received his B.A. from the University of Nebraska, Lincoln, his J.D. from the Santa Clara
University School of Law, and his M.A. from the University of California, Los Angeles. E-mail:
ccarr@calpoly.edu. Mr. Gorman is an Associate Professor of Finance at the California Polytechnic State
University, San Luis Obispo. He received his B.S. from Washington State University, his M.B.A. from
Western Washington University, and his Ph.D. from Northwestern University (Kellogg Graduate School
of Management). E-mail: lgorman@calpoly.edu. The authors would like to thank Michael Jencks of
The Jencks Law Group and Dr. Cyrus Ramezani at the Cal Poly-San Luis Obispo College of Business
for reviewing and commenting on previous drafts of this article. The authors also thank Special Agent
Michael Mee of the Federal Bureau of Investigation's Criminal Investigation Division-Financial
Crimes Section (Washington, D.C.) for his invaluable assistance in the preparation of this article. The
authors are also grateful for comments received on this article from seminar participants at the Western
Regional Meeting of the Academy of Legal Studies in Business (Asilomar, California) and the National
Meeting of the Academy of Studies of Business (Baltimore, Maryland). Financial assistance to prepare
and present this article was also received by California Polytechnic State University-San Luis Obispo
and the Cal Poly Foundation.
1. Thomas E. Moriarty, American Educator, quoted in LAURENCE J. PETER, PETER'S QUOTATIONS 290
(1977).
2. See Emily Nelson & George Anders, Wal-Mart, Amazon.com Settle Fight Over Recruitment and
Trade Secrets, WALL ST. J., Apr. 6, 1999, at A2.
3. See Scott McCartney, System Breach is Stirring up Airline Rivalry, WALL ST. J., June 27, 2000,
at B1.
4. See Ted Bridis et al., How Piles of Trash Became Latest Focus in Bitter Software Feud, WALL ST. J.,
July 10, 2000, at Al; see also Brad Stone, Diving Into Bill's Trash, NEWSWEEK, July 10, 2000, at 49.
5. Neil King, Jr. & Jess Bravin, Call it Mission Impossible, Inc.-Corporate Spying Firms Thrive, WALL
ST. J., July 3, 2000, at B1.
6. Id.

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