In our last post, we discussed the main concerns that companies involved in trade secret theft must consider before “calling the cops” and referring the theft to the Department of Justice for investigation. Now, we look at some additional factors that come into play after the decision to report has been made.
Additional Concerns Associated with Referring a Trade Secret Case for Criminal Investigation
The decision to make a referral is an important first step, but how that first step is taken can affect whether it is, in fact, a good idea. A manual from the Department of Justice provides a good starting point—for victims, at least—for figuring out how to report trade secret theft and other intellectual property crimes. But for all parties to trade secret misappropriation, there are considerations beyond those covered in that publication. For example, when communicating with the U.S. Attorney’s office about trade secret misappropriation, it is important for a company and/or its counsel to recognize that such communications are not privileged. Therefore, information sharing must be done very carefully to avoid weakening one’s position in any pending or potential civil litigation, whether a plaintiff or a defendant. A selective privilege waiver agreement may be useful in that situation, but it may not be binding on third parties. For trade secret theft victims, it is also important in such situations to be aware of potential due process concerns raised by the sharing of discovery information between private civil plaintiff attorneys and the U.S. Attorney’s office. For the same reasons, the timing of the referral of a case is also an important consideration. Typically, referring a case before filing a civil lawsuit is a good policy for avoiding allegations of using the threat of criminal prosecution to gain an advantage in litigation, but every situation is unique, and there may be special overriding concerns that counsel otherwise.
Without question, if a company chooses to initiate discussions with the U.S. Attorney’s office, they are well advised to do so with the assistance of a former Assistant U.S. Attorney, or at least a seasoned white collar criminal lawyer. That lawyer will not only know the various potential pitfalls of the process and be able to assist the victim in making case-specific judgment calls; they will also likely have strong relationships in the local U.S. Attorney’s office that may help facilitate a productive, non-adversarial interaction with the office. He/she will know when and how (i.e., with adequate information) to make a referral with the best chance of positive results. Through familiarity with the process and players, such counsel can help ensure the interests of the client—as a victim, wrongdoer, or somewhere in between—are protected. In this case, calling the cops is a lot easier when you speak their language.