California High Court Says Theft of Trade Secrets Triggers Jail Time

Getting probation for stealing trade secrets is no longer a cushy deal in California. On Thursday, the California Supreme Court ruled unanimously that the theft of trade secrets worth more than $50,000 can trigger a state statute requiring a minimum county jail sentence as a condition of probation. The ruling arose in a matter involving an electrical engineer charged with the theft of confidential design specifications for computer chips.

X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Getting probation for stealing trade secrets is no longer a completely cushy deal. On Thursday, the California Supreme Court ruled unanimously that the theft of trade secrets worth more than $50,000 can trigger a state statute requiring a minimum county jail sentence as a condition of probation. “To interpret [Penal Code] Section 1203.044 as limited to theft of cash or cash equivalents … would be inconsistent with express legislative intent,” Chief Justice Ronald George wrote for the court in People v. Farell, 02 C.D.O.S. 6171. “As the Legislature’s own statement of intent discloses,” he continued, “that body intended to remedy the perceived relative unfairness arising from the light probationary sentences meted out to white-collar criminals, as well as to provide reliable tools to ensure that victims of white-collar criminals receive restitution.” The ruling reverses the 6th District Court of Appeal, which had held that the relevant state law — also known as The Economic Crime Law of 1992 — applied only to the theft of “monetary property.” Defendant Alejandro Farell had pleaded no contest to the theft of confidential design specifications for certain computer chips on his last day as an electrical engineer at Palo Alto, Calif.’s Digital Equipment Corp. The information was valued at more than $2.5 million, according to Thursday’s ruling. Relying on the Penal Code, Santa Clara County Superior Court Judge LaDoris Cordell suspended the sentence and placed Farell on probation for three years on the condition that he serve three months in jail, minus seven days already served. The appeal court reversed Cordell, saying that the Legislature never intended the statute to apply to anything beyond cash or cash equivalents. The supreme court disagreed. “We note that when the Legislature intends to limit the reach of the law to cash or cash equivalents, it has done so expressly,” George wrote. He also dismissed arguments that the Legislature didn’t intend to include trade secrets under the statute because of the difficulty in determining their value for the purpose of restitution. “Such a conclusion,” George wrote, “would be quite inconsistent with the Legislature’s intent to punish white-collar crime more vigorously than in the past and to provide improved methods for ensuring that victims of white-collar crime receive restitution.” San Francisco Deputy Attorney General George Hindall III represented the state, while Farell’s lawyer was Thomas Nolan Jr., a partner at Palo Alto’s Nolan, Armstrong & Barton.

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]

Trending Stories

 

Featured Product

Global Briefing

A weekly, curated selection of our international content from around the globe, across the business of law, in-house, regulatory, technology and more, with expert insights from our senior editors.

Learn More

More from ALM

 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Privacy Policy

About Us / Contact Us / Site Map / Advertise With Us/ Customer Service / Terms of Service/ FAQ / Privacy Policy

Publications

Law Topics

Rankings

More

Law.com

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.