Steven Lee Pens Expert Analysis for Law360 on Sentencing Guidelines in Criminal Trade Secret Matters
Atlanta, Ga. (June 29, 2022) - Atlanta Partner Steven H. Lee recently authored an Expert Analysis article for Law360, titled “Recent Trade Secret Cases Show Sentencing Disparities,” which discusses issues related to the U.S. Sentencing Guidelines in criminal trade secrets cases.
Mr. Lee opens the article by explaining that based upon the current legal landscape, the Sentencing Guidelines fail to provide for precise calibration of sentences. He then sets forth examples of sentencing disparities in recent trade secret cases, noting that the Guidelines charge courts with determining sentences based upon a reasonable estimate of the loss that a defendant sought to inflict. Mr. Lee further describes that the “intended loss” analysis depends upon how much loss a defendant intended to impose, regardless of whether the loss actually materialized.
Next, Mr. Lee posits that based upon the Guidelines and related case law, “practitioners should undertake an intensive factual analysis” of communications that the government produces during discovery. He explains, “Are there any emails or text messages that indicate how much financial harm the client (or any co-conspirators, if any exist) intended to cause the victim company? Has the client provided any voluntary statements regarding the goals of his trade secret theft? Additionally, if the client had achieved his goals, how would that have affected the victim company’s finances?”
The article goes on to describe two federal cases in which the courts emphasized that mere evidence concerning development costs of stolen information was insufficient to establish intended loss. Instead, the government was required to establish that the actor purposefully sought to inflict harm upon the victim. Mr. Lee notes, however, that the issue of determining intended loss “has not yet surfaced in multiple courts.” He explains that “additional uncertainty may ensue in trying to calculate loss figures in prospective trade secret cases, because courts are required to exercise discretion in deciding what sentences to impose on defendants, whether within the guidelines range or outside of it.” Accordingly, Mr. Lee recommends that “practitioners would also be best served to present any mitigating evidence to the Court at sentencing, because the Court always has the discretion to sentence outside of the guideline range.” In addition, he provides examples of cases in which courts imposed sentences outside of the sentencing range.
The author ultimately concludes that “the loss calculation in any trade secrets cases is determined on a case-by-case basis as any calculation requires a fact-intensive investigation on the amount of loss the defendant intended to inflict on the holder of the trade secrets. In the world of trade secrets, it particularly comes down to the facts.”
Mr. Lee, who joined Lewis Brisbois earlier this month and recently published a legal alert on the topic of sentencing disparities in trade secret theft cases, serves as vice chair of the firm’s Government Investigations & White Collar Defense Practice. As a former federal prosecutor, he focuses his practice on government and internal corporate investigations and complex litigation matters.