This paper presents a law and economics assessment of how the elevation of the theft of trade secrets from civil malfeasance to a felony affects the incentives for both firms and potential thieves. The paper begins with theoretical analysis of the EEA and concludes with an empirical assessment of prosecutions under the EEA. In comparison to penalties used in civil cases, the new incentive of a criminal deterrent to trade secret theft introduces severe consequences, such as incarceration as a form of punishment.4 Additionally, the criminalization of trade secrets plays into the property versus liability debate. When confronted with a theft of trade secrets, a firm must decide whether to seek legal recourse and, if so, whether recourse should be criminal and/or civil. However, the financial damages assessed in EEA criminal cases can be compared to civil cases, and are found to be lower
