Stop! Thief..? Confidential information, theft and the protection of trade secrets

An increasing number of companies are becoming victims of rogue employees who attempt to take advantage of unauthorised access to business trade secrets or confidential information for their own gain. This is understandably something that companies wish to deter and protect against. However, due to a quirk of English case law, “information” does not constitute “property” for the purpose of the Theft Act 1968 and therefore a person cannot “steal” it. This somewhat counterintuitive rule has the effect that while an individual may appear, with their actions, to “steal” confidential information or trade secrets from their employer, there is a good chance they have not actually committed the crime of theft. 

Instead, there are a number of different civil and criminal regimes and powers that companies may rely on instead to seek redress, such as the Computer Misuse Act 1990 and the common law of confidence (recently bolstered by The Trade Secrets (Enforcement, etc.) Regulations 2018). Victim companies must consider and pursue these different routes to suit the facts of their regrettable situation. 

In this article, the Macfarlanes corporate crime and investigations team explores the above legal issues in more detail and considers the range of options a company has when its confidential information is taken by rogue employees. This is an increasingly common issue that companies face and yet the criminal legal regime for redress in these circumstances can be surprisingly inadequate.