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Trade Secret Theft Gets One Year in Prison

Posted in Trade Secrets and Competition

An employee of a Bay Areas executive recruiting firm who left to start his own firm was sentenced to one year in prison after being found guilty of trade secret theft and unauthorized computer access crimes.  David Nosal was a former managing director at Korn/Ferry International and left in 2004 to start his own firm.  He was accused of having his former coworkers download customer lists and other secret information that he used in his new business venture.

A jury found Mr. Nosal guilty of computer fraud and unauthorized downloading of trade secrets last April.  In addition to the sentence of one year in prison, Mr. Nosal was ordered to pay a $60,000 fine and perform 400 hours of community service after his release.  A future hearing will be held to determine the amount of restitution he must pay to his former employer as a result of these crimes.

The Nosal case is an important reminder of the severity of trade secret misappropriation and the potential for criminal liabilities in addition to those remedies sought by a victim of trade secret theft in a civil court.  For more on the sentencing of Mr. Nosal, click here.