RICO and Trade Secret Law: What Businesses Must Know - Hackstaff, Snow, Atkinson & Griess, LLC

RICO and Trade Secret Law: What Businesses Must Know

what is RICO

In 1970, when Congress passed the Racketeer Influenced and Corrupt Organizations Act (RICO), most Americans were familiar with the famous movie mobster Rico Bandello from the film Little Caesar, one of the first “talkies” ever made.  

The Act was cleverly named after the mobster and was initially used to weaken the Gambino crime family. In 1985, the leaders of all five New York City Mafia families were convicted under RICO. Each leader received at least 100 years in prison. 

While RICO has always been associated with mobsters, it has essential and less dramatic uses today. These include a range of business litigation contexts, including protecting trade secrets. 

Seeking Damages Under RICO 

To seek damages under RICO, you must prove that the defendant’s conduct was part of an enterprise and caused injury to your business or property through a pattern of racketeering activity. The Mafia traditionally did this “racketeering activity, from drug dealing to money laundering and extortion. 

RICO’s Connection to Trade Secrets 

In 2016, Congress enacted a law called the Defend Trade Secrets Act, allowing plaintiffs to take action in federal courts when their trade secrets have been misappropriated. In addition, the law specifically amended RICO to add economic espionage and trade secret theft to the list of precursor activities for racketeering. 

It can be challenging, however, to establish a single act of theft as a “pattern of racketeering activity.” For example, what if the defendant steals a client list one time? Does the defendant’s continued use of the client list to steal clients over a period of months or years constitute a “pattern”? 

Generally, courts have said no, but the law continues to evolve. In the future, we are likely to see more RICO cases brought to protect trade secrets. However, that does not necessarily mean that cases will be successful.  

One or two acts that are part of a single scheme may not meet the court’s standards and, even if they make it to the courtroom, may not survive a motion to dismiss. 

Learn More About Your Legal Options to Protect Trade Secrets 

The law around RICO and trade secrets is nuanced. Talking with an experienced attorney is best to learn more about your options. The attorneys at Hackstaff Snow Atkinson & Griess, LLC can help. To get started, call our Denver law firm at 303-534-4317 or send us a message