Bug automatically has protection of its trade secrets, which involve confidential issues such as product plans and new designs, any sort of business proceedings, and products under development prior to patent application. Bug does not need to file anything to maintain these rights other than take all reasonable precautions to keep them secret, such as informing employees that these are trade secrets, refraining from making press releases regarding these secrets, and in very sensitive areas they might consider requiring employees to sign confidentiality agreements. These reasonable measures are necessary to validate any later claim that industrial espionage had occured or intellectual property rights had been violated. Bug should obviously also copyright original works in terms of form, and patent original inventions in terms of function. These protections prevent other business from using their technology. Patents for function are valid for about 17 years, while copyright (the "look" of an invention, among other things) is valid for over 75 years. Incidentally, BUG should probably also trademark their logo, to prevent other companies from imitating them and stealing their brand loyalty.
2. The case of Steve
Steve was involved in industrial espionage, which is a tort, and is grounds for a lawsuit. BUG can have a court order WIRETAP to pay damages and may also be able to restrain them from using any of that information in future products or (with a friendly judge) put a stop even to their production of competing lines of products inspired by marketing information they gained. Additionally, as a direct actor in this, Steve is also personally guilty. If he signed non-disclosure forms, he may be sued on those ground in addition to industrial espionage charges. If Steve was tampering ("hacking") with BUG's system, he may face additional charges of computer tampering, vandalism, or maybe even identity theft. If he was directly intstructed to commit these computer crimes, those at WIRETAP who hired him could also face criminal charges.
3. The case of Walter, Steve, and the broomstick
Even though Steve committed a crime, that does not give Walter the right to look him in a closet. As a security guard, Walter did have the right to detain Steve, but only in a public fashion and in conjunction with immediately calling the authorities to intervene. Confining him in private and threatening his life and limb does not constitute legitimate use of force. Because Walter threatened Steve with bodily injury in a situation where he had the power and apparent intent to actually cause harm, Walter is guilty of assault -- this is a serious criminal offense. Additionally, in most states he would also be guilty of so degree of kidnapping or of false imprisonment. These are torts as well as crimes, and Steve could sue for physical or emotional trauma resulting from this experience. Additionally, BUG might be liable to pay fines or be taken up on charges if any of the following could be proven: (a) Walter had been instructed or encouraged by his BUG employers to act in this fashion, (b) the BUG employers had been aware of Walter's actions and failed to make a reasonable effort to intervene on Steve's behalf, - BUG had reason to believe Walter was unstable and violent, and continued to allow him to function in a position where situations like this could arise, (d) BUG had some sort of contract with their security guards providing indemnity in actions taken on the company's behalf.
4. Advice on interstate and international commerce.
My first advice would be to refrain from sending Walter as a sales representative to any country. More seriously, I would advise BUG that they would probably have to consider either choosing a different domain name (such as BUG.net or Bugtechnology.com) or paying the exhorbitant fees asked by the domain squatters. While U.S. courts have generally held that it is illegal to register another company's name as a domain just for the sake of selling it to that company, it is legal for a speculative company to register many "likely" names and then sell them at exhorbitant fees to anyone willing to pay for them. It is unlikely that this company was specifically targetting BUG when it registered the domain name, considering that this is such a common word which could be used for insect or insecticide sites just as easily as for evesdropping sites.
Despite the annoyance of needing a longer domain name, BUG would probably find e-commerce less intimidating than they might expect. Privacy for consumers is relatively easy to protect from online threats with good firewall security and secure servers. Otherwise, BUG should keep customer information from online sources private with the same measures that walk-in or mail-order customers enjoy. (For example, they shouldn't sell email lists to spammers) If BUG were negligent with their online security they could be liable if someone stole customer's private information or identity. However, investing in a good technical security expert should minimize this threat. Email contracts over secure servers are perfectly legal, valid, and binding, if one can verify identity. Identity could be verified by a number of means, such as asking for social security or drivers license numbers and cross-referencing those with the listed name and address. Contracts online are essentially no more difficult to manage as contracts by mail, apart from the technical expertise needed to use the internet.
One thing BUG should be aware of in expanding its overseas market is that different countries have different trademark, patent, and copyright information and different rules concerning surveillance equipment. Anti-dumping laws might also come into effect. They should have a lawyer review any new targetted countries.
5. Shady Town attacks.
BUG could be charged with negligence. BUG was aware that crimes were occuring in their parking lot, and yet they did not take measures to secure the safety of their people. BUG apparently has security guards (unless this was shortly after Walter was fired and no one had replaced him), and they could have set out lights or other surveillance equipment around their facility. The fact that BUG is supposedly a surveillance-equipment company with infamously trigger-happy hired guards (and so might be assumed to have a safe parking lot), the fact that they applied neither guards not equipment to guard the parking lot could be considered negligent. However, there is an obvious set of defenses. BUG has no control over the criminal behavior of others, and cannot be expected to prevent all trespassing and crime. Additionally, they appear ot have installed lights and had hired security guards, which could in court appear to be honest attempts at security. Contributions to the judges' re-election campaign might also help to cast a friendly glow around the fact that Walter was already in the process of detering crime elsewhere (e.g. with Steve) when this occured.
6. Suing Steve & Wiretap
Bringing a successful civil action could be difficult, particularly if the judges considered Steve's confession to be "unfairly prejudicial" since it was coerced from him by Walter. BUG would definitely need to prove that Steve was actually in the employment of WIRETAP at the time he was employed by BUG (it is remotely possible that Walter was a paranoid schizophrenic who had no evidence of a link between WIRETAP and Steve, a conclusion supported by his own illegal activity in assaulting Steve), and that important trade secrets were revealed to WIRETAP by Steve in return for compensation. This would prove economic expionage. Additionally, BUG might seek to prove that WIRETAP engaged in a pattern of racketeeting activity, or that someone involved in such activity had interest or control in WIRETAP. The computer tampering, if it was harmful or required changes to the system, could also warrant damages. Possible actions the court could be asked to take would be to order everyone involved in the activity to divest himself of any interest in WIRETAP and similar business -- in fact, they might even be able to have WIRETAP dissolved or reorganized. Additionally, if any monetary damages were done, BUG could stand to gain three times those damages plus court costs. The strength of their case, quality of their lawyers, and mood of their judge would all be relevant issues.
7. The Fried Detective DoGood.
If DoGood's lawyers could prove that BUG had knowingly left out a safety feature for the sake of cost effectiveness, then BUG could be sued by DoGood for medical costs, lost wages, and pain and suffering. This is a case of product liability tort. This might not stand up if any of the following were true: (a) BUG had not realized that there was any danger to the user before releasing the product, and had only changed the product later. BUG should have issued a recall, however, so this might still result in liability depending on the judge. Likewise, if the judge decided they should have realized and were being ignorant, they could also be held liable. (b)…