Obama to Increase Diplomatic Pressure Against Trade Secret Theft

The U.S. will put diplomatic pressure on countries implicated in thefts of trade secrets and seek stronger international enforcement of intellectual-property protections, according to a government report.

President Barack Obama’s administration pledged to share more intelligence with companies about the countries involved in economic espionage and methods used to steal corporate information, and to study the need for stronger U.S. laws against trade-secret theft.

“Other governments must recognize that trade secret protection is vital to the success of our economic relationships and that they must take steps to strengthen their enforcement against trade secret theft,” according to a document released today outlining the administration’s trade secret strategy.

The trade-secret report was released in Washington by U.S. Intellectual Property Enforcement Coordinator Victoria Espinel.

It comes a day after the computer-security firm Mandiant Corp. said in a report that the Chinese army is probably the source of hacking attacks against at least 141 companies worldwide since 2006.

The trade-secret strategy looks at more than computer-based theft. It says the pace of economic espionage is accelerating through recruitment of current and former employees of companies, as well as cyber intrusions against U.S. businesses, law firms, universities and financial institutions.

While it doesn’t single out China, today’s report cites examples of economic espionage in which corporate secrets were passed to Chinese institutions.

‘Undermining Security’

“Trade secret theft threatens American businesses, undermines national security, and places the security of the U.S. economy in jeopardy,” the document says. “These acts also diminish U.S. export prospects around the globe and put American jobs at risk.”

The administration will intensify efforts to apply diplomatic pressure on countries “where there are regular incidents of trade secret theft” and press them to strengthen enforcement action, according to the strategy document. In trade negotiations, the U.S. will seek agreements for other countries to provide protections for corporate secrets similar to those in U.S. law.

The Director of National Intelligence will oversee increased sharing of U.S. intelligence on trade-secret theft with the private sector, including information on foreign governments involved in espionage and the types of technology targeted, the document says.

Property Protections

The administration will promote voluntary industry best practices on protecting intellectual property, and the Federal Bureau of Investigation is expanding efforts to fight computer intrusions involving trade-secret theft, according to the administration’s strategy.

The separate cybersecurity report released yesterday said computer intrusions from China, mainly directed at U.S. companies, were carried out by a group that is “likely government sponsored” and is similar “in its mission, capabilities, and resources” to a unit of the People’s Liberation Army.

A spokesman for China’s Foreign Ministry, Hong Lei, denied any military involvement and said his department is opposed to computer hacking and has been a victim of attacks itself.

Obama issued an executive order Feb. 12 calling for increased government sharing of information on cyber threats with industry. It directs the government to develop voluntary cybersecurity standards for companies operating vital infrastructure such as power grids and air-traffic control systems.

In his State of the Union address, Obama warned that hackers, including those who are state sponsored, are a national-security threat as well as an economic one.

“We know foreign countries and companies swipe our corporate secrets,” Obama said. “Now our enemies are also seeking the ability to sabotage our power grid, our financial institutions, and our air traffic control systems.”

A recently prepared U.S. secret intelligence assessment, described Feb. 11 in the Washington Post, said the country’s economy is endangered by a massive and prolonged computer- espionage campaign from China.