Saturday, February 23, 2013

Global Impact: US Government Plan to Counter Cyber-Espionage Will Not Work, Corporate Discipline and Training Will

According to EFE, the Obama Administration announced on Wednesday (February 20) a comprehensive strategy to fight industrial cyber-espionage and hacker attacks against trade secrets that infringe on property rights and compromise company secrets.

Attorney General Eric Holder introduced the Trade Secret Protection Strategy at a White House press conference.

COMMENT: It is hardly a secret that several foreign countries have for some time targeted US trade secrets, with the Chinese government being one of the primary initiators of trade theft from US companies. 

Washington’s new approach will reinforce diplomatic action so as to give “clear” signals to other nations that preventing the theft of secrets is the priority of the United States, Robert Hormats, Under Secretary of State for Economic Growth, Energy, and the Environment, said during the White House event.

Although the Federal government invariably steps in to serve as one-stop-shopping for every conceivable problem in the US, the reality is that most trade theft infringement prosecuted under the Economic Espionage Act of 1996 (EEA) and several amendments to it, involve most of the following:
  1. Inadequate corporate background investigations;
  2. Failure to require all employees having access to trade secrets to execute non-compete and non-disclosure statements;
  3. Failure of high-risk companies to administer polygraph examinations;
  4. Deficient computer security protocols, particularly as they relate to laptops; 
  5. Over-reliance on ethnic Chinese, who often believe they have greater allegiance to China, even if they are born in the US or are naturalized US citizens; and
  6. Deficient internal security deterrents which enable non-employees to steal trade secrets, externally or internally.   
 It should also be noted that in examining all prosecutions under the EEA, the majority involve ethnic Chinese.

Although trade secret theft from US companies is estimated to exceed US$200 billion, few US companies take sufficient steps to prevent trade secret theft.

Admittedly, there are diplomatic and legal strategies that the US government can engage in bi-laterally and withing the international community, yet these options are limited and predominantly depend upon aggressive internal security deterrents.   

In essence, just because the Federal government tells all foreign nations that cyber-espionage is a policy priority, doesn't make it so.