February 20, 2013
White House Unveils New Strategy Against Trade Secret Thefts
The Obama administration has unveiled a new strategy to help protect American companies from economic espionage and thefts of trade secrets, an issue linked to intensified concerns about cyber espionage.
Trade secret theft and intensifying cyber attacks targeting U.S. industrial and technological sectors are closely intertwined. President Obama says they threaten the U.S. economy and national security.
U.S. companies are estimated to have lost at least $300 billion last year according to a recent congressional committee report.
High level meetings at the White House and across the government led to Wednesday's announcement by Attorney General Eric Holder and other officials of a dramatic escalation against economic espionage.
Holder said the stakes have never been higher.
"In some industries, a single trade secret can be worth millions - or even billions - of dollars. Trade secret theft can require companies to lay off employees, close factories, to lose sales and profits, to experience a decline in competitive position and advantage, or even to go out of business. And this type of crime can have significant impacts not only on our country’s economic well-being, but on our national security as well," Holder said.
Holder said national security impacts include hostile states obtaining data that can endanger American lives, expose energy, financial and other sensitive sectors to massive losses, and leave infrastructure open to attack.
The new strategy aims to increase U.S. engagement and coordination with countries where there are high levels of trade secret thefts; step up information sharing with private companies; and intensify law enforcement and intelligence efforts.
Domestic legislation would be reviewed to improve enforcement, and a public awareness campaign would be intensified about the effects of trade secret theft.
Victoria Espinel is the White House Coordinator for Intellectual Property Enforcement.
"Our status as a global innovation leader is compromised by those countries who fail to enforce the rule of law or international agreements or who adopt policies that disadvantage American companies and American workers including encouraging or tolerating the theft of U.S. trade secrets," Espinel said.
Undersecretary of State for Economic Affairs Robert Hormats referred to some governments or companies "gaming the system" and pursuing "downright illegal" policies to gain competitive advantage.
Protection of intellectual property and trade secrets, he said, remains "a serious and highly troubling issue," one raised consistently at a high level with China.
"Our message is actually quite clear. The protection of intellectual property rights and trade secrets is critical to all rights holders, whether they be from the United States or whether they are for Chinese companies as well or for other companies around the world," Hormats said.
In 2012, President Obama announced establishment of a new enforcement office to challenge unfavorable trade policies, including intellectual property violations and subsidies to favored industries.
White House Press Secretary Jay Carney says President Obama is very concerned about all threats to the U.S. economy and national security.
"It is something that is very much on the president's mind. It is why the president has urged Congress to act appropriately on cyber security legislation and why again today we are calling on Congress to act," Carney said.
Carney said an executive order President Obama signed to bolster defenses in crucial American industries against cyber crime needs to be followed by new congressional legislation.
Cyber security threats were thrust back into the headlines after a Virginia-based cyber security firm (Mandiant) released a report linking attacks to a unit of China's military.
China denied allegations of any high level involvement.