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US: Up to Chinese How Cyber Espionage Charges Impact Relations

FILE - A hacker, who requests not to have his name revealed, works on his laptop in his office in Taipei.
FILE - A hacker, who requests not to have his name revealed, works on his laptop in his office in Taipei.
Victor Beattie
— It is up to China to determine how charges of cyber espionage aimed at five Chinese military personnel brought by the United States will affect bilateral relations, a U.S. Defense spokesman said on Tuesday.

U.S. Defense spokesman Rear Adm. John Kirby said at a Pentagon news briefing Tuesday the United States has regular discussions with China at all levels of government about cyber spying, an issue he said Defense Secretary Chuck Hagel brought up during his April visit.  

Kirby said the degree the latest indictments affect that relationship is a decision the Chinese have to make.

"We still desire, from a military perspective, to further grow the military-to-military relationship and to find ways to have a more productive conversation about these very tough issues, and cyber is one of them," Kirby said. "They’ve announced they’ve pulled out of the Cyber Working Group. That’s regrettable. It’s a decision they made. It wasn’t a decision they had to make.

"This is a tough issue we don’t always agree on, but it’s one that we’ve got to keep the dialogue and conversations open on, and the secretary still firmly believes in doing that," he said.

Kirby said the United States has no desire to militarize cyberspace. He said with countries like China, who are active in cyber, Washington wants to have as open and as transparent a conversation about it as possible.

Economic espionage charges

The U.S. on Monday announced it had charged five Chinese military officers with conducting economic espionage against American companies. The Justice Department accused a unit of China's People's Liberation Army of hacking into the computers of U.S. companies working in nuclear technology, solar power and the steel industry.

Beijing has denounced the criminal allegations, the first ever leveled by the United States against a foreign power for cyber crimes targeting American businesses.

China's Defense Ministry accused the United States of having "ulterior motives" and accused Washington of "hypocrisy and double standards."

Wednesday, the state-run Global Times said the allegations come from a country “that spies both at home and abroad.”

It added that the U.S. “has been taking bold steps in cyber espionage” and referred to former National Security Agency contractor Edward Snowden, who publicized classified documents that revealed global U.S. surveillance programs.

Snowden has been charged with espionage and lives in Russia.

The Global Times said those documents show “the U.S. hacked into China’s backbone networks, universities, government departments and other organs.”  It applauded the suspension of the China/U.S. Cyber Working Group and called for further action.

U.S. State Department spokeswoman Jen Psaki, speaking with reporters Tuesday, expressed hope that the next Strategic and Economic Dialogue (SE&D) between the two countries in Beijing in July will go on as planned.

"We’re hopeful that we can maintain a dialogue with China about cyber security and a range of other issues," Psaki said.

When questioned about how cooperative China may be regarding cyber issues, Psaki said, "We believe there are a range of issues we work closely together on. We’ve seen the concerns they’ve expressed. We believe we have a relationship on a range of economic and strategic security issues, and we’re looking forward to the S&ED."

Hackers used email attachments

The Associated Press reported the hacking techniques allegedly used against American companies were not complicated. The hackers tricked employees to open email attachments or click on website links.

Cedric Leighton, a former U.S. Air Force intelligence office and currently a cyber-security consultant, said the American public, as well as government and private sector employees, are still ill-prepared to guard against such hacking techniques.

Leighton said there is a larger problem these types of emails cause, other than getting people to "click on an email link or do something they shouldn't be doing."

"The real problem ... it is also an increasingly common way in which cyber adversaries can gain intelligence on a [computer] network, can use it for a platform for other types of cyber-attacks and, quite frankly, it is a platform they use to steal tons of intellectual property, and it’s a global problem that is crying out for a global response at this point," he said.

Leighton said U.S. companies doing business in China face the possibility of economic retaliation, such as reverse engineering some of their products, making it difficult for them to maintain market share in China.

Reuters News Agency reported firms such as IBM Corp. and Cisco Systems have already seen sales drop as China turns more to internal suppliers.

Leighton, however, said China’s charge of U.S. hypocrisy is ineffective given that U.S. government entities are barred by law from engaging in commercial espionage. He said that distinction does not exist in China.

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by: Truth Seeker
May 21, 2014 11:38 PM
This may be another reason why the White House felt it had to do something now, after Congress so unwisely passed the AIA ("America Invents Act", 2012), which, for the first time in American history, changed America's previously very robust patent laws from a very secure and hack-proof, "first to invent" system, to a totally insecure "first to file" system (like Europe and Japan have)..

So, now there is a great NEW opportunity for (stealthy) cyber-thieves to not only be able to steal U.S. secrets, but also file patent applications on at least some of the technology they acquire through hacking - especially if the target company is unaware that such a theft has occurred and, thereby. fail to quickly apply for patents on any proprietary work (that may still be in progress).

This is because under the AIA, anyone who gets to the patent office first, will be automatically (and irrevocably) be given priority over anyone filing for patent protection later (even if other forms of documentation exist that can establish who the true "first inventor" is/was). So, the AIA could be the "icing on the hacker's celebration cake".

THAT may be part of the reason why the U.S. is starting to "panic" over what increasing cyber-theft could do to the future of American IP, as a result of Congress' enactment of new patent laws, for the sake of "harmonization" with European laws.

The AIA will be particularly bad news for individual inventors, smaller firms and start-ups that don't have the financial resources to closely police cyber attacks aimed at their proprietary information. It is estimated that most companies either never detect such attacks, or only detect them after more than 3 months - plenty of time for cyber-thieves to be the "first to file" for U.S. patents on their bounty (if they chose to).

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