Panel pushes for tougher U.S. response to trade secret threats

The Commission on the Theft of American Intellectual Property has recently stated that U.S. responses have not kept up with the extreme growth of trade secret theft by both cyber and traditional methods. It has been estimated that theft of trade secrets, mainly by China, costs the United States economy $300 billion per year. Beyond the economic losses, the United States also loses millions of jobs each year to IP theft. “The scope of the problem requires stronger action, involving swifter and more stringent penalties for IP theft,” said the non-partisan commission’s report, compiled by former senior government, military and industry leaders.

The commission recommends that intellectual property thieves should be hit with penalties such as banking sanctions, bans on imports, and blacklisting in financial markets. “The banking systems has a very well-developed system of denying the ability to change money for companies and other organizations that either support terrorism or are involved in drug activities,” said former U.S. Director of National Intelligence Dennis Blair, a co-chairman of the commission. While the commission reported that China accounts for between 50 and 80 percent of intellectual property theft, India and Russia have been cited as other problem countries. The commission recommends stronger protections to make valuable U.S. data less vulnerable to thieves, as well as the institution of measures such as “water marking” and “beaconing” that allow companies to identify stolen files and make them unusable.

Interestingly, the commission’s report says that intellectual property stolen via the Internet is only a portion of theft, and much trade secret theft occurs the “old-fashioned way” through copied or stolen hard drives, bribing or planting of employees, tapping of phones, pirating of software, and the reverse engineering of products.

Sources: http://www.reuters.com/article/2013/05/22/usa-china-theft-idUSL2N0E328K20130522 http://www.ipcommission.org/report/IP_Commission_Report_052213.pdf

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