Faced with the growing theft of U.S. trade secrets, the White House said
on Wednesday it was stepping up diplomatic pressure and mulling tougher
laws to stem the threat to American businesses and security from China
and other nations.
The plan includes working with like-minded
governments to put pressure on bad actors, using trade policy tools,
increasing criminal prosecutions and launching a 120-day review to see
whether new U.S. legislation is needed.
"A hacker in China can
acquire source code from a software company in Virginia without leaving
his or her desk," U.S. Attorney General Eric Holder said at a White
House event to unveil the strategy.
Although the White House
report did not cite China by name, many see the Asian giant as the main
threat. A study released this week by a private security firm accused
the Chinese military of orchestrating numerous cyber attacks against
U.S. businesses, a charge Beijing has denied.
administration said its strategy aims to counter what Holder called "a
significant and steadily increasing threat to America's economy and
national security interests."
"As new technology has torn down
traditional barriers to international business and global commerce, they
also make it easier for criminals to steal secrets and to do so from
anywhere, anywhere in the world," Holder said.
Representative Dutch Ruppersberger, the top Democrat on the House of
Representatives Intelligence Committee, said U.S. companies suffered
estimated losses in 2012 of more than $300 billion due to theft of trade
secrets, a large share due to Chinese cyber espionage.
House report listed 17 cases of trade-secret theft by Chinese companies
or individuals since 2010, far more than any other country mentioned in
U.S. corporate victims of trade-secret theft have
included General Motors, Ford, DuPont, Dow Chemical, Motorola, Boeing
and Cargill. A target company can see the payoff from research
investment evaporate as a result of corporate espionage and lose market
position, competitive advantage and efficiencies.
repeatedly raised our concerns about trade-secret theft by any means at
the highest levels with senior Chinese officials and we will continue to
do so," said Robert Hormats, an undersecretary of state.
Those cases cited mostly involved employees stealing trade secrets on the job rather than cyber attacks.
Espinel, the White House intellectual property rights enforcement
coordinator, said the effort aims to protect the innovation that drives
the U.S. economy and job creation.
Cyber-security and intelligence experts welcomed the White House plan as a first step, but some said much more needed to be done.
got a nation-state taking on private corporations," said former CIA
Director Michael Hayden. "That's kind of unprecedented. We have not
approached resolution with this at all."
The U.S. Chamber of
Commerce, the nation's largest business lobby, offered a lukewarm
statement of support, while other industry groups expressed more
enthusiasm for the effort.
"We strongly endorse and applaud the
administration's focus on curbing theft of trade secrets, which poses a
serious and growing threat to the software industry around the world,"
said Business Software Alliance President and CEO Robert Holleyman.
report that laid out the strategy repeated a 2011 White House
recommendation that the maximum sentence for economic espionage be
increased to at least 20 years, from 15 currently.
Another part of
the solution is promoting a set of "best practices" that companies can
use to protect themselves against cyber attacks and other espionage,
The report also said the U.S. Federal Bureau of
Investigation was "expanding its efforts to fight computer intrusions
that involve the theft of trade secrets by individual, corporate and
nation-state cyber hackers."
In an interview, U.S. Trade
Representative Ron Kirk said the problem of trade-secret theft in China
was a factor in the decisions of some U.S. companies to move operations
back to the United States.
The companies have "had very frank
conversations with the Chinese, (saying) 'You know it's one thing to
accept a certain level of copyright knock-offs, but if you're going to
take our core technology, then we're better off being in our home
country,'" Kirk told Reuters.
© Thomson Reuters 2013