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FBI
Economic
Espionage
FBI Launches Nationwide Awareness Campaign
07/23/15
Defining the Crime
Theft of trade secrets occurs when someone knowingly steals or
misappropriates a trade secret for the economic benefit of anyone other
than the owner.
Similarly, economic espionage occurs when a trade secret is stolen for
the benefit of a foreign government, foreign instrumentality, or
foreign agent.
Proving the foreign nexus in court is difficult, and cases that start
out as economic espionage often end up prosecuted as theft of trade
secrets. Both crimes are covered by the Economic Espionage Act of 1996,
Title 18, Sections 1831 and 1832 of the U.S. Code.
Industries in the United States spend more on research and development
than any other country in the world. The amount of effort and resources
put into developing a unique product or process that can provide an
edge in the business world is not unsubstantial. But what happens if
someone comes in and steals that edge—a company’s trade secrets—for the
benefit of a foreign country? The damages could severely undermine the
victim company and include lost revenue, lost employment, damaged
reputation, lost investment for research and development, interruption
in production—it could even result in the company going out of business.
It’s called economic espionage, and it’s a problem that costs the
American economy billions of dollars annually and puts our national
security at risk. While it is not a new threat, it is a growing one,
and the theft attempts by our foreign competitors and adversaries are
becoming more brazen and more varied in their approach.
Protect Your Trade Secrets
Any company that has invested time and resources into developing a
product or idea needs to protect it. The FBI recommends the following
methods for economic protection:
- Recognize the threat.
- Identify and value trade secrets.
- Implement a definable plan for safeguarding trade secrets.
- Secure physical trade secrets and limit access to trade secrets.
- Provide ongoing security training to employees.
- Develop an insider threat program.
- Proactively report suspicious incidents to the FBI before your
proprietary information is irreversibly compromised.
Historically, economic espionage has been leveled mainly at
defense-related and high-tech industries. But recent FBI cases have
shown that no industry, large or small, is immune to the threat. Any
company with a proprietary product, process, or idea can be a target;
any unprotected trade secret is ripe for the taking by those who wish
to illegally obtain innovations to increase their market share at a
victim company’s expense.
To raise awareness of the issue, the FBI, in collaboration with the
National Counterintelligence and Security Center, has launched a
nationwide campaign and released a short film aimed at educating
businesses, industry leaders, and anyone with a trade secret about the
threat and how they can help mitigate it. Based on an actual case, The
Company Man: Protecting America's Secrets illustrates how one U.S.
company was targeted by foreign actors and how that company worked with
the FBI to resolve the problem and bring the perpetrators to justice.
Case Examples
- In May 2015, two Chinese professors were among six defendants charged
with economic espionage and theft of trade secrets in connection with
their roles in a long-running effort to obtain U.S. trade secrets for
the benefit of universities and companies controlled by the People’s
Republic of China (PRC). Details
- In January 2015, a computer science engineer was sentenced for
stealing sensitive trade secrets from a trading firm in New Jersey and
a Chicago-based financial firm. Details
- In July 2014, a California man was sentenced to 15 years in prison on
multiple economic espionage-related charges in connection with his
theft of trade secrets from DuPont regarding its chloride-route
titanium dioxide (TiO2) production technology and the subsequent
selling of that information to state-owned companies of the PRC. Details
- In May 2014, five Chinese military hackers were indicted on charges
of computer hacking, economic espionage, and other offenses directed at
six victims in the U.S. nuclear power, metals, and solar products
industries. Details
- In March 2013, a New Jersey-based defense contractor was sentenced
for theft of trade secrets and exporting sensitive U.S. military
technology to the PRC. Details
- In December 2011, a Massachusetts man was sentenced on a charge of
foreign economic espionage for providing trade secrets to an undercover
federal agent posing as an Israeli intelligence officer. Details
- In February 2010, a former Boeing engineer was sentenced to nearly 16
years in prison for stealing aerospace secrets for the benefit of the
PRC. This was the first economic espionage trial in U.S. history.
Details
The Bureau has provided more than 1,300 in-person briefings on the
economic espionage threat to companies and industry leaders over the
past year, using The Company Man as a training tool. But through this
campaign, the FBI hopes to expand the scope of the audience to include
a wider range of industry representatives, trade associations, and
smaller companies and encourage them to come forward if they suspect
they are a victim of economic espionage.
Understandably, companies are often hesitant to reach out for help when
faced with a potential threat of this nature, usually because they
don’t want to risk their trade secrets being disclosed in court or
compromised in any way. But the FBI will do all it can to minimize
business disruption and safeguard privacy and data during its
investigation and will seek protective orders to preserve trade secrets
and business confidentiality whenever possible. The Department of
Justice also has a variety of protections in place to ensure that
sensitive information is protected throughout any criminal prosecution.
Each of the FBI’s 56 field offices has a strategic partnership
coordinator (SPC) whose role is to proactively develop relationships
with local companies, trade groups, industry leaders, and others so
that if an incident occurs, a liaison has already been established. To
report suspected economic espionage-related activity, please contact
the SPC at your local FBI field office or submit a tip at tips.fbi.gov.
See the video here
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