US announces strategies to tackle hacking threat

The United States would use diplomatic measures and “trade policy tools” to stop hacking of US companies and stealing of its trade secrets, besides enforcing intellectual property rights (IPR), the White House has said.

Such a move from the Obama Administration comes a day after a report released by private security firm alleged that a unit of the Chinese Army is behind majority of the cyber-attacks against US companies and involved in stealing of trade secrets.

Increasing diplomatic engagement, supporting industry-led efforts to develop best practices to protect trade secrets, prosecution of trade secret theft by foreign competitors and foreign governments, legislations to improve enforcement against trade secret theft and increasing public awareness are the five prone strategies that were announced by the White House to address this increasing challenge.

“The strategies makes it clear the Administration will continue to act vigorously to combat the theft of American trade secrets that could be used by foreign companies or foreign Governments to gain an unfair commercial advantage over US companies,” said Victoria A Espinel, US Intellectual Property Enforcement Coordinator, as the White House released a report on Administration’s strategy on ‘Mitigating the Theft of US Trade Secrets’.

While the overwhelming majority of the cases of theft of US trade secrets is related to China, one of them is related to India.

“On November 14, 2011, Prabhu Mohapatra was arrested on a criminal complaint in the District of Utah (filed on Nov. 10, 2011) charging him with stealing proprietary information from his employer, a Utah scientific company, and providing it to a relative in India who was starting up a competing company,” the report said.

Speaking on the occasion, the Undersecretary of State for Economic Affairs, Robert Hormats, referred to the concerns on IP theft and piracy he raised with the Indian Government during his trip to India recently, as he argued that China is not the only country that poses problem to the US.

“China isn’t the only country. This is a country which does pose serious problems. There are other countries that do it as well. And we’re making a major effort to engage with them and to address the problems that they pose. So this is a broad issue and a major issue of concern as other countries engage in similar kinds of practices,” he said.

“We’re making the same case with these other countries where the threat of IP theft or piracy is very high. And recently, in India on a trip, I described the concerns we have with that country. We’ve had similar conversations with Russia and other countries as well,” Hormats said.

“Just as increasing globalisation will enable American companies of all sizes to benefit from foreign technical experts and research and development activities in other countries, the sharing of trade secrets with entities operating in nations with weak rule of law may expose them to intellectual property losses. Any resulting cost advantages will likely be more than offset by losses in proprietary company information,” the US Trade Representative, Ron Kirk, said.

Hormats said the strategy released adds to America’s international engagement on trade secrets in several important ways.

“First of all, we will enhance and track even more effectively our diplomatic engagement by senior administration officials with any country where there are trade secret problems.

“This will allow senior administration officials to deliver a coordinated message to foreign governments on trade secrets and send a clear signal that significantly reducing trade secret theft is a high priority for the United States,” he said.

The US, Hormats said, will also work with its foreign counterparts to improve legal frameworks in order to provide strong and efficient remedies for trade secret theft victims.

“We will leverage the full scope of our diplomatic resources, what we call our force in the field, which is the US embassies and consulates. We will strive to improve communication and coordination inside of our diplomatic missions and among our diplomatic missions so that they can learn from one another on best practices as well and set forward concrete steps for our embassies and consulates to engage host Governments on trade secret issues,” he added.

Demetrios Marantis, the Deputy US Trade Representative, said that nearly 35 per cent of US GDP comes from industries that rely heavily on intellectual property. These industries account for more than half of the goods it exports by value.

And they support about 40 million good-paying jobs.

The US, he said, is moving in the context of international negotiations.

“We’re working bilaterally on trade secret-related issues with some key trading partners, and we’re also trying to incorporate the protection of trade secrets in the work that we do in non-IT areas like investment,” he said.

Marantis said that the US is currently negotiating the Trans-Pacific Partnership, which is an 11-country negotiation that is seeking to achieve the highest standards in a whole variety of areas.

“One very important innovation that we’re pursuing this year, or pursuing in the context of TPP, is in the area of trade secrets. For the first time ever, the United States is proposing provisions that offer right holders remedies similar to those provided under US law, including criminal penalties and procedures for trade secret theft,” he said.

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