President Obama announced an initiative to battle international trade secret theft and cyberattacks aimed at U.S. companies yesterday afternoon. According to The Wall Street Journal, “[t]he White House threatened China and other countries with trade and diplomatic action over corporate espionage as it cataloged more than a dozen cases of cyberattacks and commercial thefts at some of the U.S.’s biggest companies.”
“There are only two categories of companies affected by trade-secret theft: those that know they’ve been compromised and those that don’t know it yet,” Attorney General Eric Holder is quoted as having stated at a White House conference Wednesday. “A hacker in China can acquire source code from a software company in Virginia without leaving his or her desk.” This echoes the comments of former Counter-terrorism czar Richard Clarke, who last year said the same thing.
According to The Washington Post, Holder said “the Justice Department has made prosecution of trade-secret theft a top priority. The department is seeking to bring cases of economic cyber-espionage that officials hope will deter foreign governments from hacking U.S. company networks.”
This initiative follows allegations of cyberspying this week by the Chinese military, as well as cyberattacks that were recently directed at The Wall Street Journal, The New York Times and The Washington Post. It hopefully represents a serious effort by the federal government to respond to growing complaints by American companies about the theft of corporate trade secrets by other countries and foreign companies.
According to The Journal, the Obama administration’s strategy, outlined in a 141-page report at the conference, will bring together officials from across the government. New measures are expected to include greater U.S. trade restrictions on products and services derived from stolen trade secrets, efforts to “promote voluntary best practices” by U.S. corporations, and diplomatic pressure to reinforce the administration’s commitment to curbing such thefts.
Perhaps this means that the Administration will throw its considerable weight behind the Protecting American Trade Secrets and Innovation Act (PATSIA), which has been mired in the Senate for nearly two years (a hat tip to Peter Toren, who is quoted in the article in The Post, for highlighting the need for this statute). This an important development within the trade secret community, and I will obviously follow it very closely in the coming weeks.