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Trading Secrets A Law Blog on Trade Secrets, Non-Competes, and Computer Fraud

Federal Legislation Proposed To Combat Cyber-Espionage

Posted in Cybersecurity, Data Theft, Espionage, Legislation

Cybersecurity has become a growing concern in the United States.  Legislation impacting this topic covers a variety of fields, including national security and defense, trade and international relations, intellectual property, and even privacy and civil liberties.  As technology is constantly changing, so too are the types of restrictions in place.

A group of prominent American Senators recently introduced the Deter Cyber Theft Act, a bill designed to reduce the threat of foreign cyber-espionage and trade secret theft. The bill is a bipartisan effort, sponsored by Carl Levin, John McCain, Jay Rockefeller, and Tom Coburn.  The proposed legislation would create a registry of stolen technology and also provide for punitives for foreign firms attempting to sell products which make use of this stolen technology.  The bill would require the Director of National Intelligence to provide annual reports regarding trade secret theft, and countries and individuals involved in cyber-espionage or trade secret theft. The Director of National Intelligence’s records would also include a list of the worst offenders, as well as the particular technologies targeted by espionage.  Furthermore, the report would list countries and companies which “benefitted from the theft and the action taken by the U.S. government to combat cyber espionage.”  The President would also be required to block those imports that involve the use of stolen American technology or made by “state-owned enterprises of nations on the DNI’s priority watch list that are similar to items identified as being made using stolen technology.”

According to Senator Levin’s official announcement, this act would combat “the theft of valuable intellectual property from U.S. companies, which invest billions every year in research and development, only to be targeted by foreign countries and companies that illegally access valuable data and then use it to compete against American companies and workers.”  Senator McCain adds, “Some foreign governments, businesses and state-owned enterprises are today using cyber-espionage to steal American intellectual property and rob US ingenuity and innovation in order to gain competitive advantage.  This kills American jobs, undermines the competitiveness of our businesses and compromises US economic and national security interests, and it must stop now.”

The introduction of the legislation follows the recent release of a Pentagon report discussing “the links between the Chinese government and military” and recent cyber thefts of American trade secrets.  According to the Pentagon report, these cyber attacks “appear to be attributable directly to the Chinese government and military” and the stolen information “could potentially be used to benefit China’s defense industry, high-technology industries, [and] policymaker[s]“.  China has denied involvement, however, independent forensic evidence has suggested otherwise.  Although the American government has utilized diplomacy to address the Chinese government’s involvement in cyber attacks, hacker occupations continue. 

 A similar bill was recently introduced in the House of Representatives.  The House bill is intended to go after hackers from “offending nations” with “real consequences and punishments.”  The bill was recently introduced to the House of Representatives Intelligence Committee by Representatives Mike Rogers, Tim Ryan and Ron Johnson.   While both bills are still in the early stages, we will continue to keep you updated regarding both bills as they progress through the Legislature.