Trade Secret Theft, Industrial Espionage, and the China Threat  book cover
1st Edition

Trade Secret Theft, Industrial Espionage, and the China Threat

ISBN 9781439899380
Published December 10, 2013 by CRC Press
320 Pages 14 B/W Illustrations

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Book Description

Although every country seeks out information on other nations, China is the leading threat when it comes to the theft of intellectual assets, including inventions, patents, and R&D secrets. Trade Secret Theft, Industrial Espionage, and the China Threat provides an overview of economic espionage as practiced by a range of nations from around the world—focusing on the mass scale in which information is being taken for China's growth and development.

Supplying a current look at espionage, the book details the specific types of information China has targeted for its collection efforts in the past. It explains what China does to prepare for its massive collection efforts and describes what has been learned about China's efforts during various Congressional hearings, with expert advice and details from both the FBI and other government agencies.

This book is the product of hundreds of hours of research, with material, both primary and secondary, reviewed, studied, and gleaned from numerous sources, including White House documentation and various government agencies. Within the text, you will learn the rationale and techniques used to obtain information in the past. You will see a bit of history over centuries where espionage has played a role in the economy of various countries and view some cases that have come to light when individuals were caught.

The book supplies an understanding of how the economy of a nation can prosper or suffer, depending on whether that nation is protecting its intellectual property, or whether it is stealing such property for its own use. The text concludes by outlining specific measures that corporations and their employees can practice to protect their information and assets, both at home and abroad.

Table of Contents

China: The Red Dragon of Economic Espionage
Protecting US Intellectual Property Overseas
Background of the Problem
London Speaks Out
What Does China Desire to Be?
The US Stand on the Nation’s Economy
China’s Industrial Espionage
Project 863
Guidance Projects
National High-Tech R&D Program
     Getting the Data
     Economic Collection and Industrial Espionage
A US View—Background of the Problem

We Are Not Alone: Economic Espionage and the World
Examples of Attempts to Obtain Economic Information
Renewed Focus on China

The Background of Economic Espionage
Espionage as a Means of Nation Building

PRC Acquisition of US Technology: An Overview and Short History
The PRC Government Structure
     COSTIND: The CCP’s Use of Corporations for Military Aims
CCP Supremacy over the State, the PLA, and the Economy
Development of the CCP’s Technology Policies
The 863 and Super 863 Programs: Importing Technologies for Military Use
The 16-Character Policy: "Give Priority to Military Products"
The PRC’s Use of Intelligence Services to Acquire US Military Technology
Overview of Methods Used by the PRC to Acquire Advanced US Military Technology
Acquisition of Military Technology from Other Governments
Joint Ventures with US Companies
Acquisition and Exploitation of Dual-Use Technologies
Front Companies
Direct Collection of Technology by Non-Intelligence Agencies and Individuals
Illegal Export of Military Technology Purchased in the United States
PRC Incentives for US Companies to Advocate Relaxation of Export Controls
China’s Efforts to Assimilate Advanced US Military Technology

Chinese Product Piracy and Counterfeiting
The Film Industry and Pirated DVDs
China’s Loose IP Protection Concerns
IP Theft
IP Rights
The Plight of the Copyright Industries Due to Piracy in China
     The Business Software Industry
     The Motion Picture Industry
     The Entertainment Software Industry
     The Book Publishing Industry
     The Recording Industry
     Congressional Hearings on Chinese Piracy
     Breadth of the Counterfeiting Problem

Who, What, and How China Targets
Targeted Information and Technologies
Methods Used to Conduct Such Espionage
Other Economic Collection Methods
Other Economic Collection Efforts
Case Study of a Chinese Collector
Other Interesting Cases of Chinese Espionage
     Case 1
     Case 2
     Case 3
     Case 4
     Case 5

The China Spy Guide and Open-Source Information
Chinese Intelligence Operations
Chinese Intelligence Collection Organizations
     Chinese Collection Operations
     Chinese Intelligence Collection Trends
Open-Source Collection
     Benefits of Open-Source Information Collection
     The Changing Nature of Open-Source Information
     Traditional Open-Source Assets
     Electronic Databases
     Commercial Imagery
Closing Comments

The Intelligence Cycle and Collection Effort
Defining Intelligence
Collection Disciplines
Computer Intrusion for Collection Operations

Corporate Rivals
Nature of the Information

Sources of Information
Open Sources of Information
Classified Government Information
Paper Shredding
The Direction of the Collection Effort

The Economic Espionage Act
Overview of the EEA of 1996
Elements Common to 18 U.S.C. §§ 1831, 1832
Specification of Trade Secrets
Disclosure Effects of a Trade Secret
Common Issues and Challenges in Trade Secret and EEA Cases
     Primary Objectives
     Three Parts to Trade Secrets
     Intellectual Property Cases

The U.S. Response to Economic Espionage
US Government Awareness
NACIC Background and the Change to the Office of the NCIX
An Expanded Outreach to the Private Sector
No Electronic Theft Act
Militarily Critical Technologies List
Espionage and Illicit Acquisition of Proprietary Information
Policy Functions and Operational Roles
US Government Support to Private Industry
Options for Consideration
CI Community Efforts to Protect Technology

The DOD View of IP Theft: A Trend Analysis of Reporting on Foreign
Targeting of US Technologies
Threat Entities
DSS Key Findings
Targeted Technology Concerns
Overall DOD Concerns—A Summary

Intellectual Property Rights: Patents, Copyrights, and Trade Secrets
Types of Patents
Trademark and Service Marks
     US Trademark Act and Trade Dress
     What Does a Copyright Protect?
Trade Secrets
Trade Secret Protection
China’s IPR Enforcement System

Internet Exploitation: The Web, Your Computer, Your IT System
Federal Information Security Management Act
Sensitive US Internet Traffic Sent to Chinese Servers
China’s Thinking and Capabilities in Cyberspace
The Deterrence Effect on the United States

Protecting Your Data
Espionage and Foreign Travel
Elicitation: What Is It?
     Why Elicitation and What Is Its Appeal to Today’s Spy?
     Elicitation Response
     Your Response
     Tips on Deflecting Elicitation Attempts
Elicitation: An Intelligence Collector’s Viewpoint
Hosting Foreign Visitors
     Host Responsibilities
Long-Term Foreign Visitors
The Technology Control Plan
     Security Reporting Responsibilities
     Espionage Indicators
Protecting Your IP Rights (IPR) in China
     China’s Current IPR Environment
     The Best Protection Is Prevention
     China’s IPR Enforcement System
     What the US Government Can Do in IPR Infringement Cases
About Trade Secrets in China
Strategy Targeting Organized Piracy
Getting Help to Protect Your Rights
Your Knowledge of Methods Used in Economic Espionage
     Unsolicited Requests for Proprietary Information
Espionage Indicators
     Inappropriate Conduct during Visits
     Suspicious Work Offers
     Exploitation of Joint Ventures and Joint Research
     Acquisitions of Technology and Companies
     Co-opting of Former Employees
     Targeting Cultural Commonalities
The Bottom Line for Protecting against Threats
Security Precautions as a Business Enabler

Source Documents and Other Resources
Appendix A: The Dongfan "Gregg" Chung and Chi Mak Economic Espionage Cases
Appendix B: Economic Espionage Killed the Company, The Four Pillars Enterprise Case
Appendix C: Summary of Major US Export Enforcement, Economic Espionage, Trade Secret, and Embargo-Related Criminal Cases, 2007 to the Present
Appendix D: Special 301 Report, China

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Carl A. Roper is a retired government official who—as a Security Specialist with the Department of Defense Security Institute (DoDSI)—was a lead instructor providing general and specialized security training across the spectrum of government agencies and industry. He developed the DoDSI Risk Management course and was instrumental in enhancing other courses. Mr. Roper is also a retired U.S. Army Counterintelligence Special Agent. As a professional author, he has written numerous magazine articles and security books. He holds a BA from The American University, Washington, D.C., and an MSA from Central Michigan University, and is currently a Security Consultant and Trainer.