Industrial Espionage I would really like to talk about politics and what is going on in the political scene now, but I won’t do that because there is too much controversy related to that subject. Instead of politics I am going to talk about industrial espionage. It is a much bigger problem than any of us suspect. We know China is constantly involved in it. The difference between China and a lot of companies which do it is the fact China will do it right if front of you. An example of this was when China purchased a couple of fighter planes from Russia and then proceeded to disassemble them so they could manufacture the planes themselves without regard to patents and copyrights. It was said Russia didn’t want to make any smaller sales to China because they knew what would happen. Russia however is desperate for money and this may make them so anxious to sell weapons they would consider another small sale. China is considering buying the Su-57 but in unknown numbers. There have been quite a few notable cases of industrial espionage. One famous case involved the design of a Gillette Razor. Gillette was developing a new shaving system. A man named Davis was contacted by Gillette to help them design the razor. He was said to have used his position to send confidential engineering drawings of the new razor to the Gillette competitors. He sent the drawings to several famous companies including a foreign company. In 1998 a press release stated Mr. Davis had pleaded guilty to stealing trade secrets. Companies who produce things are constantly worrying about what people in the know might tell others. Sure, there are non-disclosure agreements, but after all they are only documents and the people who do release patented information think no one will know and they will get away with it. Can you imagine what some companies would pay for this sensitive information? Sometimes things which look like they couldn’t be worth much money can be worth a fortune. Take the case of Avery Dennison a manufacturer of different types of glue. The glue they make is used on postage stamps and many other products. A Taiwan business man was arrested because it was found he had paid a Dennison employee over 300,000 dollars for manufacturing and production secrets Avery Dennison had developed. He had a company in Taiwan which sold similar products. He got away with this for over 8 years before he was brought to justice. Avery Dennison stated it had cost them many millions of dollars to develop the stolen procedures. It has been said cyber espionage is causing wealth transfer on a scale here to fore unknown. I know this is bad, but is it any worse than employees selling sensitive information? The thing is it seems like everyone is doing it. When the industrial revolution had started in England, powered machines were introduced. The United States had machines which needed human power to run. An industrialist went to England and worked in a factory for a year and memorized how the machines worked and was able to create these machines here. Clearly this was industrial espionage. When employees move to competing companies, it can mean trouble if they were in a position to know the secrets of the first company. This is what happened when Opel, a division of General Motors has some employees move to Volkswagen. General Motors accused Volkswagen of espionage. This was fought in the courts for over four years and eventually General Motors won the case. Volkswagen agreed to pay General Motors 100 million dollars and buy one billion dollars in car parts. It turns out one of the valuable assets of energy companies is their computerized topographical maps. The reason for this is they contain the locations of oil reserves. In 2009 hackers went to work and stole these maps from Exxon Mobil, Royal Dutch Shell and BP. Here is the thing about industrial espionage, it was just part of business until laws came out to try and stop it. Spies were routinely sent from one business to another to try and steal good ideas about almost anything. If you stole an idea for a process from another company, it was said, good for you and the other guy should have protected his secrets better. The Economic Espionage Act was introduced in the U.S. in 1996. The problem is theft is increasing because of more sophisticated methods becoming available every day. Lately a Chinese company named Huawei has been in the news. The U.S. has accused the company of spying and so have many other companies. This company was supposed to bring faster communications but has been banned in many places. Huawei Technologies is a giant telecommunications supplier. On June 3, 2019 they went on trial for racketeering, and corporate espionage among other things. The United States felt there were grave security concerns with using equipment from this company and so did many of our allies. Newsweek ran a headline for an article which stated China involved in 90 percent of espionage and industrial secrets theft, Department of Justice Reveals. I think the headline says it all. When a non-Chinese company deals with a Chinese company, they could be at risk. The story states the headline deals with the years 2011 to 2018. One company in China named the Sinovel Wind Group was cited as stealing technology from a U.S. company which cost our company more than one billion dollars in equity and the loss of 700 jobs. There were other similar cases stated in the article. One question is asked often, how can a company protect itself from this type of thing? I have always said if we are talking about computer security, never put any secrets on a computer which has an internet connection. No matter how secure it is said to be, it may be eventually subject to hacking. If it is not on the internet than the only way data can be stolen off of it is by someone directly going to that computer and manually downloading the data to a device. A company has to know what is their most valuable secrets and protect them accordingly. They need to put effective security policies in place. Employees who have access to sensitive data should have a complete background check. There should be secure infrastructure. The most secret data should be in the most secure area. Employees should be educated to the fact not to discuss company procedures and made to sign non-disclosure agreements. Data should be protected by very strong passwords. When employees leave the company, it should be made clear to them they are not allowed to talk about company secrets under penalty of law. Areas where company secrets are being held should be under constant surveillance. Finally, there should be alarms set if someone is able to break into devices containing company secrets.
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