Corporate Espionage, sometimes referred to as Industrial Espionage or Corporate Spying, is a very real and large-scale problem targeting U.S. businesses today, responsible for the loss of hundreds of billions of dollars annually. While this is not a new crime, it is one that has greatly benefitted from the Internet, for reconnaissance, targeting, intelligence collection, and actual theft. The main legal difference between Economic Espionage and Corporate Espionage is the origin and allegiance of the offender. Economic Espionage is committed primarily by foreign governments or agents of that government. Corporate Espionage or Theft of Trade Secrets is committed by a competitor or agent of that competitor.
According to the Economic Espionage Act (Title 18 U.S.C. §1831), economic espionage is (1) whoever knowingly performs targeting or acquisition of trade secrets to (2) knowingly benefit any foreign government, foreign instrumentality, or foreign agent. In contrast, the Theft of Trade Secrets (Title 18 U.S.C. Section 1832) is (1) whoever knowingly misappropriates trade secrets to (2) benefit anyone other than the owner. More commonly referred to as Industrial Espionage.
Why are the losses so high in Corporate and Economic Espionage cases? The offender is stealing more than the actual “widget,” they are bypassing and essentially stealing the hundreds of millions of dollars that were invested in research and development of the “widget.” A great example to illustrate this is the actions of the Chinese and the attempted theft of drought and pest resistant corn seeds. Recently, Chinese nationals were caught digging up cornfields in Iowa to locate these seeds so they could reverse engineer their development, thereby skipping the research and development costs associated with developing the seeds. According to the FBI, China is the perpetrator in 95% of the state sponsored investigations or Economic Espionage investigations. These actions are not limited to foreign governments and foreign actors, they are often initiated by competitors to gain a competitive advantage. These competitors can encompass a wide array or determined collectors, including employees, hackers, subcontractors, vendors, business partners, academia, or information brokers looking to purchase access from your employees. Companies must realize and address this threat before it forces them out of business. As with Foreign Governments, Companies must initiate Corporate Counterintelligence Programs.