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Industrial espionage: how your intellectual property is stolen

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We have previously discussed what is being stolen and who steals it. This discusses the means by which it is stolen.

The National Counterintelligence Center (NACIC) was established in 1994 to improve US counterintelligence (CI) coordination and cooperation among our CI agencies. The first of NACIC's Annual Report to Congress on Foreign Intelligence Collection and Industrial Espionage was published in 1995 and yearly thereafter. The industrial espionage collection methods section from the inaugural 1995 issue is still one of its unclass best and is often cited by later reports.

Ideological and military adversaries, allies, and neutrals alike target US economic and technological information. The 'friendlies,' in fact, can more successful per dollar expended as they build atop their legitimate access to US information to further their intel targeting. Certain allies such as France, Israel, and the PRC "have infrastructures that allow them to easily internalize high-tech information and utilize it in competition against US firms."

"Practitioners seldom use one method in isolation but combine them into concerted collection programs. Although countries or corporations have been known to turn legitimate transactions or business relationships into clandestine collection opportunities, some of the methods listed are most often used for legitimate purposes. While their inclusion here is not intended to imply illegal activity, they are listed as potential elements of a broader, coordinated intelligence effort."

Here are the basic methods. Were you to canvass your organization, it is most likely that you have been targeted by multiple means either to secure new data or to validate data previously obtained:

Traditional Methods: Espionage methods reserved for collecting national defense information are now being applied to collect economic and proprietary information.

Classic Agent Recruitment: A trusted insider of any rank or station is a superb collector of proprietary or classified information. Those is lower support and clerical ranks can often better access information without alarm.

US Volunteers: Thieves can be found anywhere where greed, money problems, drugs, alcohol, and personal stress are present.

Surveillance and Surreptitious Entry: Economic and industrial espionage can be a simple break-in or bag op where information or an information appliance is stolen over property.

Specialized Technical Operations: Higher order intrusions against computers, telecommunications, and private-sector encryption weaknesses "account for the largest portion of economic and industrial information lost by US corporations."

Economic Disinformation: Disinformation campaigns are used to "paint foreign competitors or countries [such as the US] as aggressive and untrustworthy" and so scare away domestic companies and potential clients from dealing with US companies."

Other Economic Collection Methods: Tasking foreign students in the US studying or working as an assistant to an individual in a targeted field.

Tasking Foreign Employees of US Firms and Agencies: Direct recruitment by a competing company or non-intel government agency, no intelligence service involvement, for its R&D effort.

Debriefing of Foreign Visitors to the United States: Active debriefing of one's citizens after foreign travel.

Recruitment of Emigres, Ethnic Targeting: Repatriate émigré and foreign ethnic scientists as technology transfer, appealing to patriotism and ethnic loyalty.

Elicitation During International Conferences and Trade Fairs: Concentrated groups of specialists on a specific topic offer opportunity to target individuals while they are abroad. Recruitment may also occur with follow-up when persons return to the US.

Commercial Data Bases, Trade and Scientific Journals, Computer Bulletin Boards, Openly Available US Government Data, Corporate Publications: Open-source collection of legally and openly available competitive information in the US. Valuable in its own right, can hone more illegal search efforts.

Clandestine Collection of Open-Source Materials: Groups or agencies that are monitored by US CI attempt to obscure their interest in specific open-source materials.

Foreign Government Use of Private-Sector Organizations, Front Companies, and Joint Ventures: Exploitation of existing non-government affiliated organizations or creation of new ones such as friendship societies, exchange organizations, and import-export firms offering frequent contact with foreigners.

Corporate Mergers and Acquisitions: Corporate mergers and acquisitions made specifically to allow a foreign company to acquire US-origin technologies without spending their own resources on R&D.

Headhunting, Hiring Competitors' Employees: Hiring knowledgeable employees of competing US firms to do corresponding work for the foreign firm.

Corporate Technology Agreements: Technology sharing agreements and negotiations that require US firms to divulge excessive information about its processes and products.

Sponsorship of Research Activities in the US: Sponsoring of research activities at US universities and research centers to collect proprietary information or insert intelligence officers for data collection.

Hiring Information Brokers, Consultants: Information brokers purchase information or offer commission or agency agreements. Brokers also hire former US government officials to lobby for expanded data access.

Fulfillment of Classified US Government Contracts and Exploitation of DOD-Sponsored Technology Sharing Agreements: Traditional US allies primarily use companies that are partially or substantially controlled by a foreign government to seek classified US government contracts.

Tasking Liaison Officers at Government-to-Government Projects: Requests for on-site liaison officer to monitor progress and provide guidance during joint R&D activities are used for unapproved data collection.

Gordon Housworth



InfoT Public  Intellectual Property Theft Public  

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