WASHINGTON – Stemming the loss of intellectual property in the private sector will require the federal government to share more of its information on cyber threats with American businesses and make it more clear how they can legally combat them, experts said Thursday at a cyber theft roundtable on Capitol Hill.
The U.S.-China Economic and Security Review Commission, an initiative created by Congress to report on the national security implications of trade between China and the U.S, convened the experts.
“The companies need the right tools, legal and otherwise, so that they can do what they need to do to protect themselves,” said Roy Kamphausen, deputy executive director for the Commission on the Theft of American Intellectual Property.
And while companies acknowledge their responsibility to block computer data theft, some in the private sector say the government is not using its power and knowledge effectively.
“Where we want to turn to the government is for information,” said Bruce Quinn, vice president of government relations at Rockwell Automations. “They have significant resources in assisting to identify potential threats. They can also explain to us some countermeasures we can use to protect ourselves.”
A May 2013 report published by the National Bureau of Asian Research appraised the annual loss of intellectual property for American companies in the hundreds of billions of dollars.
One of the most well-know examples of cyber theft and the devastating effects it can have involves electronic systems maker American Superconductor Corp.
In the spring of 2012, the Devens, Mass.-based company’s largest customer—Beijing-based Sinovel Wind Group Co.—abruptly stopped ordering components from AMSC. The news sent the company’s stock into a tailspin, plunging 41 percent in one day and an additional 71 percent in the six-month period that followed. Several months later, AMSC’s CEO got word that Sinovel had pirated the company’s proprietary technology in order to produce its own turbines.
On June 27, 2013, the Department of Justice indicted two Sinovel employees and an employee of a subsidiary of AMSC for theft of trade secrets and wire fraud. The DOJ estimated the cost of Sinovel’s property theft to AMSC at roughly $800 million.
In addition to asking for more open information-sharing, Thursday’s panelists implored the federal government to more clearly define what steps a company can or cannot take in attempting to retrieve its stolen intellectual property.
“It is absolutely unclear right now under the law,” said James Mulvenon, Vice President of Intelligence at Defense Group Inc.
Experts called the 1986 Computer Fraud and Abuse Act outdated and cautioned that a cyberspace “Wild West” could develop if companies felt the government was not doing enough to help retrieve stolen material and prosecute those responsible.
“We may find ourselves in a world where companies take matters into their own hands because nothing is being done to help them,” Kamphausen said.