Sovereign Economic Espionage and Why Dr. Strangelove was Prescient

In addressing secrets, Dr. Strangelove exclaimed that “the
whole point of a Doomsday Machine is lost if you keep it a “secret!”  Why don’t you tell the world, eh?” to which
Ambassador de Sadesky replied “it was to be announced at the Party Congress on
Monday.  As you know, the Premier loves
surprises.” 

Secrets, of a political or corporate nature are of value,
and to be guarded by its owners.  What
happens, however, when American companies start developing intellectual
property in parts of the world that treats secrets as party favors, to be
liberally distributed?

Losing valuable intellectual capital to the competition is
akin to facing a doomsday scenario for most American businesses.  What are the weapons your business has to
keep? What does it develop and how does it keep out those who would take
it?  What happens if the theft of
industrial trade secrets is tacitly approved by a country which has state owned
companies in the same business?

In 1996 the United States Legislature enacted the Economic
Espionage Act. 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. The teeth of the Act
make stealing economic information for the benefit of another state a federal
crime punishable by up to 10 years confinement. In addition to criminal
liability, the Department of Justice can initiate a civil action to enjoin the
perpetrators from disclosing the trade secrets. Unmentioned in the Act is
compensation for the victim – American business.

The mention of “agents” or “espionage” gives off the aroma
of a Tom Clancy novel, but economic espionage is far from fiction. A recent
study estimated that such economic espionage accounted for the loss of between
one and six million jobs and billions of American dollars. Predictably, China
and Russia have been the most egregious when it comes to economic espionage;
their “agents” having siphoned off protected information from GM, Intel,
Lockheed Martin, and Hughes Aircraft to name a few. This stolen information is
not only comprised of new developments within an industry, but these agents
have targeted customer data, development data, pricing schemes, marketing
plans, production costs, and sales strategies.

Despite the steps that the U.S. government has taken to
protect American business, the hounds of civil justice remain leashed.
Domestically, the civil courts redress wrongs like the theft and
misappropriation of trade secrets committed by individuals within U.S. borders.
Unfortunately, for many years foreign states have operated with relative
impunity while gorging themselves on our economic viability. Sadly, foreign
relations have trumped economic security.

There could be a thin
glimmer of hope for American business. A New York Federal Court has claimed
jurisdiction over a lawsuit seeking to hold a state sponsor of terrorism
civilly responsible for its wrongful acts. In Sokolow v. PLO, the Palestinian
Liberation Organization is being sued in the amount of 3 billion dollars for
the wrongful death of numerous Israeli and United States citizens that were
killed or injured as a result of PLO terrorist activities during the Second
Intifada. The Anti-terrorism Act of 1991 made this lawsuit possible and imposes
civil liability on state sponsors of
terrorism.

Although this case has not come to a final judgment, this
case could be ushering in a new era. One that holds foreign states responsible
for the damages suffered by individuals, or companies, as a result of a state’s
wrongful act. American businesses can only hope for a similar bill that would
impose civil liability on countries responsible for economic espionage. Until
that day, American businesses remain vulnerable.

To end with another Dr. Strangelove reference; Colonel “Bat”
Guano, in responding to an order to shoot the lock off the Coca Cola machine to
retrieve some change to call the President, reflects that “Okay. I’m gonna get
your money for ya.  But if you don’t get
the President of the United States on that phone, . . . you’re gonna have to
answer to the Coca-Cola company.”
 
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