Tech groups hailed the White House for its new...

Executive and U.S. Trade Representative (USTR). It arrives against the backdrop of major Internet companies, including Facebook, Twitter and Apple, announcing this month that hackers had installed malware on employees’ computers (WID Feb 20 p7). Beyond the recruitment of current or former employees by foreign competitors -- “some with ties to foreign governments” -- to illicitly obtain trade secrets, “there are indications” that U.S. companies, law firms, academia and financial institutions “are experiencing cyber intrusion activity against electronic repositories contain­ing trade secret information,” said the White House strategy document (http://1.usa.gov/VL0Q57). The pillars of the strategy are to: (1) Focus diplomatic efforts to protect trade secrets abroad. This includes having State schedule senior administration officials to meet with foreign governments “where there are regular inci­dents of trade secret theft or that may be complicit in trade secret theft,” have the Patent and Trademark Office (PTO) incorporate trade-secret theft into ongoing Intellectual Property Rights Working Group plans at U.S. embassies, and better incorporate the subject into processes such as USTR’s Special 301 review and the Trans Pacific Partnership talks (see report above in this issue), among other activities. (2) Promote voluntary best practices by industry. The “anonymous or pseudony­mous nature of the Internet” contributes to “growing challenges in protecting trade secrets,” and the U.S. Intellectual Property Enforcement Coordinator (IPEC) can facilitate the development of best practices through groups that are already “crafting industry driven initiatives,” the document said. It suggested areas for consideration include “research and development compartmentalization,” information and physical security policies, and human resources policies. (3) Enhance domestic law enforcement operations, building on the work of the Attorney General’s Task Force on Intellectual Property, which since 2010 has led to 29 percent more trade-secret theft investigations by the FBI. The document said the FBI is expanding its efforts to fight computer intrusions involving trade secrets. (4) Improve domestic legislation. The document points to bills already signed into law by President Barack Obama, which “closed a loophole” in federal law that allowed theft of trade-secret “source code” and increased criminal penalties for economic espionage and directed the U.S. Sentencing Commission to consider raising penalties for such crimes. The administration through IPEC will work with federal agencies to review existing laws to see if trade secret-specific changes are needed. (5) Public awareness outreach through the existing StopFakes.gov counterfeit educational site and the PTO’s “road show” trainings, among other initiatives. Attorney General Eric Holder said at a White House event on the initiative rollout Wednesday that the explosion of smartphones, tablets and other Internet devices, plus the expansion of cloud computing, will “create more access points and vulnerabilities that allow criminals to steal confidential information” (http://1.usa.gov/ZkE3tU). There’s a road map for fighting back against such Internet-facilitated crime, he said, pointing back to his tenure as deputy attorney general in the Clinton administration, when the doubling of Internet usage in the U.S. was immediately followed by a 30 percent spike in intellectual property crimes from 1998 to 1999. Justice has “refined our approach” as it secured more than 100 convictions in trade secrets cases between 2001 and 2011, gathering “valuable intelligence” and forging “strong relationships with law enforcement partners, private sector experts, and international allies,” Holder said. Information Technology Industry Council President Dean Garfield said at the White House event (http://bit.ly/UND6vq) the initiative would ameliorate the problem of “industry silos,” where “it is our tendency to work in the semiconductor industry or in the photovoltaic or otherwise.” Industries that work across silos can get “the best out of those [individual] best practices” and optimize their learning, he said. Industry must build on “existing infrastructure” for best practices, such as The Center for Responsible Enterprise and Trade and the private sector’s work with the National Institute of Standards and Technology in “consensus-based voluntary standards,” Garfield said. Another problem for industry is that companies tend to pursue “their civil remedies,” he said: The White House plan will provide “greater clarity around what it takes to advance a criminal case,” such as the “thresholds” for when the government will pursue a case. BSA/The Software Alliance, previously known as the Business Software Alliance (WID Oct 12 p10), separately hailed the initiative. “Combating theft of software developers’ intellectual property, including trade secrets, has long been BSA’s top priority,” said BSA President Robert Holleyman. Trade-secret theft “poses a serious and growing threat to the software industry around the world."