FBI Strategic Partnership Program

croatiandestructiveBiotechnology

Dec 9, 2012 (4 years and 9 months ago)

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ECONOMIC
ESPIONAGE

UNCLASSIFIED


SABT Parker Shipley

Program Coordinator

Milwaukee Field Office



Objectives


Importance of Intellectual Property (IP)


Threat Awareness


Signs of Economic Espionage


Protective Measures

FBI Priorities

Protect the United States…

1.

From
terrorist attack.


2.

Against
foreign intelligence
operations
and espionage
.







Partnership with public and private
entities to
protect

the national and
economic security

of the United
States through the exchange of
information

STRATEGIC PARTNERSHIP
PROGRAM

What is Intellectual Property Theft?

Protect
your IP like your
ID
SM

What is Intellectual Property?

All types of information:


Financial


Business


Scientific


Technical


Economic


Engineering information


Patterns


Plans


Codes





Compilations


Designs


Formulas & Recipes


Prototypes


Methods


Techniques


Processes


Procedures


Programs



Tangible:





Intangible: No matter how stored or compiled:






physically, electronically, graphically,
photographically, or in writing.





No Matter What Form

Value of Intellectual Property


IP has value because of its:


Economic value, actual or potential


Not being generally known by and ascertainable to
the public.


What stolen IP can cost you:



Research and development costs



Manufacturing and production costs



Proceeds from licensing the IP or trade secret

Importance of Theoretical Research

Letter from Albert Einstein to President Franklin D. Roosevelt,
dated 8/2/1939

“ the element
uranium

may be turned into a new and


important source of energy in the immediate future.”

“ This new phenomenon would also lead to the

construction of
bombs
, ”

+

=

History of Economic Espionage:

Silkworm Theft in the 6
th

Century


For centuries, making silk
was an ancient Chinese secret.


550 AD two Nestorian Monks
stole silkworm eggs hidden in
their hollow bamboo staves


Gave eggs to Byzantine
Emperor, Justinians.


One of the earliest known
examples of economic
espionage

Examples In Our Time

US
F
-
22A

PRC
J
-
20

Sukoi

T
-
50

Current Threat


More than
106

countries have targeted U.S.
IP.



92% of
IP targeted was
unclassified.



World
economic

and military pressures will force
foreign
countries to steal more
U.S.
IP.



U.S. losses =
$200 Billion +
a year

The Threat

CHINA



RUSSIA


IRAN


Where’s The Threat ?


Military


Government


Intelligence
Agencies


Big Defense
Contractors


Larger Cities

COLD WAR VS. NOW


Any IP or Technology


Small Companies


Small Cities


All the Former Targets
Still Fare Game

Threat to Corporate America

USA Today
7/29/10

Insiders Are the Biggest Threat


“The strongest castle walls are not
proof against a traitor within”

-

Ancient Proverb








75% of reported cases

Targeted IP and Technology

Civilian Technologies

(Restricted or Proprietary)


Pharmaceuticals


Biometrics


Nanotech/Miniaturization


Manufacturing Processes


Public Safety Systems


Patent Rights


Biotechnology

What The Threat is Looking For

Milwaukee Journal Sentinel 2/7/10

Economic Espionage Act of 1996

Economic Espionage


18 USC 1831


Stealing IP for any

foreign government, foreign
instrumentality or foreign agent.


15 years prison & $500,000 Fine, Org. $10 Mil Fine


Theft of Trade Secrets


18 USC 1832

Stealing IP for purely economic advantage.


10 years prison & $250,000 Fine, Org. $5 Mil Fine

Reasonable IP protection needed for prosecution





Methods Used to Target Technology

Unsolicited e
-
mails

Front companies

Recruitment by foreign
intelligence services

Liaison with universities
that have ties to defense
contractors

Exploiting Multi
-
National
Conferences, Business
exchanges or Joint Ventures

Visiting scientific and
research delegations

Circumventing
export control
laws

Researchers and facilities
relocated overseas

Source: National Counterintelligence Center Annual Report to Congress on
Counterintelligence and Industrial Espionage

Victim Companies


L
-
3 Communications


Coca Cola


Bristol Myers


Kraft Foods


Gillette Company


Deloitte &
Touche


Wilsonart

Int’l


Idexx

Labs


Sun Microsystems


IBM


Cleveland Clinic


Caterpillar


Motorola


Avery Dennison


PPG


Lucent Technology


Mastercard


3M

Signs You are
an IP Theft Victim

1.
Competition Suddenly Emerges

2.
Market Share Decreases

3.
Profit Margins Decrease

4.
Revenues Decline

5.
Management Confused

6.
Management has Solution


-
Leave the Market


-
Sellout to Competition

Source: Kevin Swailes, Global Sec Dir,
GE Energy, 11/2009

How to look for IP Theft?

1.
Internet Searches

2.
Conferences & Trade Shows

3.
Ads or Brochures of Products

4.
Trade Publications

5.
Liaison w/ Others in Industry

6.
Searches in Legal Databases

7.
Media Reports of IP Theft



Methods for economic protection

How to Protect Your IP from the threat

1.
Recognize
there is a threat.

2.

Identify and valuate trade secrets.

3.

Implement a definable plan for safeguarding trade secrets.

4.

Secure
physical
trade secrets and limit access to them.

5.

Confine intellectual knowledge.

6.

Provide ongoing security training to employees.

Protective Measures


Lock up the information


Require
confidentiality
and
Nondisclosure Agreements (NDAs)


Restrict access on
sensitive
information to need to know


Encrypt
secrets
kept in electronic
files


Mark documents as proprietary,
sensitive or restricted, etc.


Secure and shred garbage

What to do if you suspect IP theft ?


Notify your mgt or security dept. ASAP.


Take internal steps to stop the loss.


Document the issue.


Call us we
can

help.


Legal processes are available to us (Grand
Jury Subpoenas, Search Warrants)


Economic Espionage is our responsibility


Running a successful business is yours




What
not

to do?


Ignore the warning signs



Cover up a problem



Keep it quiet



Fire and forget


(leave the problem for someone else)

Super Vision Case Example

Super Vision Case Example


IP Theft by PRC
Company


Used Insider


$ 5
-
6+ mil in loss


$42 Mil Judgment


(still trying to collect )

Chi Mak Case Example


Naturalized US Citizen from PRC


Worked Power Paragon of L
-
3
Comm


Quiet
Elec

Drive (QED) for US Navy


Stole QED Info for PRC


Admitted Sleeper
Agent 20+ years


Arrested in 2005


Convicted 5
Felonies in 2007


Sentenced to 24 years in prison











Coke Case Example


Joya

Willams
, Exec Admin Asst.


2 other co
-
conspirators


Sent Pepsi a letter
in 2006


14 pgs of sensitive Coke IP to
undercover agent


Wanted
1.5
mil for more IP



All Convicted
in
2007


Sentenced 8 Years in Prison

One Final Thought For You

Protect your IP like your ID
SM

QUESTIONS?

SABT Parker Shipley

Milwaukee Field Office


FBI

414
-
276
-
4684