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Trade Secrets

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Protecting Trade Secrets With the expansion of technology over the past several decades, the availability of the internet as well as our reliance on it, and emerging powers such as China and India, trade secrets become more valuable and harder to protect. Whether it’s computer hacking a corporation’s network, a military mainframe, or spying for another country, also called espionage, it takes a wide array security measure to protect information from leaking or being stolen by our advisories. These security measures fall with the realm of IT, background investigations, and facility security. It is obvious, given past espionage events; these procedures are not always effective. Trade secrets, by definition, is considered to be a formula, practice, process, design, instrument, or compilation of information, hardware, technology, or some other means of proprietary information which is not generally known by the public or outside of the entity that protects. A trade secret gives a business the ability to obtain an economic advantage over competitors or customers. In some legal jurisdictions (states), these secrets are referred to as "confidential information", and are generally not referred to as "classified information" in the United States, as “classified information” refers to government secrets protected by a different set of laws and practices. Although, it is very important to note that the government, but more specifically the military and NASA have issues with protecting trade secrets. Both the United States military and NASA have been and continue to be targets of cyber hacks from nation states. Emerging super powers such as China and India, among others, attempt to hack into protected systems to steal trade secrets. Understanding that a trade secret under U.S. law is defined under 18 U.S.C. § 1839 (3) (A), (B) (1996), has three parts: (1) information; (2) reasonable measures taken to protect the information; and (3) which derives independent economic value from not being publicly known." Granted, NASA and the military do not gain economically; they are involved in acquisition and trade with foreign partners and they do contract private companies such as BAE and Lockheed Martin in the development of their material and equipment. An excellent example of hacking into U.S. systems was in May 2013 when U.S. officials confirmed that plans for dozens of critical weapon systems where stolen by Chinese hackers. The report did not identify the types of weapons systems compromise; however, it did state that China saved billions of dollars of combat advantage. It also stated that it saved China at least 25 years of research and development (businessinsider, 2013). In addition the report supplied a partial list of compromised designs that included the F-35 fifth generation fighter jet, the V-22 Osprey, THAAD missile defense system, the Patriot missile defense system, and the Global Hawk high altitude surveillance drone. Hackers also accessed Personally Identifiable Information, including vast quantities of military email addresses, SSN, credit card numbers, and passwords (businessinsider, 2013).
As mentioned earlier, security is the primary priority for companies protecting their trade secrets. Some of the examples with regards to security are Non-Disclosure Agreements (a legal statement swearing to not discuss of divulge information about what they experience without the consent of the originator), background investigations (usually conducted by someone contracted out by the company of hire to check into the live of the employees or potential employees to determine if they are suitable for possessing knowledge or access of the companies secrets), and technical security (scanners, security cameras in sensitive areas, safes, access cards, and monitoring of computer systems within the given company or organization). The impact of espionage on a company can vary from company to company and also depends on the secret that is compromised. The spectrum could be as little as a company having to change course on what they make, an ingredient, or a way of treating customer, to putting a company in financial ruin; costing the company billions of dollars. A variable that needs to be addressed is if it’s a foreign company or nation that steals the secret and how they use it. For a hypothetical example, if India was able to acquire the ingredients for Pepsi, they would not have to import it and would possibly be able to export it to surrounding countries; this would not only have an economical effect on the Pepsi, the U.S. economy, but also on economies overseas. Something like this would take from our economy and add to another, shifting the balance. The investigation on a case like this would be limited given there are no international laws when it comes to trade secrets, not to mention proving it in a court of law. There are two yet vey similar ways of acquiring information. First being misappropriation which is the wrongful acquisition, disclosure or use of a trade secret. The UTSA defines it as (a) acquiring a trade secret through improper means or from another person knowing that the person acquired the secret by improper means, or (b) disclosing or using the secret without consent when the circumstances create a duty not to disclose or use it (gwumc.edu, 2014). Economic espionage is the unlawful or clandestine targeting or acquisition of sensitive financial, trade or economic policy information; proprietary economic information; or technological information (cornell.edu, 2014). The difference between misappropriation and economic espionage according to definition is very similar, yet economic espionage seems to lend itself as being worst given its clandestine targeting. It is a major challenge to protect trade secrets if it went into an investigation of prosecution. In section 1835 of the Economic Espionage Act (EEA) authorizes a court to grant a protective order to maintain the secrecy of the purported trade secret during the EEA criminal litigation. However, this Congressional intent to preserve the confidentiality of trade secrets during EEA litigation and encourage victims of misappropriation to disclose wrongdoing to the Government may be thwarted by a defendant’s Fifth and Sixth Amendment right to prepare effectively for trial by gaining access to and reviewing the Government’s material discovery (bc.edu, 2014).

References

bc.edu. (2014, 02 20). Retrieved from http://www.bc.edu/bc_org/avp/law/st_org/iptf/articles/content/1999052501.html#V. businessinsider. (2013, 05 28). Retrieved from http://www.businessinsider.com/china-hacked-us-military-weapons-systems-2013-5 cornell.edu. (2014, 02 20). Retrieved from http://www.law.cornell.edu/wex/economic_espionage gwumc.edu. (2014, 02 27). Retrieved from http://www.gwumc.edu/hspi/policy/Economic%20Espionage%20and%20Trade%20Secret%20Theft%20-%20September%202013.pdf

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