Tuesday, October 21st, 2014

The Obameter

Prevent corporate cyber-espionage


"Will work with industry to develop the systems necessary to protect our nation's trade secrets and our research and development."


Updates

New laws, more money support this promise

As political and business leaders fret over online prowlers stealing the country's trade secrets, President Obama recently signed two laws beefing up the penalties for cyber espionage.

The Theft of Trade Secrets Clarification Act of 2012, signed in December, amends a 1996 law that originally imposed criminal sanctions on anyone who intentionally steals a trade secret "that is related to or included in a product that is produced for or placed in foreign commerce." The new law extends criminal penalties to theft of services used in interstate commerce.

Congress passed the law in response to a case of a Goldman Sachs employee accused of stealing trading software, according to Mondaq, a legal analysis site. But because the software was not intended for sale, it was not covered by the existing law.

The new legislation closes "a significant loophole,” the legal journal said. "Now, important trade secrets that are used internally to help provide a competitive edge for a company may be protected under the Economic Espionage Act.”

The second bill, which Obama signed Jan. 14, 2013, increases the maximum penalty for trade secret misappropriation for the benefit of a foreign government from $500,000 to $5 million for individuals, and from a maximum of $10 million for organizations up to three times the value of the trade secret.

In 2010, the White House convened a panel to create a strategic plan on intellectual property enforcement that included ways to address espionage by foreign citizens and governments. The panel, which meets annually, included the penalty enhancement act that Obama signed in its legislative recommendations.

On the funding side, it's clear that the FBI has stepped up efforts to combat cyber espionage every year. The branch whose duties include investigating and preventing "criminal computer intrusions, intellectual property rights violations and theft of trade secrets, internet fraud, etc.” requested about $20 million more in 2013 than it received in 2011 -- a total budget of about $3.5 billion and nearly 6,000 full time positions. We don't know precisely how much of that goes to cyber espionage, but the overall amount is going up.

Obama's promise to prevent corporate cyber espionage is a large and ongoing one, but the evidence we found adds up to substantial progress. Our rating: Promise Kept.

Sources:

THOMAS, Theft of Trade Secrets Clarification Act of 2012, introduced Nov. 27, 2012

THOMAS, Foreign and Economic Espionage Penalty Enhancement Act of 2012, introduced June 27, 2012

Mondaq, "United States: Important Changes To The Federal Economic Espionage Act That Protect Trade Secrets,” Jan. 10, 2013

White House, 2010 Joint Strategic Plant on Intellectual Property Enforcement

FBI 2013 Authorization and Budget Request to Congress

Money in budget to combat corporate cyber-espionage

On Dec. 16, 2009, President Barack Obama signed the 2010 Consolidated Appropriations Act, which includes $10 million to the Commerce Department's Bureau of Industry and Security for a cyber espionage and system modernization initiative.

In addition, the FBI will get $140 million to fund the Comprehensive National Cybersecurity Initiative.

According to a Dec. 8, 2009, House Appropriations Committee conference report accompanying the consolidated spending bill, "Cyber-based attacks and intrusions upon U.S. computer networks, many of which may be conducted by foreign state sponsors, result in substantial loss of critical intelligence by U.S. government, academia, military, industry, financial and other domains. The conferees recognize the FBI's efforts to address these threats and have included the full request of $140,311,000 to fund those efforts. This total includes an additional 260 positions and $61,180,000 to further the FBI's investigatory, intelligence gathering and technological capabilities."

Among other things, the FBI has been directed to submit a report to the committee on "plans for outreach to both public and private sector institutions to prevent and deter future attacks."

We rate this promise In the Works.

Sources:

Conference Report to Accompany H.R. 3288, Department of Transportation and Housing and Urban Development, and Related Agencies Appropriations Act, 2010, Dec. 8, 2009

H.R. 3288, Department of Transportation and Housing and Urban Development, and Related Agencies Appropriations Act, 2010

Nextgov, "Commerce Department gets funds to combat cyber espionage," by Jill R. Aitoro, Dec. 21, 2009