White House Releases Strategy to Tackle Trade Secret Theft

By Renee Dopplick, ACM Director of Public Policy
February 21, 2013

A new White House strategy paper released on Wednesday outlines a five-pronged approach for protecting trade secrets of U.S. companies against a growing threat of theft and misappropriation. The strategy calls for (1) increased diplomatic measures to support sustained and coordinated international efforts, (2) the adoption and sharing of best practices by private industry, (3) enhanced domestic enforcement, (4) improved federal laws, and (5) continued public awareness campaigns and stakeholder outreach.

Standing alongside U.S. Intellectual Property Enforcement Coordinator Victoria Espinel, Attorney General Eric Holder said yesterday at the White House that it is imperative to implement the strategy immediately because “the stakes have never been higher.” He observed that, although critical technologies have advanced during the past decades, criminals too have adapted. Thus, the proliferation of IP-enabled devices, cloud-computing, and other advancements in technology are making it easier for criminals to steal confidential information because these new technologies are creating “more access points and vulnerabilities” in cyberspace.

Acting Commerce Secretary Rebecca Blank echoed the urgency and importance of acting now through a coordinated government-wide approach to protect trade secrets because such confidential information plays a critical role in the ability of American businesses to innovate and compete in the global marketplace. She also highlighted the importance of President Obama’s new Executive Order on cybersecurity and the role of industry efforts to identify and share best practices.

The inclusion of speakers from GE, American Superconductor, and the Information Technology Industry Council at the White House announcement suggests that we could see more voluntary information sharing and collaboration between the private sector and the government to protect against economic espionage and trade secret theft and to assist with enforcement.

Legislative action likely on the agenda for 2013

The fourth prong of the strategy, “Improve Domestic Legislation,” calls for the U.S. Intellectual Property Enforcement Coordinator to spearhead a review of federal laws to determine if existing laws are “as effective as possible” and “reflect the seriousness of these crimes and the economic harm inflicted on victims.” The review, to be concluded by the end of May, will update and supplement the findings and recommendations of the 2011 White Paper on Intellectual Property Enforcement Legislative Recommendations.

Any federal legislation stemming from the new White House strategy would augment the two recently enacted laws praised in the strategy paper for their “immediate and positive impact” on criminal prosecutions. The Theft of Trade Secrets Clarification Act of 2012 strengthened the government’s ability to prosecute thefts of trade secret computer source code. The Foreign and Economic Espionage Penalty Enhancement Act of 2012 bolstered criminal penalties for economic espionage and called for the U.S. Sentencing Commission to consider increasing offense levels for trade secret crimes.

The focus of the review on the ability of federal laws to address the seriousness of the crimes suggests we might see continued expansion of federal criminal laws to deter and punish trade secret theft, including in the increasingly important area of cyberspace.

Full-text of the White House strategy paper is available at: