Designed in America, Made in China: Protecting Intellectual Property from Cyber Espionage
In 2010 the U.S. Department of Defense spent $79.1 billion on research, development, testing, and evaluation of state of the art weapon systems to protect U.S. interests at home and abroad. Accompanying this steep price tag is an expectation that the Pentagon’s intellectual property is secured to Pentagon standards. Yet in the era of cyber warfare such assumptions have become worthless.
Foreign hackers, particularly from China, have become increasingly adept in their ability to crack into American computer systems and access our most heavily guarded and classified intellectual property. FBI director Robert Mueller III admonished that cyber attacks would soon replace terrorism as the agency’s primary concern. Most troubling is that neither the federal government, the Pentagon, nor private enterprises are immune.
At a congressional hearing on cyber security this past April, Rep. Michael McCaul (R-Texas) lamented, “When I look at the theft of intellectual property to the tune of $1 trillion, that’s a serious economic issue for the United States.” McCaul, who is chairman of the House Homeland Security Subcommittee on Oversight, Investigation, and Management, made this statement in
reference to the theft of blueprints for the F-35 Joint Striker Fighters and the F-22 combat aircraft, which were stolen by Chinese hackers in 2009. These are two of the most advanced and expensive stealth aircrafts in the world, but somehow cyber militants were able to obtain their plans from the depths of our most secretive dwellings with just the click of a mouse. The Pentagon has reported more than three million cyber attacks a year on its 15,000 computer networks, and numerous private defense contractors, including Lockheed Martin, Booz Allen, and Gulf Aerospace, also acknowledged to being victims of sophisticated hacking programs.
John Kerry, fresh in his new role as Secretary of State recently remarked that “cyber diplomacy” will be instrumental for the U.S. to establish new standards in the international community to cope with the growing use of “cyber espionage.” Referring to the noted threat from China, Secretary Kerry stated:
“Every day while we sit here, right now, certain countries are attacking our systems, they are trying to hack in to classified information, to various agencies of our government, to banking structures — money has been stolen from accounts and moved in large sums. There’s a long list of grievances with respect to what this marvel of the Internet and the technology age has brought us.”
Legislatures have already undertaken measures to protect technologies and intellectual property from slipping through the cracks of the cybersphere. On December 28, 2012, the Theft of Trade Secrets Clarification Act of 2012 (S. 3642) became law, expanding the definition of trade secrets under the Economic Espionage Act (EEA). It’s always nice to see Congress act in the nation’s best interests, but the true solution relies on a preemptive approach. “I don’t think they saw the attack coming,” remarked a former senior U.S. intelligence. “These guys (the U.S. builders of the plane) lack imagination. They don’t act until something bad happens.”
And act they did. Last year U.S. companies took measures to upgrade their security systems at a cost of $400 billion. Sure, these economic repercussions are hefty, but the real consequences are seen through the lenses of global competition and military supremacy. China now has the foundation to build the same stealth planes used by the U.S. Air Force. Not only is U.S.’s military advantage dwindling, but at a minimal cost to its adversaries, who avoid burdensome costs of research and development. A greater emphasis on cyber security is need from Congress, the Obama Administration, and the private sector, to protect us from Chinese hacking threats. Our military superiority depends on it.