On Sunday evening, CBS's 60 Minutes aired a segment featuring “The Five Eyes” and the critical issue of state-sponsored intellectual property ("IP") and trade secret theft. While geopolitics and national security issues might not be directly on the minds of most business leaders and researchers developing the critical IP to support cutting-edge technologies, including biologics, computing, and artificial intelligence, this segment offers a strong reminder for why entities must be cognizant of IP theft and remain vigilant in safeguarding their intangible assets.
The Five Eyes comprise intelligence directors of the U.S., U.K., Canada, Australia, and New Zealand, including F.B.I. Director Christopher Wray. The threat of IP theft around the globe has long-existed, but these intelligence leaders laid out the purposeful and increasingly sophisticated tactics that may be used to target and steal IP and trade secrets. As the Director General of the U.K.'s MI-5, David McCallum, explained:
"This is not just about government secrets or military secrets. It's not even just about critical infrastructure. It's about academic research in our universities. It's about promising startup companies. People, in short, who probably don't think national security is about them . . . So we see the theft happening in a range of ways. One is that we see employees within those companies being manipulated. Often, in the first instance, they are not aware of what is happening. We have seen, for example, the use of professional networking sites to reach out in sort of masked, disguised ways to people in the U.K., either who have security clearance or who are working in interesting areas of technology. We've now seen over 20,000 examples of that kind of disguised approach to people in the U.K. who have information that the Chinese State wishes to get its hands on."
This echoes detailed warnings about organized and systematic threats offered by FBI agents and DOJ attorneys at trade secret conferences over the past year.
What to do? If you're a business owner, executive, researcher, or even a shareholder, you should be actively evaluating internal governance concerning the identification and protection of IP assets and implementing means for understanding vulnerabilities and monitoring security threats. In addition, engaging and training key personnel on the handling and safeguarding of IP assets and recognizing risks, including risks posed by vendors and development partners, is paramount to combatting IP theft. This is especially true for startups and small and mid-sized firms who will rely on the potential of their IP to grow their businesses. Furthermore, you should consider building out a rapid response team, including legal, IT, and HR functions, to engage threats in real-time and interact with appropriate federal and state authorities.