The Five Eyes Alliance came down hard on Intellectual Property (IP) Theft at their October 17th conference when they released the 5 Principles of Secure Innovation, a set of guidelines designed to protect business leaders and startups from becoming victims of IP compromise.
Created to share intelligence and combine forces against common threats, Five Eyes – a coalition comprised of the U.S., the U.K., Canada, Australia, and New Zealand – identified the theft of intellectual property as an area of prescient danger. The country of top concern? China.
The IP Theft Problem
Intellectual Property (IP) Theft is a multifaceted dilemma. According to data security firm Salt, the four types of IP Theft include:
- 1. Copyright Infringement | This occurs when copyrighted materials like software code, literary excerpts, or movie clips are used – ostensibly for gain – without the owner’s permission. And without giving the owner their monetary due.
- 2. Trademark Counterfeiting | Ever seen a knock-off handbag? Trademarks are registered for a reason; they are the company’s face in the world, and the images that stand for countless cumulative hours of creation. Everything the business has worked hard to be is displayed in its trademark. Unauthorized use of those registered trademarks devalues the brand and hurts the bottom line.
- 3. Trade Secret Theft | Confidential business information is a company’s competitive edge. That’s why trade secret theft not only breaches integrity, but also unfairly affects competition. Knowing a company’s“secret sauce” gives those who haven’t earned it an unfair advantage and could bring the original creators to ruin.
- 4. Patent Infringement | Many times you can find a useful gadget at a fraction of the cost on a different website. While sometimes just a “steal deal”, other times those goods are guilty of patent infringement, or illegally reproducing a patented product. Again, these inventions are patented for a reason, and that is to grant the patent grants the holder exclusive rights to its make and sale. Abusing these laws discourages much of the incentive behind innovation.
IP Theft is metaphorically so many jungle-ball business practices. Run smoothly, capitalist economies gain their strength by ensuring each player gets a chance to prosper according to their own good ideas and efforts. Though “cheating” is certainly one way to get ahead, basic rules of engagement dictate that it eventually ruins the game for everybody. If one party gets away with stealing the others’ idea, that company now can’t (in good faith) pursue its own innovative inventions for fear that they, too, will get stolen. Innovation plummets, sales go down, and everyone loses in the end.
Protecting intellectual property protects businesses, economies, and – not to be too dramatic – life as we know it.
China-Sponsored IP Theft
Not for the first time, China was added to the “priority watch list” in the Office of the US Trade Representative’s (USTR’s) Special 301 Report, an annual publication noting which foreign entities present a high threat to U.S. intellectual property. Its frequent parries with intellectual property laws have landed it in hot water with several regulatory agencies and watchdog groups, of which Five Eyes is now one.
As noted in Reuters, the Five Eyes recently came together to release a joint statement accusing China of “intellectual property theft and using artificial intelligence for hacking and spying against the nations.” Said U.S. FBI Director Christopher Wray, “China has long targeted businesses with a web of techniques all at once: cyber intrusions, human intelligence operations, seemingly innocuous corporate investments and transactions. Every strand of that web had become more brazen, and more dangerous."
Just last year, security firm Cybereason uncovered an elaborate Chinese IP Theft ring, dubbed Operation CuckoBees, which exfiltrated sensitive proprietary information from approximately 30 multinational organizations. "We're talking about Blueprint diagrams of fighter jets, helicopters, and missiles," Cybereason CEO Lior Div told CBS News.
The Five Principles of Secure Innovation
In response to Chinese IP poaching - and a 36% rise in the cost of American IP Theft annually – the Five Eyes Alliance finally came together to tackle this “unprecedented threat.”
As MI5 Director General Ken McCallum stated at the San Francisco launch event of the 5 Principles of Secure Innovation:
“Across all five of our countries, we are seeing a sharp rise in aggressive attempts by other states to steal competitive advantage. This contest is particularly acute on emerging technologies; states which lead the way in areas like artificial intelligence, quantum computing and synthetic biology will have the power to shape all our futures. We all need to be aware, and respond, before it’s too late.”
Those five principles are:
- 1. Know the Threats | Understand the ways in which state-sponsored espionage agents and others could compromise your technological secrets.
- 2. Secure Your Environment | Focus on security risk management, risk ownership, identification, assessment, and mitigation.
- 3. Secure Your Products | Practice security by design and proactively secure and manage your intellectual assets.
- 4. Secure Your Partnerships | Manage your third-party supply chain risks, both up and down the stream.
- 5. Secure Your Growth | Stay on top of the risks that come with expanding your workforce and entering new markets.
This joint release comes on the heels of alarmingly high rates of Intellectual (IP) Property Theft in the United States. Besides a 36% hike in overall cost, the National Intellectual Property Rights Coordination Center (IPRCC) reported cases against IP Theft are up by 21%, criminal arrests are up by 39%, and indictments have nearly doubled at a 99% increase.
About Author:
An ardent believer in personal data privacy and the technology behind it, Katrina Thompson is a freelance writer leaning into encryption, data privacy legislation and the intersection of information technology and human rights. She has written for Bora, Venafi, Tripwire and many other sites.
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