The independent Commission on the Theft of American Intellectual Property recently released a report detailing the scope of intellectual property (IP) theft, the role of the Chinese and more active ways for the United States to respond.
“If less innovative foreign companies can reap the profits of U.S. research and development and innovation, we will lose our competitive edge and eventually experience a decrease in incentives to innovate altogether,” co-chairs former Director of National Intelligence Dennis Blair and former Ambassador to China Jon Huntsman wrote in a Washington Post op-ed announcing the report.
The report attempts to quantify the massive economic impact of IP loss, which it estimates is equivalent to yearly U.S. exports to Asia, or roughly $300 billion. The commission quotes head of U.S. Cyber Command and the National Security Agency Army Gen. Keith Alexander’s assessment that IP theft accounts for the “largest transfer of wealth in history.”
The commission’s findings on Chinese involvement come just days after the New York Times reported that the Chinese military unit 61398 responsible for significant cyber espionage was active again. The unit has remained quiet for three months following a widely circulated report from security firm Mandiant that first identified its role in major cyber attacks on American companies.
While many figures in the commission’s report have already been published, the report offers various solutions for thwarting adversaries’ attempts at stealing IP.
In terms of cyberspace, where most IP is stolen from, the report suggests protecting specific files, not just networks at large. Files can be tagged so that a company can recognize when it has been moved from its network. Additionally, files can have protections that only allow certain users to open them, even if they are stolen.
The report also recommends modifying the law to allow companies to actively defend their IP, including permission to retrieve stolen IP from an adversary’s network and altering or destroying IP to make it unusable on the outside network once it has been taken. More extreme measures include accessing a hacker’s computer camera to photograph and identify the perpetrator, implanting malware on the hacker’s network or even damaging the network itself.
The commission is a bipartisan group formed in 2012 to provide recommendations to the U.S. government for decreasing the vulnerabilities of American IP.