White House to combat hackers with diplomacy

The Obama administration unveiled a strategy on Wednesday to better protect the business secrets of U.S. companies from theft, including attacks by hackers.

The White House said it will use "trade policy tools" to pressure other countries to stop hacking U.S. companies and to enforce intellectual property laws. 

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The administration plans to improve coordination with other countries that share its concerns over trade secret theft, and will push for trade secret protections in negotiations over international trade agreements.

"The Administration will continue to act vigorously to combat the theft of American trade secrets that could be used by foreign companies or foreign governments to gain an unfair commercial advantage over U.S. companies," Intellectual Property Enforcement Coordinator Victoria Espinel said in a statement.

The new strategy comes one day after Mandiant, an American computer security firm, released a report concluding that an elite military unit of Chinese hackers, the People's Liberation Army Unit 61398, is likely behind a wave of attacks on U.S. computer networks. 

The analysts wrote that since 2006, the Chinese hackers have stolen data from at least 141 companies across 20 major industries, including critical infrastructure sectors like energy and telecommunications. At least 115 of the companies were in the United States. 

China has denied the claims.

"Trade secret theft can cripple a company’s competitive advantage in foreign markets, diminish export prospects around the globe, and put American jobs in jeopardy," Espinel said.

In addition to diplomatic pressure, the administration's plan, detailed in a 72-page report, calls for industry-led efforts to share cybersecurity best practices. 

At a White House event to unveil the plan, Attorney General Eric Holder said the Justice Department will continue to make investigation and prosecution of trade-secret theft a top priority.

"In some industries, a single trade secret can be worth millions — or even billions — of dollars. Trade secret theft can require companies to lay off employees, to close factories, to lose sales and profits, to experience a decline in competitive position and advantage — or even to go out of business," Holder said.

As part of the strategy, the FBI and intelligence agencies will provide warnings to companies that have become targets of foreign governments or competitors for cyber espionage.

The administration will also launch a public awareness campaign on the threats and risks of trade secret theft. 

The document notes that last week, ahead of the State of the Union address, President Obama signed an executive order that will create a voluntary set of cybersecurity best practices for companies that operate critical infrastructure.

The order also requires federal agencies to share more information about cyber threats with U.S. companies and the public.

Acting Commerce Secretary Rebecca Blank said the department's National Institute of Standards and Technology will work with industry groups to implement the executive order's security standards.

"We believe that this new framework will ultimately help improve the resiliency of businesses and prevent theft," Blank said.

David Fagan, an attorney for the firm Covington & Burling and an expert on cybersecurity and trade, said in an interview that the new strategy is an important step towards better protecting U.S. trade secrets. He praised the administration for not pushing for burdensome regulations on businesses.

Fagan said that corporate insiders selling or profiting from business secrets is still a problem, but that the rise of state-sponsored hacking poses a new kind of threat to U.S. businesses.

"We can't just stand by and let [foreign governments] play the game by a different set of standards," Fagan said.