CI, law and ethics: the EEA revisited

HOROWITZ, Richard. CI, law and ethics: the EEA revisited. Competitive Intelligence Magazine, volume 6, number 6, November-December 2003 (accessible at: http://www.scip.org/pdf/Horowitz.pdf ). Consulted the 04-05-07.

Here is just an abstract. You can read the whole article by clicking the link above.

“Law and ethics are important aspects of competitive intelligence (CI), both to the CI practitioner and firm and to the corporate clients who use their services. They are also topics that had been greatly debated in the years following the 1996 passage of the Economic Espionage Act (EEA), resulting in short-term concerns for the CI industry but with long-term positive implications. The EEA debate began in February 1997 when SCIP held a two-day symposium in Washington, D.C. analyzing the effect of EEA on CI. The EEA made theft of a trade secret a federal crime for the first time in U.S. history, generating concern and confusion over what was to be considered legal and ethical means of collecting competitive intelligence. Following the passage of the EEA, a spate of articles and presentations warned that this new law would jeopardize the activities of CI professionals and firms. Subsequent situations emerged where corporate clients of CI firms and in-house CI departments were being held back from properly doing their jobs based on these EEA concerns. One of the warnings given at SCIP’s February 1997 symposium: “Your industry is crawling with criminals and you may be one of them. So might your company . . . [the EEA] will surely lead to greater interest
in federal jurisdiction over civil trade secret disputes.”[…]


Dublin core analysis

DC Title: CI, law and ethics: the EEA revisited
DC Creator: HOROWITZ, Richard
DC Subject: competitive intelligence, economic espionage, business intelligence, law
DC Description: “Law and ethics are important aspects of competitive intelligence (CI), both to the CI practitioner and firm and to the corporate clients who use their services. They are also topics that had been greatly debated in the years following the 1996 passage of the Economic Espionage Act (EEA), resulting in short-term concerns for the CI industry but with long-term positive implications”
DC Publisher: Competitive Intelligence Magazine
DC Contributor:
DC Date: November-December 2003
DC Type: text
DC Format: PDF
DC Identifier: http://www.scip.org/pdf/Horowitz.pdf
DC Source:
DC Language: English
DC Relation:
DC Coverage: international
DC Rights:

Annual Report to Congress on Foreign Economic Collection and Industrial Espionage—2004

Office of the National Counterintelligence Executive (ONCIX). Annual Report to Congress on
Foreign Economic Collection and Industrial Espionage—2004. (on line), April 2005 (accessible at http://www.loyola.edu/dept/politics/intel/fecie/fecie_2004.pdf). Consulted the 03-15-07.


Here is just the scope note. You can read the whole report by clicking the link above.

This is the tenth annual report reviewing the threat to the United States from
foreign economic collection and industrial espionage. The report seeks to
characterize and assess efforts by foreign entities—government and private—
to unlawfully target or acquire critical US technologies, trade secrets,
and sensitive financial or proprietary economic information. The paper
focuses on technologies, the loss of which could undermine US military
capability, impede the ability of US firms to compete in the world marketplace,
or have an adverse effect on the US economy, thereby weakening
national security and eroding the current US technological lead.

The report is being submitted in compliance with the Intelligence Authorization
Act for Fiscal Year 1995, Section 809 (b), Public Law 103-359,
which requires that the President annually submit to Congress updated
information on the threat to US industry from foreign economic collection
and industrial espionage. It updates the ninth annual report published in
February 2004 and includes data for the fiscal year 2004, including the
period 1 October 2003 through 30 September 2004.

The contents of this report include the following:

• The types of foreign entities believed to be conducting industrial espionage.
• The kinds of information and technology targeted.
• The methods used by foreign actors to acquire that technology.

This report deals with the acquisition of sensitive US technology—either
classified or proprietary—by foreign entities, both government and private.
The acquisitions take a variety of forms, including:

• Economic Espionage, which is narrowly defined by Section 1831 of the
Economic Espionage Act of 1996 (EAA) to be the theft of trade secrets1
in which the perpetrator acts intending or knowing that the offense will
benefit any foreign government, foreign instrumentality, or foreign agent.
Proving links between foreign governments and entities caught stealing
US goods is often impossible, even where such links may exist.


• Industrial espionage or trade secret theft that cannot be linked to a foreign
government agent and where the acquisition has been made for the
intended economic benefit of someone other than the owner of the trade
secret. These violations are covered under Section 1832 of the EAA.

• Violations of export control regulations include the foreign acquisition of
restricted US dual-use technologies—having both military and civil
applications—by countries or persons that might apply such items to uses
inimical to US interests. These include goods that might be related to the
proliferation of weapons of mass destruction and their delivery means and
those that could bolster the military and terrorism support capability of
certain countries. Export Administration Regulations (EAR) issued by
the United States Department of Commerce, Bureau of Industry and
Security (BIS), cover these violations.

• Illegal exports of US arms and implements of war (including
cryptography) and defense technology to proscribed countries that could
misuse or cause illegal proliferation of those items. These shipments are
prohibited under the International Trade in Arms Regulations (ITAR),
which are administered by State Department’s Office of Defense Trade
Controls.

The paper highlights foreign efforts to target sensitive US technologies even
when those efforts are legal. For example, it is not illegal for foreign entities
to request classified or controlled information or technology, even
though the actual export of that technology would violate US laws. The fact
that such technologies are being targeted, however, is considered important
information for this report. This paper does not cover violations of US
copyright laws, such as the illegal plagiarism of videos, compact disks, or
other literary or artistic works.

This assessment is a product of a cooperative effort across the Counterintelligence
(CI) Community. It was compiled by the Office of the National
Counterintelligence Executive (ONCIX) based on input from a broad crosssection
of US Government entities. In particular, databases compiled by the
Defense Security Service (DSS), the Air Force Office of Special Investigations
(AFOSI), the Army Counterintelligence Center (ACIC), and the Army
Case Control Office (ACCO) were instrumental in providing much of the
detail for this assessment. The Federal Bureau of Investigation (FBI)—the
lead investigative agency for enforcing economic espionage statutes—provided
significant analytical and investigative information as did the Department
of Defense’s (DoD’s) Counterintelligence Field Activity (CIFA) and
the National Geospatial-Intelligence Agency (NGA).


Dublin core analysis

DC Title: Annual Report to Congress on Foreign Economic Collection and Industrial Espionage—2004
DC Creator: Office of the National Counterintelligence Executive (ONCIX)
DC Subject: Industrial espionage, Economic Espionage, Business Intelligence
DC Description: “The paper highlights foreign efforts to target sensitive US technologies even
when those efforts are legal. For example, it is not illegal for foreign entities
to request classified or controlled information or technology, even
though the actual export of that technology would violate US laws. The fact
that such technologies are being targeted, however, is considered important
information for this report. This paper does not cover violations of US
copyright laws, such as the illegal plagiarism of videos, compact disks, or
other literary or artistic works.”
DC Publisher: National Counterintelligence Executive (NCIX)
DC Contributor:
DC Date: 04-2005
DC Type: text
DC Format: PDF
DC Identifier: http://www.loyola.edu/dept/politics/intel/fecie/fecie_2004.pdf
DC Source:
DC Language: English
DC Relation:
DC Coverage: InternationalDC Rights:

Company Spies

DREYFUSS, Robert. Company spies. Motherjones (on line), June 1994 (accessible at http://www.motherjones.com/news/feature/1994/05/dreyfuss.html ). Consulted the 03-15-07.

Here is just an abstract. You can read the whole article by clicking the link above.

"Sometime in the not too distant future, you will probably drive a stolen car.
But the thieves won't be a neighborhood gang, nor will they be part of an organized crime ring. You will have papers to prove that you bought the car, and every month you will make payments to a bank. The bank, in turn, will show that it bought title from Ford, General Motors, or Chrysler.
But the Big Three U.S. auto companies will nonetheless be the recipients of stolen goods. And the perpetrator once again will be that expert at black-bag jobs, the Central Intelligence Agency.
When President Clinton announced last September that the federal government would join the Big Three in a cooperative research effort to improve U.S. automotive technology, he left out the fact that the CIA may be a silent partner. According to administration officials and sources in the intelligence community, the CIA has already begun a clandestine effort to help the American auto industry.
Since the end of the Cold War, Washington has been abuzz with talk about using the CIA for economic espionage. Stripped of euphemism, economic espionage simply means that American spies would target foreign companies, such as Toyota, Nissan, and Honda, and then covertly pass stolen trade secrets and technology to U.S. corporate executives.
R. James Woolsey, President Clinton's CIA director, has said repeatedly that the CIA will not engage in corporate spy work. Targeting foreign companies and giving that information to American companies is "fraught with legal and foreign policy difficulties," Woolsey says. But there is not the slightest hesitation among other top CIA officials that such information, when obtained, ought to be shared with American automakers.
The idea of using the U.S. intelligence community to give American companies an edge is an explosive subject that has divided the CIA and provoked bitter debate in Congress. It also raises troubling questions about whether a free society can accept the kind of help that the CIA provides when the question is not one of national defense but simply dollars and cents. "[...]


Dublin core analysis

DC Title: Company Spies
DC Creator: DREYFUSS, Robert
DC Subject: economic espionage, business spying, business intelligence, Central Intelligence Agency
DC Description: The CIA has provoked debate in American Congress by spying on foreign competitors of American companies especially in the car industry sector.
DC Publisher: Motherjones
DC Contributor:
DC Date: 06-1994
DC Type: text
DC Format: HTML
DC Identifier: http://www.motherjones.com/news/feature/1994/05/dreyfuss.html
DC Source:
DC Language: English
DC Relation:
DC Coverage: International
DC Rights:

The economic espionnage act of 1996

DESMET, Thierry Olivier. The economic espionage act of 1996: are we finally taking corporate spies seriously? Article published in the Huston journal of international law, volume 22, number1, 1999 (Accessible at: http://www.hjil.org/Articles/ArticleFiles/22_1_5.pdf ). Consulted the 11-30-06.

The article itself is very long. Here is just the table of contents and the introduction:

THE ECONOMIC ESPIONAGE ACT OF 1996: ARE WE FINALLY TAKING CORPORATE SPIES SERIOUSLY?
Thierry Olivier Desmet*
TABLE OF CONTENTS
I. INTRODUCTION..............................................................94
II. THE PROBLEMS OF INDUSTRIAL ESPIONAGE......................95
III. PRIOR LEGISLATION FOR TRADE SECRETS PROTECTION.....101
IV. THE ECONOMIC ESPIONAGE ACT OF 1996......................107
A. Legislative History...............................................107
B. EEA Provisions....................................................109
1. Section 1831.................................................109
2. Section 1832.................................................110
3. Section 1834.................................................112
4. Section 1835.................................................113
5. Section 1836.................................................114
6. Section 1837.................................................114
7. Section 1838.................................................115
8. Section 1839.................................................115

C. Cases..................................................................118
V. STRATEGIC IMPLICATIONS..............................................123
A. Litigation.............................................................123
B. Corporate Compliance..........................................125
VI. CONCLUSION...............................................................126



I. INTRODUCTION For many companies, information is the most important resource available. Many executives only realize the value of their corporation’s secrets when these secrets are stolen and disclosed to a competitor, resulting in huge economic losses.1 Since the end of the Cold War, American companies have increasingly been targeted by spies funded by competitors or foreign nations, or both, in search of trade secrets.2 The Economic Espionage Act of 1996 (EEA),3 enacted to facilitate the criminal prosecution of industrial spies,4 constitutes a new weapon against corporate spying. It makes the theft of proprietary economic information a felony and protects trade secrets at the federal level.5 By discouraging improper trade conduct by both foreign governments and private parties, it reflects Congress’s recognition of the need to protect U.S. technology from unethical business competitors. The EEA does so by providing severe criminal penalties for those prosecuted under its provisions.6
The scope of this Article is to analyze the EEA. Part II describes the nature of international and domestic economic espionage7 and why it is a threat to corporate success and national security. Part III looks at legislation in existence prior to the EEA and analyzes why that legislation failed to substantially curb the theft of trade secrets, particularly as it related to small businesses and information stolen by foreign participants. Part IV examines the EEA itself, its legislative history, and the case law that has emerged since its enactment. An analysis of the statute suggests that its provisions are very broad and that if not used selectively, it could potentially hamper the mobility of workers in the labor market, thereby reducing innovation and creativity in the U.S. economy. Part V considers the strategic implications of the Act for practitioners and corporations. This Article concludes, in Part VI, by suggesting a proactive plan allowing companies to protect their trade secrets from foreign spies and from their own employees who may sell that information to the highest bidder. Organizations that have implemented internal security programs are likely to be in the best position to protect their trade secrets from dishonest competitors while insulating themselves from a trade secrets prosecution.

Dublin core analysis

DC Title: The economic espionage act of 1996: are we finally taking corporate spies seriously?
DC Creator: DESMET, Thierry Olivier
DC Subject: economic espionage, industrial espionage, corporate spies, business intelligence, law
DC Description:
I. INTRODUCTION
II. THE PROBLEMS OF INDUSTRIAL ESPIONAGE
III. PRIOR LEGISLATION FOR TRADE SECRETS PROTECTION
IV. THE ECONOMIC ESPIONAGE ACT OF 1996
V. STRATEGIC IMPLICATIONS
VI. CONCLUSION
DC Publisher: Huston Journal of International Law
DC Contributor:
DC Date: 1999
DC Type: text

DC Format: PDF

DC Identifier: http://www.hjil.org/Articles/ArticleFiles/22_1_5.pdf
DC Source:
DC Language: English
DC Relation:
DC Coverage: US
DC Rights: