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Theft of intellectual property at an all-time high in China



Published: Fri, February 22, 2013 @ 12:00 a.m.

China has never had a reputa- tion for respecting intellectual property.

Former U.S. Sen. George Voinovich has told the story for years about a counterfeit pump manufactured in China that was virtually indistinguishable from the real thing built in Canton. Not only was the design of the pump stolen, but the packaging and even the directions were reproduced by the counterfeiters.

But recent events and a report issued this week by the Alexandria, Virginia-based cybersecurity firm Mandiant make a convincing case that China is taking industrial spying and theft of intellectual property to a whole new level.

Mandiant said it found cyber attacks on 141 entities, mostly in the United States but also in Canada, Britain and elsewhere. Attackers stole information about pricing, contract negotiations, manufacturing, product testing and corporate acquisitions, the Associated Press reported.

But according to Mandiant, these were not generic Chinese attacks; they came from a Chinese military unit in Shanghai. Further, target companies were in four of the seven strategic industries identified in the Communist Party’s latest five-year development plan, Mandiant said.

The Chinese government denies any involvement in the cyber spying described in the Mandiant report and alleged by others. But that denial would be persuasive only if China operated on a more autonomous Western-style capitalistic model. But in China, where the government sets the economic, technological and industrial goals and controls production, the suggestion that rogue operators in Shanghai are operating beneath the official radar is absurd. Security specialists and academics in South Korea and Australia, among others, are equally convinced that China is supporting a robust spying network. And there seems to be little doubt in the Obama administration or in Congress.

The Chicago Tribune reports that U.S. intelligence officials believe China has mounted a concerted campaign to siphon intellectual property and feed it to state-sponsored industries to save on research-and-development costs. And U.S. Rep. Adam Schiff, D-Calif., a member of the House Intelligence Committee, said the pace of cyberthefts from China has accelerated over the last six months.

The administration unveiled a plan that it said includes a diplomatic push to discourage intellectual property theft abroad, along with better coordination at home to help U.S. companies protect themselves. That push better have some weight behind it, otherwise past practice suggests China will ignore it.

This is not an academic issue. It has potential serious consequences for almost every American industry and every intellectual endeavor.

A former Vindicator sports editor, Chuck Perazich, had a saying, “there’s always a hometown connection.” And that saying wasn’t only true for Super Bowls or World Series games or the running of the Kentucky Derby.

Cutting edge work

There is cutting edge working being done at companies here in Youngstown and at the National Additive Manufacturing Innovation Institute. The people of the Mahoning Valley can appreciate the dangers of cyber spying. The idea that years of work and millions of dollar spent developing cutting edge technology could be purloined by a cyber thief on the other side of the world is sobering.

No matter how tight security may be, the possibility of a breach exists. That makes it doubly important that the United States combat cyber spying with the most sophisticated tools it has and that Washington makes it clear to China and others that intellectual-property thieves will not be treated as valued trade partners.


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