Intellectual property theft creating “unprecedented threat”

Intellectual property theft from China creates an “unprecedented threat” against Western business, it has been claimed. 

It’s a danger that has been touted before, but now one of the West’s most prominent intergovernmental agencies has weighed in and given companies a stark warning. 

Might your business be affected? What can you do if it is?

This week, officials from the intelligence-sharing network Five Eyes warned that China was committing large-scale theft of intellectual property from Western businesses. 

 U.S. FBI Director Christopher Wray said the rare and bold statement from the network – comprising intelligence chiefs from the US, UK, Australia, Canada and New Zealand – was meant to confront the “unprecedented threat” China poses to innovation worldwide.

Yes. Government spokesman Liu Pengyu dismissed the allegations entirely, labelling them “groundless.” It’s in keeping with the broader Chinese reaction to persistent accusations of theft, which dismisses any espionage accusations as Western propaganda or hysteria. 

At its core, it’s when a person (or organisation) steals an idea or piece of work that you have created. It often has the extra caveat of being an idea or piece of work you legally own. 

The main types of intellectual property are:

• Copyrighted/patented material
• Trademarks
• Trade secrets

Intellectual property theft is a crime in most jurisdictions worldwide. Still, it becomes much more challenging to enforce across borders, especially between jurisdictions with strained diplomatic relations… like the US/EU and China.

Theft of intellectual property means bad actors can easily use your work to make money for themselves. This will cost you, whether it’s through direct competition or lost royalties from different markets. 

Eventually, a beneficiary of your intellectual property could arrive in your market and cause further disruption. 

Such a financial burden can seriously harm your business potential and spook shareholders. It could also rob you of any advantage your protected work gives you in your industry. 

American lawmakers have claimed that Chinese intellectual property theft can cost the US economy alone $600 billion per year.

Yes. It’s the most prominent intelligence network in the Western world and represents the interests of 470 million people and a combined nominal GDP of $34 trillion. 

Their words – especially words as direct as this – should cause alarm among businesses in those jurisdictions and ones with significant corporate overlap, such as the European Union.

The primary channels are digital hacking and extensive networks of corporate spies. The new capabilities of AI are only amalgamating the situation, Wray said.

It could be any company. Some data suggests smaller businesses, who usually have far less to spend on safeguarding corporate secrets, are worst affected.

It’s tricky because the issue is ultimately just one of many disagreements between Chinese and Western leaders. It’s hard to chase intellectual theft through all that rhetoric. There’s a lot that you may well have to leave to your elected leaders to figure out. 

What you can do is ensure that you have the right expertise on your board for what this situation calls for. Namely:

• Cybersecurity
• The proper use of AI and defence against those who would use AI with hostility
• Building trust with those within your organisation who know the most crucial corporate secrets. 

None of the three are easy to do, but they’re worth pursuing in an environment with open and bold accusations of vast corporate espionage. It’s best to be safe. 

You can read more about the story here.