Trade Secret “Watch List”: Bill Would Establish Monitoring List of Countries Engaging in Cybertheft, and Make U.S. Intelligence Czar the Point Person

Here’s another sign of the rising urgency of trade secret theft as a national security issue: the Chairman of the Senate Armed Services Committee wants the head of the nation’s intelligence bureaucracy to track countries that allow cyber theft.

On May 7, 2013, Senator Carl Levin (D-Michigan) introduced a bill (S. 884) that would establish a “watch list” and a “priority watch list” of countries that facilitate or engage in cyber theft of trade secrets from the United States.

Called the “Deter Cyber Theft Act,” the bill would require the Director of National Intelligence (DNI) to develop and maintain watch lists of foreign countries “that engage in economic or industrial espionage in cyberspace with respect to United States trade secrets or proprietary information,” and provide a report of these lists annually to the appropriate congressional committees.  By identifying the DNI as point person, Levin is making a strong statement that he regards trade secret theft via computers as a major national security threat: the DNI post was established as a response to the September 11 attacks, and the DNI’s job is to integrate the federal government’s intelligence-gathering and analysis across all agencies. The DNI is also the principal intelligence advisor to the President.

Among other steps, the report would identify technologies and information targeted for cyber theft. It would also identify products manufactured using, services provided based on, and foreign entities who have benefited from, such stolen information.

If enacted, the bill would not just keep track of cyber theft, but also have a significant bite:  it would require the President to “direct U.S. Customs and Border Protection” to bar imports from foreign countries on the watch list to enforce intellectual property rights and to protect the integrity of the Department of Defense supply chain.

While the details are likely to get hashed out as the bill works through committee, and it remains to be seen how it will interplay with investigations before the International Trade Commission, cyber attacks and thefts have certainly grabbed Congress’s attention.