Legal and historical aspects of corporate espionage

Corporate espionage is and interesting topic and it mirrors espionage that is conducted by governments except for the fact that the activities are directed at commercial purposes as opposed to national security or other related items. Corporate espionage, also called industrial or economic espionage, encompasses a wide range of different activities that involve the illegal acquisition of trade secrets or other corporate information that can be used for financial gain by some other party. The most common forms will covertly uncover information about designs, methods, formulas, manufacturing processes, research, or future plans. Such information can be acquired by disloyal employees, students, private firms, online, or through many other such activities.

There is also a fine line between legally acquiring information and doing so in an illegal fashion and the rules that govern such questions vary significantly by location. The difference between competitive intelligence and corporate espionage would seem obvious: one is legally getting the information you need to run your business competitively; the other is creeping around and raking through your competitor's garbage; but it turns out that neither competitive intelligence nor the ethics surrounding the topic are taught much at business schools, according to academics familiar with the topic (Smith, 2012). Therefore many professionals may be crossing the line without even recognizing the fact that they are performing an action that could be deemed as illegal.

Notable Cases

While some forms of espionage are subtle, others are incredibly blatant; especially in developing countries. On January 5th, 2013, in a night raid, a gang of criminals broke into a factory near Shanghai owned by Mercury Cable, an American manufacturer of high-voltage equipment (The Economist, 2013). The thieves that orchestrated the robbery took not only raw materials but machinery from production lines as well. The business owners believe that the manufacturing company's local management was responsible for the heist but local police would not pursue the four managers who were implicated. The most dangerous local thieves are "PhD pirates," says Peter Humphrey of ChinaWhys, who consist of professionals such as managers, engineers, and scientists may work quietly for years inside multinationals, especially in research-intensive industries like pharmaceuticals and chemicals, before striking (The Economist, 2013).

Cases of cyber espionage are also becoming more salient in the last year. Last month, Congress signed into law an appropriations bill that requires four federal agencies to conduct an FBI-assisted security assessment when purchasing computers and other IT gear manufactured in China which predictably led to outspoken criticism from China who came out in strong opposition to the provision -- meant to shield the Justice Department, Department of Commerce, NASA, and the NSF against cyber espionage -- and now Silicon Valley is taking issue with the restrictions (Welch, 2013). Cyber espionage has become an increasingly easy target for developing countries that have increased their capacity for different technologies. This has led regulating bodies to take increasing actions to protect intellectual property.