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U.S. Senators Introduce 'Deter Cyber Theft Act' to Help Protect Trade Secrets

A bi-partisan group of Senators introduced a new bill to fight cyber-espionage and intellectual property theft by foreign countries.

The proposed "Deter Cyber Theft Act" aims to block products that contain intellectual property stolen from U.S. companies by foreign countries from being sold in the United States. The bill was co-sponsored by Sens. Carl Levin (D-MI), Jay Rockefeller (D-WV), John McCain (R-Ariz), and Tom Coburn (R-OK) and introduced in the Senate Wednesday.

China is frequently accused of supporting cyber-espionage attacks against U.S. government and commercial networks. Just a day earlier, a U.S. Department of Defense report to Congress directly accused the Chinese government and military of supporting cyber-intrusions against U.S. networks for information relevant to diplomatic, economic, and defense industrial base sectors. China, as expected, denied the accusation, but these claims have been getting louder from both public officials and private sector over the past year.

U.S. SenateThe U.S. needed to take "aggressive new steps" to combat cyber-espionage and "hit the thieves where it hurts most — in their wallets, by blocking imports of products or from companies that benefit from this theft," Levin, chairman of the Armed Services Committee, said in a statement.

China is "by far the largest source" of theft against U.S. companies, according to Levin.

If the bill passes, the Director of National Intelligence would be required to compile an annual report identifying foreign countries which are involved in economic or industrial cyber-espionage against the U.S and flag the most persistent offenders. The report would also include what information was targeted, what intellectual property was actually stolen, and what products or technology was created using that stolen information. The report would list names of foreign companies and government entities which benefitted from the theft. Finally, the report would also list what steps the DNI and other US federal agencies had taken to prevent the theft.

The proposed bill elevates "cyber theft as a national security priority," Rockefeller said.

The bill goes further than just naming-and-shaming the countries that steal technology from the U.S. In its current form, the bill would requires the president to take action within 120 days of the report to block the import of products that benefitted from cyber-espionage. The definition is fairly broad, including products which contain the stolen technology, those made by "state-controlled enterprises" of nations included in the DNI watch list, and those manufactured by companies listed in the report.

"We must cut demand for stolen trade secrets by holding countries who engage in cyber theft accountable for their illegal activities and by preventing products that use stolen information from entering the U.S. market," Rockefeller said in a statement.

The Deter Cyber Theft Act (PDF) was crafted to combat what Gen. Keith Alexander, head of the National Security Agency and commander of U.S. Cyber Command called “the greatest transfer of wealth in history,” the lawmakers said in a statement. U.S. companies invest billions every year in research and development, only to have their results stolen by foreign companies and nations who then use it to compete against American companies and workers.

"This bill provides the President with the authority to target those who are attempting to unfairly and illegally benefit from cyber crime at the expense of America’s interests,” said McCain.

Fahmida Y. Rashid is a contributing writer for SecurityWeek. She has experience writing and reviewing security, core Internet infrastructure, open source, networking, and storage. Before setting out her journalism shingle, she spent nine years as a help-desk technician, software and Web application developer, network administrator, and technology consultant.