Industrial Espionage #1 Unveiling the Shadows
Understanding and Combating Industrial Espionage
Industrial espionage, also known as corporate espionage or economic espionage, involves the theft or unauthorized acquisition of trade secrets, proprietary information, or intellectual property from a business or organization for the benefit of a competitor, foreign government, or other entity.
Industries such as technology, pharmaceuticals, aerospace, manufacturing, energy, and finance are particularly susceptible to this global phenomenon, impacting various businesses, including those in Canada.
Here are some notable cases:
Nortel Networks:
a Canadian telecommunications company, was a victim of one of the most high-profile cases of industrial espionage. In the early 2000s, it was revealed that cyber attackers, believed to have links to China, had gained unauthorized access to Nortel’s systems over a period of years. The attackers allegedly stole sensitive technical documents and trade secrets, contributing to Nortel’s decline and eventual bankruptcy.
Bombardier:
In 2014, it was reported that documents related to Bombardier’s C-Series commercial jet program were stolen and offered to rival aircraft manufacturers. While the exact details and outcomes of the case remain somewhat unclear, it highlights the potential vulnerability of valuable intellectual property.
Furthermore, Canada’s spy agency, CSIS, in 2021 revealed that foreign espionage and interference reached its highest level in 2020 since the end of the Cold War. A parliamentary report highlights how some foreign states, including China, are intensifying their espionage efforts, particularly targeting research in science, technology, and vaccine development. The report raises concerns about programs like China’s Thousand Talents Program, which lures Chinese scientists abroad to share research, potentially transferring intellectual property to China.
Industrial espionage can stem from diverse motivations, ranging from gaining competitive advantage and cost savings to accessing new markets and reaping economic benefits. Theft of intellectual property and black market opportunities are also driving factors.
Legal protection against industrial espionage is limited
Despite the complexity, legal protection against industrial espionage is limited in Canada.
Organizations need to be vigilant about protecting their sensitive information and implementing robust security measures to prevent and mitigate the risks associated with this phenomenon. Surprisingly, even though actions like theft and fraud seem to describe the offense, the courts have not applied these provisions. The available provisions, like unauthorized computer use (section 342.110), are quite narrow and mostly target individual wrongdoers, not the larger companies or corporations that might have influenced them to engage in such activities. Similarly, under tort law, the unauthorized disclosure or use of trade secrets can be addressed through a breach of confidence claim.
This claim involves three key elements.
Firstly, the information must be confidential. Secondly, the information must have been shared under circumstances implying an obligation of confidence. Lastly, there should be unauthorized use of the information by the recipient (referred to as the “confidee”), resulting in harm to the disclosing party. Despite these provisions, the Canadian Criminal Code currently offers relatively little recourse for victims of industrial espionage.
Private Investigators fortify defenses against industrial espionage
Private Investigators emerge as key allies for corporate clients grappling with industrial espionage. Their expertise encompasses risk assessment, background checks, surveillance, digital forensics, and competitor analysis. They can also conduct undercover operations, internal investigations, and evidence gathering. Collaborating with legal experts, they devise strategies for legal action, offering testimony and evidence in court if needed.
By leveraging their knowledge, Private Investigators empower organizations to fortify defenses against industrial espionage, safeguarding sensitive information and proprietary assets.
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