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Office of the Intellectual Property Enforcement Coordinator<br />

crash injury research. The device would later be<br />

perfected by Nils Bohlin at Volvo. Other seatbelt<br />

research would be conducted at the University of<br />

Minnesota by James “Crash” Ryan in 1963, further<br />

pushing forward the science of safety.<br />

But this kind of success story does not exist in<br />

isolation and cannot survive without the proper<br />

regulatory framework.<br />

ACTION NO. 4.18: Foster broader recognition<br />

of the promise of university-led research<br />

and development as a driver of innovation.<br />

The Federal Government will work with other<br />

countries, bilaterally and through appropriate<br />

multilateral fora, to advocate for IP systems<br />

that help enable university-led research to drive<br />

innovation.<br />

F. SUPPORT STRATEGIES THAT MITIGATE THE THEFT<br />

OF U.S. TRADE SECRETS.<br />

U.S. companies face a growing and persistent threat by<br />

individuals, rival companies, and foreign governments<br />

that seek to steal some of their most valuable intangible<br />

assets—their trade secrets. 42 Trade secrets consist of<br />

non-public, commercially valuable information, including<br />

confidential formulae, programs, devices, processes or<br />

techniques for manufacturing a product. 43 “Protecting the<br />

trade secrets of American businesses sustains the integrity<br />

and competitiveness of the American economy, and<br />

encourages the development of new products, including<br />

advanced technologies.” 44<br />

As reported in the U.S. “Strategy on Mitigating the<br />

Theft of U.S. Trade Secrets,” issued in February 2013,<br />

“[e]merging trends indicate that the pace of economic<br />

espionage and trade secret theft against U.S. corporations<br />

is escalating.” 46 However, the exact cost of trade secret<br />

theft has gone largely unknown due to the difficulty in<br />

measuring such losses. 47<br />

Advancements in technology, increased mobility,<br />

globalization, and the anonymous nature of the Internet<br />

together contribute to growing challenges in protecting<br />

trade secrets. Bad actors acquire trade secrets in a<br />

variety of ways. In addition to taking photos, making<br />

sketches, or asking detailed technical questions about<br />

technologies on display at conferences, conventions<br />

and trade shows—methods that have been exploited<br />

for years—rogue actors are increasingly targeting the<br />

electronic information databases of U.S. companies, law<br />

firms, academia and financial institutions. Indeed, hacking<br />

is emerging as the preferred method of trade secret theft,<br />

given that, through a single breach, one person can steal<br />

FIG. 62: Economic Impact of a Trade Secret Theft Event. 45<br />

Total impact of a TST<br />

event in dollar terms<br />

Decrease in<br />

financial<br />

performance<br />

Decrease in<br />

customer trust<br />

& loyalty<br />

Decrease in<br />

innovation<br />

Decrease in<br />

stakeholder<br />

perception<br />

Market<br />

competitiveness<br />

Cost of direct<br />

impact mitigation<br />

Product and<br />

service quality<br />

Personal data<br />

protection<br />

Customer<br />

security risk<br />

Direct impacts<br />

Indirect impacts<br />

Note: this chart is illustrative<br />

Innovation<br />

speed<br />

Attracting and<br />

keeping talented<br />

engineers<br />

Investors<br />

Regulators &<br />

government<br />

NGOs<br />

Traditional and<br />

social media<br />

Business<br />

partners<br />

SECTION 4<br />

Source: The Center for Responsible Enterprise and Trade and PricewaterhouseCoopers LLP.<br />

141

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