Industrial espionage - wikipedia Industrial espionage Teapot with Actresses, Vezzi porcelain factory, Venice, c. 1725. The Vezzi brothers were involved in a series of incidents of industrial espionage. It was these actions that led to the secret of manufacturing Meissen porcelain becoming widely known. Industrial espionage, economic espionage, corporate spying or corporate espionage is a form of espionage conducted for commercial purposes instead of purely national security. Economic espionage is conducted or orchestrated by governments and is international in scope, while industrial or corporate espionage is more often national and occurs between companies or corporations. Contents 1 Competitive intelligence and economic or industrial espionage 2 Forms of economic and industrial espionage 3 Target industries 4 Information theft and sabotage 5 Agents and the process of collection 6 Use of computers and the Internet 6.1 Personal computers 6.2 The Internet 6.3 Opportunities for sabotage 6.4 Malware 6.5 Distributed denial of service ( DDoS ) attack 7 History 7.1 Origins 7.2 The 20th century 7.2. 1 `` Operation Brunnhilde '' 7.2. 2 Soviet spetsinformatsiya system 7.3 The legacy of Cold War espionage 8 Notable cases 8.1 France and the United States 8.2 Volkswagen 8.3 Hilton and Starwood 8.4 GhostNet 8.5 Google and Operation Aurora 8.6 CyberSitter and Green Dam 8.7 USA v. Lan Lee, et al. 8.8 Dongxiao Yue and Chordiant Software, Inc. 9 Concerns of national governments 9.1 Brazil 9.2 United States 9.3 United Kingdom 9.4 Germany 10 See also 11 References 12 Bibliography 13 External links Competitive intelligence and economic or industrial espionage `` Competitive intelligence '' describes the legal and ethical activity of systematically gathering, analyzing and managing information on industrial competitors. It may include activities such as examining newspaper articles, corporate publications, websites, patent filings, specialised databases, information at trade shows and the like to determine information on a corporation. The compilation of these crucial elements is sometimes termed CIS or CRS, a Competitive Intelligence Solution or Competitive Response Solution. With its roots in market research, `` competitive intelligence '' has been described as the `` application of principles and practices from military and national intelligence to the domain of global business '' ; it is the business equivalent of open - source intelligence. The difference between competitive intelligence and economic or industrial espionage is not clear ; one needs to understand the legal basics to recognize how to draw the line between the two. Others maintain it is sometimes quite difficult to tell the difference between legal and illegal methods, especially if considering the ethical side of information gathering, making the definition even more elusive. Forms of economic and industrial espionage Economic or industrial espionage takes place in two main forms. In short, the purpose of espionage is to gather knowledge about ( an ) organization ( s ). It may include the acquisition of intellectual property, such as information on industrial manufacture, ideas, techniques and processes, recipes and formulas. Or it could include sequestration of proprietary or operational information, such as that on customer datasets, pricing, sales, marketing, research and development, policies, prospective bids, planning or marketing strategies or the changing compositions and locations of production. It may describe activities such as theft of trade secrets, bribery, blackmail and technological surveillance. As well as orchestrating espionage on commercial organizations, governments can also be targets -- for example, to determine the terms of a tender for a government contract so that another tenderer can underbid. Target industries During testing, automakers commonly disguise upcoming car models with camouflage paint patterns designed to obfuscate the vehicle 's lines. Padded covers, or deceptive decals are also often used. This is also to prevent Motoring Media - outlets from spoiling the model 's big reveal. Economic and industrial espionage is most commonly associated with technology - heavy industries, including computer software and hardware, biotechnology, aerospace, telecommunications, transportation and engine technology, automobiles, machine tools, energy, materials and coatings and so on. Silicon Valley is known to be one of the world 's most targeted areas for espionage, though any industry with information of use to competitors may be a target. Information theft and sabotage Information can make the difference between success and failure ; if a trade secret is stolen, the competitive playing field is leveled or even tipped in favor of a competitor. Although a lot of information - gathering is accomplished legally through competitive intelligence, at times corporations feel the best way to get information is to take it. Economic or industrial espionage is a threat to any business whose livelihood depends on information. In recent years, economic or industrial espionage has taken on an expanded definition. For instance, attempts to sabotage a corporation may be considered industrial espionage ; in this sense, the term takes on the wider connotations of its parent word. That espionage and sabotage ( corporate or otherwise ) have become more clearly associated with each other is also demonstrated by a number of profiling studies, some government, some corporate. The United States government currently has a polygraph examination entitled the `` Test of Espionage and Sabotage '' ( TES ), contributing to the increasingly popular, though not consensus, notion, by those studying espionage and sabotage countermeasures, of the interrelationship between the two. In practice, particularly by `` trusted insiders, '' they are generally considered functionally identical for the purpose of informing countermeasures. Agents and the process of collection Economic or industrial espionage commonly occurs in one of two ways. Firstly, a dissatisfied employee appropriates information to advance interests or to damage the company. Secondly, a competitor or foreign government seeks information to advance its own technological or financial interest. `` Moles '', or trusted insiders, are generally considered the best sources for economic or industrial espionage. Historically known as a `` patsy '', an insider can be induced, willingly or under duress, to provide information. A patsy may be initially asked to hand over inconsequential information and, once compromised by committing a crime, bribed into handing over more sensitive material. Individuals may leave one company to take up employment with another and take sensitive information with them. Such apparent behavior has been the focus of numerous industrial espionage cases that have resulted in legal battles. Some countries hire individuals to do spying rather than use of their own intelligence agencies. Academics, business delegates, and students are often thought to be used by governments in gathering information. Some countries, such as Japan, have been reported to expect students be debriefed on returning home. A spy may follow a guided tour of a factory and then get `` lost ''. A spy could be an engineer, a maintenance man, a cleaner, an insurance salesman, or an inspector : anyone who has legitimate access to the premises. A spy may break into the premises to steal data and may search through waste paper and refuse, known as `` dumpster diving ''. Information may be compromised via unsolicited requests for information, marketing surveys or use of technical support or research or software facilities. Outsourced industrial producers may ask for information outside the agreed - upon contract. Computers have facilitated the process of collecting information because of the ease of access to large amounts of information through physical contact or the Internet. Use of computers and the internet Personal computers Computers have become key in exercising industrial espionage due to the enormous amount of information they contain and its ease of being copied and transmitted. The use of computers for espionage increased rapidly in the 1990s. Information has been commonly stolen by being copied from unattended computers in offices, those gaining unsupervised access doing so through subsidiary jobs, such as cleaners or repairmen. Laptops were, and still are, a prime target, with those traveling abroad on business being warned not to leave them for any period of time. Perpetrators of espionage have been known to find many ways of conning unsuspecting individuals into parting, often only temporarily, from their possessions, enabling others to access and steal information. A `` bag - op '' refers to the use of hotel staff to access data, such as through laptops, in hotel rooms. Information may be stolen in transit, in taxis, at airport baggage counters, baggage carousels, on trains and so on. The internet The rise of the internet and computer networks has expanded the range and detail of information available and the ease of access for the purpose of industrial espionage. Worldwide, around 50,000 companies a day are thought to come under cyberattack with the rate estimated as doubling each year. This type of operation is generally identified as state backed or sponsored, because the `` access to personal, financial or analytic resources '' identified exceed that which could be accessed by cybercriminals or individual hackers. Sensitive military or defense engineering or other industrial information may not have immediate monetary value to criminals, compared with, say, bank details. Analysis of cyberattacks suggests deep knowledge of networks, with targeted attacks, obtained by numerous individuals operating in a sustained organized way. Opportunities for sabotage The rising use of the internet has also extended opportunities for industrial espionage with the aim of sabotage. In the early 2000s, it was noticed that energy companies were increasingly coming under attack from hackers. Energy power systems, doing jobs like monitoring power grids or water flow, once isolated from the other computer networks, were now being connected to the internet, leaving them more vulnerable, having historically few built - in security features. The use of these methods of industrial espionage have increasingly become a concern for governments, due to potential attacks by terrorist groups or hostile foreign governments. Malware One of the means of perpetrators conducting industrial espionage is by exploiting vulnerabilities in computer software. Malware and spyware as `` a tool for industrial espionage '', in `` transmitting digital copies of trade secrets, customer plans, future plans and contacts ''. Newer forms of malware include devices which surreptitiously switch on mobile phones camera and recording devices. In attempts to tackle such attacks on their intellectual property, companies are increasingly keeping important information off network, leaving an `` air gap '', with some companies building `` Faraday cages '' to shield from electromagnetic or cellphone transmissions. Distributed denial of service ( DDoS ) attack The distributed denial of service ( DDoS ) attack uses compromised computer systems to orchestrate a flood of requests on the target system, causing it to shut down and deny service to other users. It could potentially be used for economic or industrial espionage with the purpose of sabotage. This method was allegedly utilized by Russian secret services, over a period of two weeks on a cyberattack on Estonia in May 2007, in response to the removal of a Soviet era war memorial. History Origins The work of Father Francois Xavier d'Entrecolles to reveal to Europe the manufacturing methods of Chinese porcelain in 1712, is sometimes considered an early case of industrial espionage Economic and industrial espionage has a long history. The work of Father Francois Xavier d'Entrecolles in Jingdezhen, China to reveal to Europe the manufacturing methods of Chinese porcelain in 1712 is sometimes considered an early case of industrial espionage. Historical accounts have been written of industrial espionage between Britain and France. Attributed to Britain 's emergence as an `` industrial creditor '', the second decade of the 18th century saw the emergence of a large - scale state - sponsored effort to surreptitiously take British industrial technology to France. Witnesses confirmed both the inveigling of tradespersons abroad and the placing of apprentices in England. Protests by those such as iron workers in Sheffield and steel workers in Newcastle, about skilled industrial workers being enticed abroad, led to the first English legislation aimed at preventing this method of economic and industrial espionage. The 20th century East - West commercial development opportunities after World War I saw a rise in Soviet interest in American and European manufacturing know - how, exploited by Amtorg Corporation. Later, with Western restrictions on the export of items thought likely to increase military capabilities to the USSR, Soviet industrial espionage was a well known adjunct to other spying activities up until the 1980s. BYTE reported in April 1984, for example, that although the Soviets sought to develop their own microelectronics, their technology appeared to be several years behind the West 's. Soviet CPUs required multiple chips and appeared to be close or exact copies of American products such as the Intel 3000 and DEC LSI - 11 / 2. `` Operation Brunnhilde '' Some of these activities were directed via the East German Stasi ( Ministry for State Security ). One such operation, known as `` Operation Brunnhilde '' operated from the mid-1950s until early 1966 and made use of spies from many Communist Bloc countries. Through at least 20 forays, many western European industrial secrets were compromised. One member of the `` Brunnhilde '' ring was a Swiss chemical engineer, Dr. Jean Paul Soupert ( also known as `` Air Bubble '' ), living in Brussels. He was described by Peter Wright in Spycatcher as having been `` doubled '' by the Belgian Sûreté de l'État. He revealed information about industrial espionage conducted by the ring, including the fact that Russian agents had obtained details of Concorde 's advanced electronics system. He testified against two Kodak employees, living and working in Britain, during a trial in which they were accused of passing information on industrial processes to him, though they were eventually acquitted. Soviet spetsinformatsiya system A secret report from the Military - Industrial Commission of the USSR ( VPK ), from 1979 -- 80, detailed how spetsinformatsiya ( Russian : специнформация i.e. `` special records '' ) could be utilised in twelve different military industrial areas. Writing in the Bulletin of the Atomic Scientists, Philip Hanson detailed a spetsinformatsiya system in which 12 industrial branch ministries formulated requests for information to aid technological development in their military programs. Acquisition plans were described as operating on 2 year and 5 year cycles with about 3000 tasks under way each year. Efforts were aimed at civilian as well as military industrial targets, such as in the petrochemical industries. Some information was garnered so as to compare levels of competitor to Soviet technological advancement. Much unclassified information was also gathered, blurring the boundary with `` competitive intelligence ''. The Soviet military was recognised as making much better use of acquired information, compared to civilian industry, where their record in replicating and developing industrial technology was poor. The legacy of Cold War espionage Following the demise of the Soviet Union and the end of the Cold War, commentators, including the US Congressional Intelligence Committee, noted a redirection amongst the espionage community from military to industrial targets, with Western and former communist countries making use of `` underemployed '' spies and expanding programs directed at stealing such information. The legacy of Cold War spying included not just the redirection of personnel but the use of spying apparatus such as computer databases, scanners for eavesdropping, spy satellites, bugs and wires. Notable cases France and the United States Between 1987 and 1989, IBM and Texas Instruments were thought to have been targeted by French spies with the intention of helping France 's Groupe Bull. In 1993, U.S. aerospace companies were also thought to have been targeted by French interests. During the early 1990s, France was described as one of the most aggressive pursuers of espionage to garner foreign industrial and technological secrets. France accused the U.S. of attempting to sabotage its high tech industrial base. The government of France has been alleged to have conducted ongoing industrial espionage against American aerodynamics and satellite companies. Volkswagen In 1993, car manufacturer Opel, the German division of General Motors, accused Volkswagen of industrial espionage after Opel 's chief of production, Jose Ignacio Lopez, and seven other executives moved to Volkswagen. Volkswagen subsequently threatened to sue for defamation, resulting in a four - year legal battle. The case, which was finally settled in 1997, resulted in one of the largest settlements in the history of industrial espionage, with Volkswagen agreeing to pay General Motors $100 million and to buy at least $1 billion of car parts from the company over 7 years, although it did not explicitly apologize for Lopez 's behavior. Hilton and Starwood In April 2009 the US based hospitality company Starwood accused its rival Hilton of a `` massive '' case of industrial espionage. After being purchased by private equity group Blackstone, Hilton employed 10 managers and executives from Starwood. Under intense pressure to improve profits, Starwood accused Hilton of stealing corporate information relating to its luxury brand concepts, used in setting up its own Denizen hotels. Specifically, former head of its luxury brands group, Ron Klein, was accused of downloading `` truckloads of documents '' from a laptop to his personal email account. Ghostnet GhostNet was a `` vast surveillance system '' reported by Canadian researchers based at the University of Toronto in March 2009. Using targeted emails it compromised thousands of computers in governmental organisations, enabling attackers to scan for information and transfer this back to a `` digital storage facility in China ''. Google and operation Aurora On 13 January 2010, Google Inc. announced that operators, from within China, had hacked into their Google China operation, stealing intellectual property and, in particular, accessing the email accounts of human rights activists. The attack was thought to have been part of a more widespread cyber attack on companies within China which has become known as Operation Aurora. Intruders were thought to have launched a zero - day attack, exploiting a weakness in the Microsoft Internet Explorer browser, the malware used being a modification of the trojan `` Hydraq ''. Concerned about the possibility of hackers taking advantage of this previously unknown weakness in Internet Explorer, the governments of Germany and, subsequently France, issued warnings not to use the browser. There was speculation that `` insiders '' had been involved in the attack, with some Google China employees being denied access to the company 's internal networks after the company 's announcement. In February 2010, computer experts from the U.S. National Security Agency claimed that the attacks on Google probably originated from two Chinese universities associated with expertise in computer science, Shanghai Jiao Tong University and the Shandong Lanxiang Vocational School, the latter having close links to the Chinese military. Google claimed at least 20 other companies had also been targeted in the cyber attack, said by the London Times, to have been part of an `` ambitious and sophisticated attempt to steal secrets from unwitting corporate victims '' including `` defence contractors, finance and technology companies ''. Rather than being the work of individuals or organised criminals, the level of sophistication of the attack was thought to have been `` more typical of a nation state ''. Some commentators speculated as to whether the attack was part of what is thought to be a concerted Chinese industrial espionage operation aimed at getting `` high - tech information to jump - start China 's economy ''. Critics pointed to what was alleged to be a lax attitude to the intellectual property of foreign businesses in China, letting them operate but then seeking to copy or reverse engineer their technology for the benefit of Chinese `` national champions ''. In Google 's case, they may have ( also ) been concerned about the possible misappropriation of source code or other technology for the benefit of Chinese rival Baidu. In March 2010 Google subsequently decided to cease offering censored results in China, leading to the closing of its Chinese operation. CyberSitter and Green Dam The US based firm CyberSitter announced in January 2010 that it was suing the Chinese government, and other US companies, for stealing its anti pornography software, with the accusation that it had been incorporated into China 's Green Dam program, used by the state to censor children 's internet access. CyberSitter accused Green Dam creators as having copied around 3000 lines of code. They were described as having done ' a sloppy job of copying, ' with some lines of the copied code continuing to direct people to the CyberSitter website. The attorney acting for CyberSitter maintained `` I do n't think I have ever seen such clear - cut stealing ''. USA v. Lan Lee, et al. The United States charged two former NetLogic Inc. engineers, Lan Lee and Yuefei Ge, of committing economic espionage against TSMC and NetLogic, Inc. A jury acquitted the defendants of the charges with regard to TSMC and deadlocked on the charges with regard to NetLogic. In May 2010, a federal judge dismissed all the espionage charges against the two defendants. The judge ruled that the U.S. Government presented no evidence of espionage. Dongxiao Yue and Chordiant software, Inc. In May 2010, the federal jury convicted Chordiant Software, Inc., a U.S. corporation, of stealing Dongxiao Yue 's JRPC technologies and used them in a product called Chordiant Marketing Director. Yue previously filed lawsuits against Symantec Corporation for a similar theft. Concerns of national governments Brazil Revelations from the Snowden documents have provided information to the effect that the United States, notably vis - à - vis the NSA, has been conducting aggressive economic espionage against Brazil. Canadian intelligence has apparently supported U.S. economic espionage efforts. United States According to Edward Snowden, The National Security Agency spies on foreign companies. A recent report to the US government, by aerospace and defense company Northrop Grumman, describes Chinese economic espionage as comprising `` the single greatest threat to U.S. technology ''. Joe Stewart, of SecureWorks, blogging on the 2009 cyber attack on Google, referred to a `` persistent campaign of ' espionage - by - malware ' emanating from the People 's Republic of China ( PRC ) '' with both corporate and state secrets being `` Shanghaied '' over the past 5 or 6 years. The Northrop Grumann report states that the collection of US defense engineering data through cyberattack is regarded as having `` saved the recipient of the information years of R&D and significant amounts of funding ''. Concerns about the extent of cyberattacks on the US emanating from China has led to the situation being described as the dawn of a `` new cold cyberwar ''. In response to these and other reports, Amitai Etzioni of the Institute for Communitarian Policy Studies has suggested that China and the United States should agree to a policy of mutually assured restraint with respect to cyberspace. This would involve allowing both states to take the measures they deem necessary for their self - defense while simultaneously agreeing to refrain from taking offensive steps ; it would also entail vetting these commitments. In June 2015 Wikileaks published documents over National Security Agency spied French companies. United Kingdom In December 2007, it was revealed that Jonathan Evans, head of the United Kingdom 's MI5, had sent out confidential letters to 300 chief executives and security chiefs at the country 's banks, accountants and legal firms warning of attacks from Chinese ' state organisations '. A summary was also posted on the secure website of the Centre for the Protection of the National Infrastructure, accessed by some of the nation 's ' critical infrastructure ' companies, including ' telecoms firms, banks and water and electricity companies '. One security expert warned about the use of ' custom trojans, ' software specifically designed to hack into a particular firm and feed back data. Whilst China was identified as the country most active in the use of internet spying, up to 120 other countries were said to be using similar techniques. The Chinese government responded to UK accusations of economic espionage by saying that the report of such activities was ' slanderous ' and that the government opposed hacking which is prohibited by law. Germany German counter-intelligence experts have maintained the German economy is losing around € 53 billion or the equivalent of 30,000 jobs to economic espionage yearly. In Operation Eikonal German BND agents received `` selector lists '' from the NSA -- search terms for their dragnet surveillance. They contain IP addresses, mobile phone numbers and email accounts with the BND surveillance system containing hundreds of thousands and possibly more than a million such targets. These lists have been subject of controversy as in 2008 it was revealed that they contained some terms targeting the European Aeronautic Defence and Space Company ( EADS ), the Eurocopter project as well as French administration, which were first noticed by BND employees in 2005. After the revelations made by whistleblower Edward Snowden the BND decided to investigate the issue whose October 2013 conclusion was that at least 2,000 of these selectors were aimed at Western European or even German interests which has been a violation of the Memorandum of Agreement that the US and Germany signed in 2002 in the wake of the 9 / 11 terror attacks. After reports emerged in 2014 that EADS and Eurocopter had been surveillance targets the Left Party and the Greens filed an official request to obtain evidence of the violations. The BND 's project group charged with supporting the NSA investigative committee in German parliament set up in spring 2014, reviewed the selectors and discovered 40,000 suspicious search parameters, including espionage targets in Western European governments and numerous companies. The group also confirmed suspicions that the NSA had systematically violated German interests and concluded that the Americans could have perpetrated economic espionage directly under the Germans ' noses. The investigative parliamentary committee was not granted access to the NSA 's selectors list as an appeal led by opposition politicians failed at Germany 's top court - instead the ruling coalition appointed an administrative judge, Kurt Graulich, as a `` person of trust '' who was granted access to the list and briefed the investigative commission on its contents after analyzing the 40,000 parameters. In his almost 300 - paged report Graulich concluded that European government agencies were targeted massively and that Americans hence broke contractual agreements. He also found that German targets which received special protection from surveillance of domestic intelligence agencies by Germany 's Basic Law ( Grundgesetz ) − including numerous enterprises based in Germany -- were featured in the NSA 's wishlist in a surprising plenitude. 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External links Comparing Insider IT Sabotage and Espionage : A Model - Based Analysis Spooky Business : Corporate Espionage Against Nonprofit Organizations Spooky Business : U.S. Corporations Enlist Ex-Intelligence Agents to Spy on Nonprofit Groups Pt 2 : U.S. Corporations Enlist Ex-Intelligence Agents to Spy on Nonprofit Groups Corporate Espionage Undermines Democracy Intelligence Online -- Investigative news and reporting on industrial espionage and business intelligence ( subscription and pay - per - article site ) Espionage Agents Assets Agent handling Field agent Non-official cover sockpuppet strawperson Official cover Resident spy Analysis Intelligence assessment cognitive traps competing hypotheses Devices and communications Concealment device Covert listening device Cryptography Cut - out Dead drop USB Invisible ink Numbers station One - way voice link Short - range agent communications Steganography microdot Operations Black operation black bag Wetwork Eavesdropping SIGINT MASINT False flag Industrial espionage Interpersonal ( HUMINT ) intelligence interrogation safe house surveillance COINTELPRO MINARET SHAMROCK Intelligence management Collection Interpersonal ( HUMINT ) Special reconnaissance organizations Clandestine Asset recruiting Cell system Covert action Direct action Operational techniques Espionage Agents field handling Asset Black operation black bag Concealment device Cryptography Cut - out Dead drop Denial and deception Eavesdropping False flag Industrial espionage Intelligence assessment Interrogation Numbers station Official cover Non-official One - way voice link Resident spy Steganography Surveillance Signals ( SIGINT ) By alliances, nations and industries In modern history Operational platforms by nation Direction finding Traffic analysis TEMPEST Measurement and signature ( MASINT ) Electro - optical Geophysical Nuclear Radar Radiofrequency Materials Casualty estimation ( earthquake ) Other Cultural ( CULTINT ) Financial ( FININT ) Geospatial ( GEOINT ) Imagery ( IMINT ) Market ( MARKINT ) Open - source ( OSINT ) Technical ( TECHINT ) Analysis Cognitive traps Competing hypotheses Target - centric Words of estimative probability Dissemination Intelligence cycle security Counterintelligence organizations Counterintelligence and counter-terrorism organizations Jump up ^ Stewart, Joe. `` Operation Aurora : Clues in the Code ''. 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Question: who was considered to be the first industrial spy
Answer: Father Francois Xavier d'Entrecolles in Jingdezhen, China