* Technology allows trade-secret theft across borders
* Holder says threat includes "companies and even countries"
* Mixed reaction from U.S. business groups
WASHINGTON, Feb 20 (Reuters) - Faced with the growing theft
of U.S. trade secrets, the White House said on Wednesday it was
stepping up diplomatic pressure and mulling tougher laws to stem
the threat to American businesses and security from China and
The plan includes working with like-minded governments to
put pressure on bad actors, using trade policy tools, increasing
criminal prosecutions and launching a 120-day review to see
whether new U.S. legislation is needed.
"A hacker in China can acquire source code from a software
company in Virginia without leaving his or her desk," U.S.
Attorney General Eric Holder said at a White House event to
unveil the strategy.
Although the White House report did not cite China by name,
many see the Asian giant as the main threat. A study released
this week by a private security firm accused the Chinese
military of orchestrating numerous cyber attacks against U.S.
businesses, a charge Beijing has denied.
The Obama administration said its strategy aims to counter
what Holder called "a significant and steadily increasing threat
to America's economy and national security interests."
"As new technology has torn down traditional barriers to
international business and global commerce, they also make it
easier for criminals to steal secrets and to do so from
anywhere, anywhere in the world," Holder said.
Last week, Representative Dutch Ruppersberger, the top
Democrat on the House of Representatives Intelligence Committee,
said U.S. companies suffered estimated losses in 2012 of more
than $300 billion due to theft of trade secrets, a large share
due to Chinese cyber espionage.
The White House report listed 17 cases of trade-secret theft
by Chinese companies or individuals since 2010, far more than
any other country mentioned in the report.
U.S. corporate victims of trade-secret theft have included
General Motors, Ford, DuPont, Dow Chemical, Motorola, Boeing and
Cargill. A target company can see the payoff from research
investment evaporate as a result of corporate espionage and lose
market position, competitive advantage and efficiencies.
"We have repeatedly raised our concerns about trade-secret
theft by any means at the highest levels with senior Chinese
officials and we will continue to do so," said Robert Hormats,
an undersecretary of state.
Those cases cited mostly involved employees stealing trade
secrets on the job rather than cyber attacks.
Victoria Espinel, the White House intellectual property
rights enforcement coordinator, said the effort aims to protect
the innovation that drives the U.S. economy and job creation.
Cybersecurity and intelligence experts welcomed the White
House plan as a first step, but some said much more needed to be
"You've got a nation-state taking on private corporations,"
said former CIA Director Michael Hayden. "That's kind of
unprecedented ... We have not approached resolution with this at
The U.S. Chamber of Commerce, the nation's largest business
lobby, offered a lukewarm statement of support, while other
industry groups expressed more enthusiasm for the effort.
"We strongly endorse and applaud the administration's focus
on curbing theft of trade secrets, which poses a serious and
growing threat to the software industry around the world," said
Business Software Alliance President and CEO Robert Holleyman.
The report that laid out the strategy repeated a 2011 White
House recommendation that the maximum sentence for economic
espionage be increased to at least 20 years, from 15 currently.
Another part of the solution is promoting a set of "best
practices" that companies can use to protect themselves against
cyber attacks and other espionage, Espinel said.
The report also said the U.S. Federal Bureau of
Investigation was "expanding its efforts to fight computer
intrusions that involve the theft of trade secrets by
individual, corporate and nation-state cyber hackers."
In an interview, U.S. Trade Representative Ron Kirk said the
problem of trade-secret theft in China was a factor in the
decisions of some U.S. companies to move operations back to the
The companies have "had very frank conversations with the
Chinese, (saying) 'You know it's one thing to accept a certain
level of copyright knock-offs, but if you're going to take our
core technology, then we're better off being in our home
country,'" Kirk told Reuters.