The recent arrest last month of a Chinese national and a U.S. citizen on multiple charges of conspiring to steal microchip designs is just one indication that activity in the corporate espionage world is heating up. Experts in the counterintelligence realm warn that companies had better start taking threats to their intellectual capital much more seriously or they’re likely to find their research investments benefiting corporations and governments abroad.

The gall of the two northern California men accused of conspiracy may surprise some but does not surprise security professionals who have worried about the protection of sensitive government information for decades. Maureen Baginski, president, national security systems sector, Sparta Incorporated, is a 25-year veteran of the National Security Agency and spent three years as the Federal Bureau of Investigation’s first executive assistant for intelligence. She says one of the biggest challenges to protecting data these days is that the nature of the intelligence threat to the United States has changed. In the past, the information that was worth stealing resided primarily with companies and universities that supported the U.S. Defense Department. Such sites were protected with high-level physical and information system security. “Now, secrets worth knowing extend far beyond the Defense Department realm and can’t easily be classified as Secret or Top Secret. Globalization means that the threat also is globalized, and hostile entities, not just other companies, want to get their hands on information,” Baginski points out. Both industry and academia must boost their awareness of this threat a great deal.

Although the consequences of counterintelligence neglect cannot be overemphasized or denied, most of the money that organizations spend on protection today is invested in physical security. “We understand denying physical access very well,” Baginski notes. However, because intellectual property is an average of 70 percent of a company’s worth, securing information is vitally important to the corporate bottom line, which in turn can affect the national economy.

And the research data the thieves are interested in also can threaten the nation’s security when made available on the open market, she reports. Of particular interest to adversaries is early research that involves weapon systems or enhancements to weapon systems, including smart weapons, nuclear and some information technology, Baginski reveals. Even research that is not directly tied to weapons but could be used by others to build or improve their own weapons is a valuable commodity, she adds.

While a finished product may be an enticing target, Baginski says foreign companies and governments also are interested in basic research that they can take to the next level. This leaves the organization that paid to lay the research groundwork holding the tab while others make the profits.

Corporations and universities not only need to recognize the threat but also must take strides to get their counterintelligence programs into gear. “When the government talks about protecting its secrets, we all understand it intuitively. In the business world, it’s not quite as well understood, and we need to understand it from an economic sense,” Baginski says.

“Counterintelligence begins at the top with organizations’ leaders deciding what they want to protect—the crown jewels—then protecting that,” Baginski shares. “Have a discussion about counterintelligence,” she advises.

The second step involves information technology. Threats to networks are being underestimated, she states, so organizations must protect and monitor their networks as well as install good spam filters.

Finally, Baginski recommends conducting background checks on any personnel with access to the networks and the information deemed important to protect. Even though organizations consider these individuals “people of trust,” she suggests companies monitor what they do while on the network.

Last month’s arrest of Lee Lan, a U.S. citizen, and Ge Yuefei, a Chinese national, illustrates the importance of Baginski’s advice. The two allegedly stole secrets from their employer NetLogics Microsystems as well as from Taiwan Semiconductor Manufacturing Corporation. They then set up a company to develop and market the trade secrets and attempted to obtain funding from the Chinese government.

What Companies and Universities Must Know About Counterintelligence A look inside the threats to intellectual property is a company’s first step toward protecting it. Members of industry and academia are invited to attend “Protecting the Nation’s Technology,” a one-day conference that focuses on the foreign intelligence threat and economic espionage. The event, which takes place on December 4 at the Lockheed Martin Campus, Sunnyvale, California, features presentations by some of the federal government’s top counterintelligence and law enforcement experts, beginning with a presentation by Dr. Joel Brenner, national counterintelligence executive and mission manager for counterintelligence, Office of the Director of National Intelligence. John Slattery, deputy assistant director, counterintelligence operations support, FBI, will moderate the morning panel discussion about technologies targeted by thieves. Attendees also will have the rare opportunity to hear details about the Supervision Case, the first conviction under the Economic Espionage Act that involved the trade secrets of four Silicon Valley companies. The FBI’s agent for the case as well as a representative from one of the companies caught off-guard by the intruders will delve into the details of what happened, who did it and how they were caught. In addition, strategies for protecting organizations against this type of espionage will be revealed. AFCEA International, the FBI’s San Francisco field office and four local AFCEA chapters are sponsoring the unclassified event. Maureen Baginski, president, national security systems sector, Sparta Incorporated, and conference chair, stresses that this is a rare opportunity for members of the commercial sector to hear from some of the top people in intelligence and law enforcement. “A federal/industry partnership is the only way that will work to give the companies some kind of specificity of the threat,” she states. The information that will be shared, even though unclassified, is extremely valuable, she adds. In fact, because of the sensitive nature of the topics that will be discussed, attendees must be U.S. citizens and must provide a social security number when registering. Space is limited, and registration is available online.