Perimeter
6/3/2010
10:48 AM
Rob Enderle
Rob Enderle
Commentary
50%
50%

An Industrial Espionage Comeback

Apple seems to believe, and likely with good reason, that competitors are aggressively trying to steal its ideas.

Apple seems to believe, and likely with good reason, that competitors are aggressively trying to steal its ideas.Apple is so aggressive about protecting those assets that a rash of suicides has occurred in partner companies apparently connected to these efforts. Apple is so overly concerned with the security of its intellectual property that it apparently fired an engineer for showing Steve Wozniak (Apple co-founder) an iPad 3G at the iPad launch. But what if Apple is right? In other words, is industrial espionage on the upswing? (A few of historic industrial espionage cases can be found here.)

I worked in competitive intelligence for a number of years while at IBM, and that function was created at many firms, in part, to replace what had been a much more aggressive practice of industrial espionage. The reason for this shift was largely self-serving: When a firm was caught stealing intellectual property, the repercussions could be extreme and include both severe civil and criminal charges.

Around the time I joined IBM, two Japanese companies were caught in separate clandestine stings while attempting to steal IBM's mainframe intellectual property. These firms not only had to pay IBM a lot of money as a result, but they also lost a lot of their own intellectual property to IBM. The Society of Competitive Intelligence Professionals was created and a set of self-regulating guidelines were put in place to make sure firms behaved. The organizations, which often had no formal names but were actively engaging in industrial espionage, were migrated to competitive analysis. From then on, most companies have appeared to be largely playing by the rules.

But just as we recently saw the failure of internal audit to prevent the financial market meltdown, competitive analysis has largely fallen on hard times and not had the funding and focus it once had. As a result, both the reason for the guidelines and the guidelines themselves are likely being forgotten, and illicit competitive information is probably being acquired.

It appears that firms may have fallen back on bad practices. For instance, Microsoft was accused of sabotaging Netscape's browser efforts by the DOJ in the '90s, and recently Apple has been accused of sabotaging Amazon's music efforts.

Sabotaging a competitor, particularly if you control a market, can result in successful antitrust litigation, and the end result can be the massive fines Microsoft and others have suffered through, on top of wave after wave of civil litigation.

This litigation, such as the recent Intel vs. AMD battles have highlighted, can suck up millions of dollars, result in sensitive email being released both in and out of context, and translate to hours of time for employees being deposed rather than doing their real jobs. In my opinion, it was the Netscape litigation that convinced Bill Gates that he no longer wanted to run Microsoft. When the most powerful man in tech is impacted this significantly, just think what a mess like this would do to anyone else.

Meanwhile, most victims of industrial espionage likely aren't even aware that they've been had. Years ago, I caught a senior VP of sales in what apparently was an intentional leak of critical information to a competitor -- only to watch him leave the company and go to work for that very competitor. One of the reasons I don't like layoffs is because they are often done badly, and employees walk away with customer lists, plans for future products, and other highly confidential information unchallenged. Because they were laid off, the employees justify what they are doing as a response to their ill treatment. I've watched executives in interviews share confidential information in order to get a job -- even while they are still employed by their current employer -- and wonder why the hiring company believes that these executives won't do the same to them. For several years, we've been tracking an increase in general employee theft, yet we apparently haven't connected this to a similar trend in intellectual property theft. While we have been concerned about new electronic security threats , we may have reduced focus on more traditional methods of intellectual property theft and may need to revisit this.

While Apple likely pushes the line in how it acquires and protects critical assets, its high-priority focus on protecting them is probably right for the times. Firms are increasingly at risk of having key products copied, key efforts sabotaged, and highly sensitive information compromised. While we have focused on many of the electronic methods of compromising our security, the more traditional methods may have been overlooked and, even when identified, firms are often more interested in containing the problem than in making other companies aware of the exposure. We need to make sure our competitors aren't stealing our stuff and assuring our failure. All may be fair in love and war, but it's certainly not all legal, and losing certainly still does suck. And just because you aren't hearing about a crime doesn't mean it isn't being committed. You simply may not be looking hard enough.

-- Rob Enderle is president and founder of Enderle Group. Special to Dark Reading.

Comment  | 
Print  | 
More Insights
Register for Dark Reading Newsletters
White Papers
Cartoon
Current Issue
Dark Reading, January 2015
To find and fix exploits aimed directly at your business, stop waiting for alerts and become a proactive hunter.
Flash Poll
Title Partner’s Role in Perimeter Security
Title Partner’s Role in Perimeter Security
Considering how prevalent third-party attacks are, we need to ask hard questions about how partners and suppliers are safeguarding systems and data.
Video
Slideshows
Twitter Feed
Dark Reading - Bug Report
Bug Report
Enterprise Vulnerabilities
From DHS/US-CERT's National Vulnerability Database
CVE-2013-7402
Published: 2014-12-17
Multiple unspecified vulnerabilities in request.c in c-icap 0.2.x allow remote attackers to cause a denial of service (crash) via a crafted ICAP request.

CVE-2014-5437
Published: 2014-12-17
Multiple cross-site request forgery (CSRF) vulnerabilities in ARRIS Touchstone TG862G/CT Telephony Gateway with firmware 7.6.59S.CT and earlier allow remote attackers to hijack the authentication of administrators for requests that (1) enable remote management via a request to remote_management.php,...

CVE-2014-5438
Published: 2014-12-17
Cross-site scripting (XSS) vulnerability in ARRIS Touchstone TG862G/CT Telephony Gateway with firmware 7.6.59S.CT and earlier allows remote authenticated users to inject arbitrary web script or HTML via the computer_name parameter to connected_devices_computers_edit.php.

CVE-2014-7170
Published: 2014-12-17
Race condition in Puppet Server 0.2.0 allows local users to obtain sensitive information by accessing it in between package installation or upgrade and the start of the service.

CVE-2014-7285
Published: 2014-12-17
The management console on the Symantec Web Gateway (SWG) appliance before 5.2.2 allows remote authenticated users to execute arbitrary OS commands by injecting command strings into unspecified PHP scripts.

Best of the Web
Dark Reading Radio
Archived Dark Reading Radio
Join us Wednesday, Dec. 17 at 1 p.m. Eastern Time to hear what employers are really looking for in a chief information security officer -- it may not be what you think.