Protection of Expertise

In China, the theft of industrial expertise has grown to an epidemic scale. Examples include increased "reverse engineering," counterfeiting, industrial espionage, and hacking into American computer systems. The problem is increasing as knowledge thieves develop more sophisticated methods.

As hackers and spies sell the stolen knowledge to third parties, a snowball effect creates large secondary markets for cheap products. These competing discount markets undermine or destroy the sales of US manufacturers.

The main challenge facing US manufacturers is not the present loss of revenues, resulting from currently offered competing discount products. It's the future loss of sales and market share as a result of the rapidly growing global discount markets. These second markets not only damage but destroy a business.

Few US companies have a consistent strategy or coordinated measures to combat this challenge, instead reacting spontaneously to individual cases. This improvised approach leaves companies vulnerable as preventing knowledge theft requires comprehensive, coordinated actions and procedures to protect intellectual property.

Successful companies can raise the barriers for knowledge thieves to make theft of expertise more expensive, complex, and risky. An effective blockade requires an integrated system of knowledge protection.