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executive with Taiwan's Yuen Foong Paper Industry Co., and one of Chou's employees allegedly tried to steal Bristol-Myers' formula for Taxol, an anticancer drug, according to a February 1998 report in The Wall Street Journal. Chou asked an FBI agent posing as an information broker to find a Bristol-Myers employee willing to sell her the information. In return, the agent would get $400,000 in cash, stock in the Taiwanese paper company and royalties from the sale of the drug. Chou also asked to see certain documents related to Taxol so she could assess the technology. Working with the FBI, an employee of Bristol-Myers brought the documents to a meeting, where Chou and her accomplice were caught red-handed and arrested. That was when Bristol-Myers' real troubles started. Lawyers for the defendants argued that their clients had a right to see the documents. They claimed the information did not fit the definition of a "trade secret" because much of it was in the public domain, and Bristol-Myers had not taken sufficient steps to prevent its disclosure. A U.S. district court judge ruled in the defendants' favor, saying they "must have the exact processes and formulae for Taxol available to them--or at least those formulae and processes that the government will contend to the jury are trade secrets." You can imagine that the decision did not sit well with Bristol-Myers or Richard Goldberg, the Philadelphia assistant U.S. attorney prosecuting the case. In court papers, Goldberg said, "The concept of profiting from the attempted theft would reach new heights if prosecution resulted in the transfer of trade secrets which could not be obtained illegally." Goldberg also said that if the ruling is upheld, the government will take steps, including possibly seeking dismissal of the case, to prevent disclosure of the trade secrets. If upheld, the ruling will probably affect future cases, with companies reluctant to pursue prosecution for fear of losing control over their intellectual property. Truth in Numbers Theft of trade secrets is one of the most serious threats facing business today. The latest CSI/FBI Computer Crime and Security Survey, released in March, found that of 12 types of computer crime and misuse, theft of proprietary information had the greatest reported financial losses for the period 1997-1999. According to the survey, more than $42 million worth of trade secrets was stolen from 64 organizations that were able to quantify their losses from this type of breach. The lesson is clear: If you don't want to be the next victim, be aware of the danger, and be sure to design, implement and update a comprehensive security program that addresses the threat from all angles (see below). Dorothy E. Denning, Ph.D., is a professor of computer science at Georgetown University. Dorothy is also a member of Information Security's Editorial Advisory Board. Portions of this article are taken from her latest book, Information Warfare and Security (Addison-Wesley, 1999, ISBN 0-201-43303-6). |