Tom Temin Commentary

An internet to protect the internet?

Now higher on the intellectual property theft food chain are industrial products and integrated circuits, which can weaken national security.

Tom Temin@tteminWFED

December 5, 2018 10:25 am

2 min read

What’s the first think you think to ask when you see a Rolex on someone’s wrist? Of course: “Is it real?”

Counterfeit Rolex watches have come to stand for the worldwide fakery industry. Watches, electronic, designer clothing — it amounts to billions every year. People adore brands and think a phony watch or handbag confers status by virtue of the logo. It doesn’t harm them, but it does harm the companies and employees who toil to make the real thing.

Personally I’d feel like an idiot wearing a counterfeit watch. If I won the lottery I’d buy a Brietling; the one I want is about $10,000. That ain’t happening, so instead I’m content with a $250 Citizen.

More insidious are counterfeit industrial products. Phony integrated circuits, connectors or mechanical components can be dangerous, not merely dishonest. Crooks also counterfeit drugs and cosmetics. Imagine fake toothpaste with Lord-knows-what sloshing around your mouth.

This came to mind reading a year-end release from U.S. Immigration and Customs Enforcement. With immigration getting so much attention, people don’t always think about the latter side of the house. ICE is part of an intergovernmental group called the National Intellectual Property Rights Coordination Center which collaborates with law enforcement in 26 countries. It says its work resulted in the seizure of more than 1 million web sites this year. Fake goods, once the purview of street vendors, has gone viral.

A 2017 published report put the Chinese online retailer Alibaba as the top site for counterfeit items, with Facebook and Amazon in the top five. They’re part of a nearly $500 billion industry.

The issue of brand theft itself is but part of the even larger issue of intellectual property protection. At every cybersecurity conference, you hear the same assertion: U.S. entities are constantly drained of IP through espionage, mostly cyber. Just this week, former National Security Agency Director Keith Alexander described this ongoing theft at the National Contract Management Association symposium. He called for an internet to protect the internet. The lower-case net would give organizations a secure place to share threat information.

As counterfeiters or thieves seeking a shortcut to neutralize U.S. advantages, the consequences rise as they move up the food chain. Especially as the Defense Department pursues various technologies to restore what leadership believes is an eroded competitive advantage. Multiple reports over the years have chronicled the steady loss of F-35 fighter details to the Chinese military. In 2017, an Austrian defense contractor was hacked of F-35 data. A program spokesman at the time told Defense News nothing classified was taken, only detailed schematics. Geez!

A fake Swiss watch has tangible economic effects for its purveyors. But reverse-engineered or clipped satellite technology harms national security.