[Congressional Record Volume 159, Number 63 (Tuesday, May 7, 2013)]
[Senate]
[Pages S3165-S3167]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. LEVIN (for himself, Mr. McCain, Mr. Coburn, and Mr. 
        Rockefeller):
  S. 884. A bill to require the Director of National Intelligence to 
develop a watch list and a priority watch list of foreign countries 
that engage in economic or industrial espionage in cyberspace with 
respect to United States trade secrets or proprietary information, and 
for other purposes; to the Committee on Finance.
  Mr. LEVIN. Mr. President, one aspect of cybersecurity threats from 
foreign nations relates directly to America's global competitiveness.
  If American entrepreneurs are known for one thing, it is innovation. 
That innovation costs money. American companies invest billions and 
billions of dollars every year on research and development to create 
products that are the best in the world. Companies in my State alone 
invest $16 billion a year in research and development. When these 
investments succeed American companies are often the leaders in their 
industries at home and in overseas markets, offering technologies that 
are not available elsewhere. This is a huge competitive value and one 
that we must protect.
  But too many U.S. companies of all sizes are being robbed of their 
intellectual property, the engine of their businesses, and the American 
economy is being undermined through cyber theft. Often the culprits are 
foreign governments. To make matters worse, these governments share the 
stolen technology with companies that compete with the very U.S. 
companies that developed the technology in the first place.
  General Keith B. Alexander, head of the National Security Agency and 
U.S. Cyber Command, recently called the theft of intellectual property 
from U.S. entities through cyberspace ``the greatest transfer of wealth 
in history.'' He estimated that such theft costs U.S. companies and 
institutions hundreds of billions of dollars. It is outrageous that 
American trade secrets are being stolen and used to compete against us. 
So who is responsible?
  As far back as 2011, the National Counterintelligence Executive said 
in its annual report to Congress that ``Chinese actors are the world's 
most active and persistent perpetrators of economic espionage. U.S. 
private sector firms and cybersecurity specialists have reported an 
onslaught of computer network intrusions that have originated in 
China.''
  In March of this year, Mandiant, a company that investigates private 
sector cyber security breaches, published a report describing how a 
cyber-espionage unit of the Chinese People's Liberation Army raided the 
computers of at least 141 different organizations, stealing 
``technology blueprints, proprietary manufacturing processes, test 
results, business plans, pricing documents, [and] partnership 
agreements.'' According to Mandiant, the industries targeted by the PLA 
``match industries that China has identified as strategic to their 
growth.'' Mandiant's report exposed PLA cyber theft aimed at the 
information technology, transportation, aerospace, satellites and 
telecommunications, and high end electronics industries, to name just a 
few.
  U.S. government reports also point to China. Just last week the U.S. 
Trade Representative issued its ``Special 301'' report reviewing the 
global state of intellectual property rights, IPR. USTR stated that 
``Obtaining effective enforcement of IPR in China remains a central 
challenge, as it has been for many years.'' The report continued ``This 
situation has been made worse by cyber theft, as information suggests 
that actors located in China have been engaged in sophisticated, 
targeted efforts to steal [intellectual property] from U.S. corporate 
systems.''
  Also last week, an article in Bloomberg described cyber espionage 
conducted by the Chinese People's Liberation Army against QinetiQ, a 
defense contractor. The article said the PLA operation ``jeopardized 
the [victim] company's sensitive technology involving drones, 
satellites, the U.S. Army's combat helicopter fleet, and military 
robotics, both already-deployed systems and those still in 
development.'' The report stated that the Chinese ``hackers had 
burrowed into almost every corner of QinetiQ's U.S. operations, 
including production facilities and engineering labs in St. Louis, 
Pittsburgh, Long Beach, Mississippi, Huntsville, Alabama and 
Albuquerque, New Mexico, where QinetiQ engineers work on satellite-
based espionage, among other projects.''
  It is time that we fought back to protect American businesses and 
American innovation. We need to call out those who are responsible for 
cyber theft and empower the President to hit the thieves where it hurts 
most--in their wallets.
  Today, I am introducing a bill along with Senators McCain, Coburn and 
Rockefeller that calls on the Director of National Intelligence, DNI, 
to develop a list of foreign countries that engage in economic or 
industrial espionage in cyberspace with respect to U.S. trade secrets 
or proprietary information. We have done something similar under the 
Special 301 process for intellectual property rights infringements in 
foreign countries.
  Specifically, our legislation requires the DNI to publish an annual 
report listing foreign countries that engage in, facilitate, support or 
tolerate economic and industrial espionage targeting U.S. trade secrets 
or proprietary

[[Page S3166]]

information through cyberspace. That report would identify:
  A watch list of foreign countries that engage in economic or 
industrial espionage in cyberspace with respect to trade secrets or 
proprietary information owned by United States persons; it would 
identify a priority watch list of foreign countries that are the most 
egregious offenders; U.S. technologies targeted for economic or 
industrial espionage in cyberspace and U.S. technologies that have been 
stolen, to the extent that is known; articles manufactured or produced 
or services provided, without permission from the rights holder, using 
such stolen technologies or proprietary information; foreign companies, 
including state owned enterprises, that benefit from stolen 
technologies or proprietary information; details of the economic or 
industrial espionage engaged in by foreign countries; and actions taken 
by DNI and other Federal agencies and progress made to decrease foreign 
economic or industrial espionage in cyberspace against United States 
persons.
  Creating a ``name and shame'' list, as this report would do, will 
shine a spotlight on those who are stealing U.S. technologies. But we 
need more than a report, we need action.
  Our bill provides for more than a report. In order to enforce 
compliance with laws protecting U.S. patents, copyrights, and other 
intellectual property and protection of the Department of Defense 
supply chain, our legislation requires the President to block imports 
of products if they: contain stolen U.S. technology or proprietary 
information, or are produced by a state-owned enterprise of a country 
on the priority watch list and are the same as or similar to products 
made using the stolen or targeted U.S. technology or proprietary 
information identified in the report, or are made by a company 
identified in the report as having benefitted from the stolen U.S. 
technology or proprietary information.
  Blocking imports of products that either incorporate intellectual 
property stolen from U.S. companies or are from companies otherwise 
that benefit from cyber theft will send the message that we have had 
enough. If foreign governments--like the Chinese government--want to 
continue to deny their involvement in cyber theft despite the proof, 
that's one thing. We can't stop the denials on the face of facts. But 
we aren't without remedies. We can prevent the companies that benefit 
from the theft--including State-owned companies from getting away with 
the benefits of that theft. Maybe once they understand that complicity 
will cost them access to the U.S. market, they will press their 
governments to stop or refuse to benefit at least. We will hit them 
where it hurts with this legislation and we aim to get results.
  We have stood by for far too long while our intellectual property and 
proprietary information is plundered in cyberspace and in turn used to 
undercut the very companies that developed it. It is now time to act. 
Our legislation will give our Government powerful tools to fight back 
against these crimes and protect the investments and property of U.S. 
companies and institutions. I urge my colleagues to work to enact this 
very important legislation as quickly as possible. We have no time to 
lose.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                 S. 884

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Deter Cyber Theft Act''.

     SEC. 2. ACTIONS TO ADDRESS FOREIGN ECONOMIC OR INDUSTRIAL 
                   ESPIONAGE IN CYBERSPACE.

       (a) Report Required.--
       (1) In general.--Not later than 180 days after the date of 
     the enactment of this Act, and annually thereafter, the 
     Director of National Intelligence shall submit to the 
     appropriate congressional committees a report on foreign 
     economic and industrial espionage in cyberspace during the 
     12-month period preceding the submission of the report that--
       (A) identifies--
       (i) foreign countries that engage in economic or industrial 
     espionage in cyberspace with respect to trade secrets or 
     proprietary information owned by United States persons;
       (ii) foreign countries identified under clause (i) that the 
     Director determines engage in the most egregious economic or 
     industrial espionage in cyberspace with respect to such trade 
     secrets or proprietary information (in this section referred 
     to as ``priority foreign countries'');
       (iii) technologies or proprietary information developed by 
     United States persons that--

       (I) are targeted for economic or industrial espionage in 
     cyberspace; and
       (II) to the extent practicable, have been appropriated 
     through such espionage;

       (iv) articles manufactured or otherwise produced using 
     technologies or proprietary information described in clause 
     (iii)(II);
       (v) services provided using such technologies or 
     proprietary information; and
       (vi) foreign entities, including entities owned or 
     controlled by the government of a foreign country, that 
     request, engage in, support, facilitate, or benefit from the 
     appropriation through economic or industrial espionage in 
     cyberspace of technologies or proprietary information 
     developed by United States persons;
       (B) describes the economic or industrial espionage engaged 
     in by the foreign countries identified under clauses (i) and 
     (ii) of subparagraph (A); and
       (C) describes--
       (i) actions taken by the Director and other Federal 
     agencies to decrease the prevalence of economic or industrial 
     espionage in cyberspace; and
       (ii) the progress made in decreasing the prevalence of such 
     espionage.
       (2) Determination of foreign countries engaging in economic 
     or industrial espionage in cyberspace.--For purposes of 
     clauses (i) and (ii) of paragraph (1)(A), the Director shall 
     identify a foreign country as a foreign country that engages 
     in economic or industrial espionage in cyberspace with 
     respect to trade secrets or proprietary information owned by 
     United States persons if the government of the foreign 
     country--
       (A) engages in economic or industrial espionage in 
     cyberspace with respect to trade secrets or proprietary 
     information owned by United States persons; or
       (B) facilitates, supports, fails to prosecute, or otherwise 
     permits such espionage by--
       (i) individuals who are citizens or residents of the 
     foreign country; or
       (ii) entities that are organized under the laws of the 
     foreign country or are otherwise subject to the jurisdiction 
     of the government of the foreign country.
       (3) Prioritization of collection and analysis of 
     information.--The President shall direct the Director to make 
     it a priority for the intelligence community to collect and 
     analyze information in order to identify articles described 
     in clause (iv) of paragraph (1)(A), services described in 
     clause (v) of that paragraph, and entities described in 
     clause (vi) of that paragraph.
       (4) Form of report.--Each report required by paragraph (1) 
     shall be submitted in unclassified form but may contain a 
     classified annex.
       (b) Action by President.--
       (1) In general.--Not later than 120 days after each report 
     required by subsection (a)(1) is submitted, the President 
     shall direct U.S. Customs and Border Protection to exclude 
     from entry into the United States an article described in 
     paragraph (2) if the President determines the exclusion of 
     the article is warranted--
       (A) for the enforcement of intellectual property rights; or
       (B) to protect the integrity of the Department of Defense 
     supply chain.
       (2) Article described.--An article described in this 
     paragraph is an article--
       (A) identified under subsection (a)(1)(A)(iv);
       (B) produced or exported by an entity that--
       (i) is owned or controlled by the government of a priority 
     foreign country; and
       (ii) produces or exports articles that are the same as or 
     similar to articles manufactured or otherwise produced using 
     technologies or proprietary information identified under 
     subsection (a)(1)(A)(iii); or
       (C) produced or exported by an entity identified under 
     subsection (a)(1)(A)(vi).
       (c) Consistency With International Agreements.--This 
     section shall be applied in a manner that is consistent with 
     the obligations of the United States under international 
     agreements.
       (d) Definitions.--In this section:
       (1) Appropriate congressional committees.--The term 
     ``appropriate congressional committees'' means--
       (A) the Committee on Armed Services, the Committee on 
     Homeland Security and Governmental Affairs, the Committee on 
     Finance, the Committee on Foreign Relations, and the Select 
     Committee on Intelligence of the Senate; and
       (B) the Committee on Armed Services, the Committee on 
     Homeland Security, the Committee on Foreign Affairs, the 
     Committee on Ways and Means, and the Permanent Select 
     Committee on Intelligence of the House of Representatives.
       (2) Cyberspace.--The term ``cyberspace''--
       (A) means the interdependent network of information 
     technology infrastructures; and
       (B) includes the Internet, telecommunications networks, 
     computer systems, and embedded processors and controllers.
       (3) Economic or industrial espionage.--The term ``economic 
     or industrial espionage'' means--

[[Page S3167]]

       (A) stealing a trade secret or proprietary information or 
     appropriating, taking, carrying away, or concealing, or by 
     fraud, artifice, or deception obtaining, a trade secret or 
     proprietary information without the authorization of the 
     owner of the trade secret or proprietary information;
       (B) copying, duplicating, downloading, uploading, 
     destroying, transmitting, delivering, sending, communicating, 
     or conveying a trade secret or proprietary information 
     without the authorization of the owner of the trade secret or 
     proprietary information; or
       (C) knowingly receiving, buying, or possessing a trade 
     secret or proprietary information that has been stolen or 
     appropriated, obtained, or converted without the 
     authorization of the owner of the trade secret or proprietary 
     information.
       (4) Intelligence community.--The term ``intelligence 
     community'' has the meaning given that term in section 3(4) 
     of the National Security Act of 1947 (50 U.S.C. 401a(4)).
       (5) Own.--The term ``own'', with respect to a trade secret 
     or proprietary information, means to hold rightful legal or 
     equitable title to, or license in, the trade secret or 
     proprietary information.
       (6) Person.--The term ``person'' means an individual or 
     entity.
       (7) Proprietary information.--The term ``proprietary 
     information'' means competitive bid preparations, negotiating 
     strategies, executive emails, internal financial data, 
     strategic business plans, technical designs, manufacturing 
     processes, source code, data derived from research and 
     development investments, and other commercially valuable 
     information that a person has developed or obtained if--
       (A) the person has taken reasonable measures to keep the 
     information confidential; and
       (B) the information is not generally known or readily 
     ascertainable through proper means by the public.
       (8) Technology.--The term ``technology'' has the meaning 
     given that term in section 16 of the Export Administration 
     Act of 1979 (50 U.S.C. App. 2415) (as in effect pursuant to 
     the International Emergency Economic Powers Act (50 U.S.C. 
     1701 et seq.)).
       (9) Trade secret.--The term ``trade secret'' has the 
     meaning given that term in section 1839 of title 18, United 
     States Code.
       (10) United states person.--The term ``United States 
     person'' means--
       (A) an individual who is a citizen of the United States or 
     an alien lawfully admitted for permanent residence to the 
     United States; or
       (B) an entity organized under the laws of the United States 
     or any jurisdiction within the United States.
                                 ______